Climate fund approves $1bn for projects in poor countries
The biggest source of green funding for developing countries is ‘back on the rails’ after being undermined by political squabbling and Trump’s funding withdrawal
Barcelona — The world’s biggest fund for tackling climate change in the developing world has approved investment of about $1bn in new projects and launched a process to refill its coffers, putting it back on track after a difficult few months.
Progress at the latest meeting of the Green Climate Fund (GCF) board, which wrapped up on Saturday evening in Bahrain, was viewed as key to smooth the way for UN climate talks in December tasked with agreeing rules to implement the 2015 Paris Agreement to curb global warming.
GCF board co-chair Lennart Båge of Sweden said the results from last week’s meeting had “exceeded expectations”, while UN climate chief Patricia Espinosa said in a tweet it had sent an “important signal” ahead of the upcoming climate conference.
Researchers with the US-based World Resources Institute (WRI), who attended the board meeting, told the Thomson Reuters Foundation the GCF was “back on the rails” after a previous meeting in July broke down amid political squabbling.
“We are in a much better place going into these crunch climate talks in December,” said Joe Thwaites, an associate in WRI’s Sustainable Finance Center.
“Continued GCF support for developing countries is a key component of success in the international negotiations.”
The GCF was set up under the UN climate talks, and donor countries initially promised more than $10bn in 2014 to fund projects to help poorer nations reduce planet-warming emissions and adapt to wilder weather and rising seas.
But it has not been plain sailing.
The South Korea-based fund has struggled with arguments over how it should be run among its 24-member board, which has an equal balance of developed and developing-country representatives. Some of those issues have yet to be resolved.
It also faces a $2bn shortfall after US President Donald Trump last year decided his country should quit the Paris Agreement, and signalled he would not deliver the remaining two-thirds of a $3bn pledge to the GCF.
That has made a replenishment of the fund even more important, as it has now allocated more than $4.6bn to 93 projects, with more proposals seeking funding approval.
“With a rapidly growing portfolio, accelerating implementation on the ground, and a pipeline of $17bn showing huge demand, GCF is now entering its first replenishment ready to step up its support of developing countries’ climate action,” Javier Manzanares, the fund’s interim executive director, said in a statement after the board meeting.
A process for approaching donors for fresh contributions was agreed at the Bahrain meeting. Observers said a pledging conference could take place next autumn.
In Manama, the fund’s board also approved 16 new partner organisations to implement GCF projects, including banks and government agencies, bringing the total to 75.
It agreed on a process to select a new executive director after its previous head quit in July, and it decided to start a performance review of the fund by an independent unit.
In addition, the board discussed how it should take decisions if it cannot reach consensus — an issue that has hampered progress on occasions. An alternative process has yet to be agreed.
There was controversy over a project submitted by the meeting’s host government, oil- and gas-rich Bahrain, which sparked concern that GCF money could be used to help clean up wastewater from the fossil fuel industry.
Only part of the original proposal, however, relating to reducing national demand for water, was eventually approved.
Other projects that won GCF backing included work to boost the climate resilience of Indian coastal communities, a water supply project for the Pacific island nation of Kiribati, a programme to help 50,000 family farmers deal with weather extremes in El Salvador’s “dry corridor”, and a bus rapid transit system for the Pakistani city of Karachi.
“Climate finance and climate project formulation are the two greatest bottlenecks to climate action in the developing countries,” Paul Oquist, Nicaraguan co-chair of the board, said in a statement. “GCF has a critical role to play in both.”
Thomson Reuters Foundation