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Consensus on the first formal replenishment process of the UNFCCC’s Green Climate Fund (GCF) did not come through at the 20th meeting of the Board of the GCF held in Songdo, South Korea, from July 1-4.
During the meeting, funding proposals worth nearly $1 billion were expected to be considered for approval. However, the Board discussions on funding proposals could not happen due to process-related disagreements among Board members at the meeting.
Areas of discord
Given the growing demand for GCF funds—87 funding proposals requesting $5.1 billion of GCF funding—the developing nations stressed on the need to get the replenishment process in order. However, disagreements occurred on whether certain policies and procedures needed to be in place before the replenishment process could begin and whether the replenishment process should be driven by the GCF Board or contributors who contribute to the GCF. Another area of disagreement was on whether and what type of review of the GCF should be conducted for the replenishment to happen.
Currently, there is a gap of about US$3 billion between resources pledged and committed, which includes nearly $1 billion in foreign exchange losses and $2 billion due to the US not fulfilling its pledge. The US has paid $1 billion out of the $3 billion it had pledged.
According to the GCF Secretariat, as opposed to $10.2 billion committed by countries, only $7.2 billion would be mobilised by the end of the initial resource mobilisation (IRM) period of 2015-2018.
The document also revealed that out of the $6.5 billion received so far, funding decisions have been made for $4.5 billion, which includes the approval of funds for 76 projects. Therefore, decision has not been taken yet for the remaining $2 billion. By the end of this year, $790 million will be added to the GCF. Out of this $2.8 billion, more than $300 million has to be allocated for the administrative budget of the Secretariat and other operational expenses.