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Danish Organisation Strategy
for
The Green Climate Fund
2024-2027
7 August 2024
File No: 2023-25376
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Table of Contents
1. Objective of the Organisation Strategy .........................................................................1
2. The Organisation .......................................................................................................1
2.1. Mandate and Mission ............................................................................................2
2.2. Governance and Management Structure ..................................................................2
3. Lessons Learnt, Key Strategic Challenges and Opportunities............................................3
3.1. Status of the GCF ................................................................................................3
3.2 Lessons Learned 2020-2023 ...................................................................................5
3.3 Strategic Plan for the GCF 2024-2027 and Vision 50by30 ...........................................8
4. Danish support and priorities.....................................................................................10
4.1 Justification for support........................................................................................10
4.2 Danish priorities..................................................................................................12
5. Budget ...................................................................................................................15
GCF Budget 2024-2027 .............................................................................................15
6. Danish means of influence and monitoring ..................................................................16
6.1 Monitoring..........................................................................................................17
6.2 Anti-corruption and integrity measures ..................................................................18
7. Risks and assumptions .............................................................................................19
Annexes .....................................................................................................................22
Annex 1 Organisation Chart .......................................................................................22
Annex 2 GCF 2024-2027 Contribution by State (in million USD) as of March 2024 .............23
Annex 3 Accumulated pledges 2015 - 2024 (in million USD) as of February 2024 ..............24
Annex 4 Results Framework DOS 2024-2027................................................................25
Annex 5 Key Lessons learnt 2020-2023 .......................................................................29
Annex 6 GCF strengths and comparative advantages .....................................................33
Annex 8 List of stakeholders consulted and list of key background documents ..................42
Annex 9 GCF selected countries statistics and interviews with Danish embassies ...............44
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Danish Organisation Strategy
for the Green Climate Fund (2024-2027)
Introduction
:
The Green Climate Fund was established in 2010 by 194 Parties
to the UNFCCC, as part of the Convention’s financial
mechanism. GCF provides support to developing countries to
limit or reduce their greenhouse gas emissions and to adapt to
the impact of climate change.
File No.
Responsible Unit
Commitment
(Mill.)
Projected ann. Disb.
Duration of strategy
Finance Act code.
Head of Unit
Desk officer
Financial officer
2023-25376
KLIMA
2024 2025 2026 2027 total
150 450 450 550 1600
150 450 450 550 1600
4 years (2024-2027)
06.34.01.25
Karin Poulsen
Charlotte Just
Jacob Strange-Thomsen
GCF key results (2024- 2027 period)
:
•
•
•
•
•
Mitigation of 1,5 to 2,4 gigatonnes of CO2 equivalent
Enhanced resilience of 570 to 900 million people
Fully aligned with the Danish strategy for development
cooperation 'The World We Share' and the Global Climate
Action Strategy: A Green and Sustainable World
GCF has a crucial role in serving the UNFCCC and the Paris
Agreement and enjoys a high degree of legitimacy with equal
number of developed and developing countries in the Board
As the largest global fund dedicated to fight climate change,
GCF is solidly positioned in the international climate finance
architecture, and lead contributor to ensure complementarity
between the int. climate funds.
Size and volume of GCF projects including co-financing
provide greater opportunities for impact at scale.
Initiation of an ambitious reform process by the Executive
Director to address challenges around accreditation, project
back-locks, disbursement rates and country ownerships.
Justification for support:
SDGs relevant for Programme
No Poverty
No
Hunger
Good
Health,
Wellbeing
Quality
Education
Gender
Equality
Clean Water,
Sanitation
Affordable
Clean Energy
Decent
Jobs, Econ.
Growth
•
•
Industry,
Innovation,
Infrastruct
ure
Reduced
Inequalities
Sustainable
Cities,
Communiti
es
Responsible
Consumption
& Production
Climate
Action
Life below
Water
Life on
Land
Peace &
Justice,
strong Inst.
Partnership
s for Goals
How will we ensure results and monitor progress:
•
•
Active engagement in between and during Board meetings,
monitor Danish priorities and progress based on GCF’s
results framework (IRMF).
Actively work for a MOPAN-assessment of the GCF.
Strategic engagement with GCF at HQ and at country level
through selected embassies with GCF National Designated
Authority.
Building alliance with like-minded partners/countries.
Insufficient capacity in LDCs and SIDS to develop national
project proposals.
Insufficient capacity in the GCF Secretariat to manage the
increase in programming resources and number of AEs and
project proposals within a reasonable timeframe.
Strat. Objectives
Priority results
Enhanced access to GCF
resources (including
accreditation)
Budget (DKK)*
GCF core funding
1,600,000,000
Total:
1,600,000,000
* 2025-27 allocations are subject to annual parliamentary approval
Danish involvement in governance structure
•
•
•
•
Board member and shared Board seat with NL and LUX.
Member of the Accreditation Committee.
Member of the Constituency of Developed Countries.
Coordination with the Nordic group and Danish observer
to the Board.
•
•
•
•
Risk and challenges:
Core information
Established
Headquarter
Decision at COP15 (2009),
established in 2010, operationalised
2014.
Songdo, Republic of Korea
The aim of Danish support to
GCF is to reduce greenhouse gas
emissions and build resilience, and
increase the ability of developing
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countries to adapt to climate
change impacts, and contribute to
making global financial flows
consistent with low-emission and
climate-resilient development.
Thereby it is a key contribution to
the implementation of the Paris
Agreement. GCF serves as a
critical element of Denmark’s
ambition to increase mobilization
of climate finance and take lead on
climate action internationally.
Enhanced country
ownership and efficiency
of GCF support at
country level
Private Sector: Promoting
innovation and catalysing
green financing
Strengthening safeguards
and gender mainstreaming
Executive Director
Partner countries
Human Resources
Funding amount by
target
Adaptation funding
going to the most
vulnerable countries
Results to date
(anticipated, April 2024)
Mafalda Duarte (since Aug. 2023)
194
300 employees – all in Songdo
50% adaptation and 50%
mitigation (grant equivalent terms)
54% (grant equivalent terms) (April
2024)
1 billion people with increased
resilience
2,9 tonnes of CO2 equivalent
avoided
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List of Abbreviations
AE
AF
ARCAFIM
CSO
CIF
COP
DAE
DOS
EDA
ESS
FPIC
GCF
GCF-1
GEF
GT
GI
HQ
IAE
IEU
IFAD
IFC
IRM
IRMF
KEFM
LCD
LTS
MDB
MFA
MSME
NAP
NDA
NDC
PPF
PPMS
PSAA
PSF
REDD
RPSP
RRMF
RTT
SDG
SIDS
SP
SPR
UN
Accredited Entity
Adaptation Fund
Africa Rural Climate Adaptation Finance Mechanism
Civil Society Organisation
Climate Investment Fund
Conference of the Parties
Direct Accredited Entity
Danish Organisation Strategy
Enhanced direct access
Environmental and Social Safeguards
Free, Prior and Informed Consent
Green Climate Fund
Green Climate Fund 2020-2023
Global Environment Facility
Giga Tonnes
Governing Instrument
Headquarters
International Accredited Entity
Independent Evaluation Unit
International Fund for Agricultural Development
International Finance Cooperation
Initial Resource Mobilization
Integrated Results Management Framework
Ministry of Climate, Energy and Utilities
Least Developed Countries
Long-Term Strategy
Multilateral Development Bank
Ministry of Foreign Affairs
Micro, Small and Medium Enterprises
National Adaptation Plan
National Designated Authority
National Determined Contribution
Project Preparation Facility
Project Performance Management System
Project-Specific Assessment Approach
Private Sector Facility
Reducing emissions from deforestation and forest degradation
Readiness and Preparatory Support Programme
Readiness Results Management Framework
Results Tracking Tool
Sustainable Development Goals
Small Island Developing States
Strategic Plan 2024-2027SSC Strategic Sector Support
Second Performance Review
United Nations
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UNFCCC
UNDRIP
USD
USP
WB IDA
United Nations Framework Convention on Climate Change
United Nations Declaration on the Rights of Indigenous Peoples
United States Dollars
Updated Strategic Plan 2020-2023
World Bank’s International Development Association
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1. Objective of the Organisation Strategy
This Strategy for the cooperation between Denmark and the Green Climate Fund (GCF) forms the basis
for the Danish contributions to the GCF, and it is the central platform for Denmark’s dialogue and
partnership with GCF. It sets up Danish priorities for GCF’s performance within the overall framework
established by GCF’s own strategy “Strategic Plan for the Green Climate Fund 2024-2027”. In addition,
it outlines specific goals and results vis-à-vis the GCF that Denmark will pursue in its cooperation with
the organisation. Denmark will work closely with like-minded countries towards the achievement of
results through its efforts to pursue specific goals and priorities.
This formulation of the Danish Organisation Strategy 2024-2027 builds on key observations and lessons
learned from the four Danish priority areas 2021-2023, analysis of GCF strengths and comparative
advantages; Second Performance Review (SPR) completed by the Independent Evaluation Unit, Feb.
2023; the Mid-Term Review conducted by the MFA, June 2022; and similarly from consultations with
GCF staff and stakeholders in Denmark, online meetings with selected Danish embassies, and two field
visits to Uganda and Kenya between Jan.-April 2024
1
.
2. The Organisation
The Green Climate Fund (GCF) is the world’s largest multilateral climate fund. As the financing
mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) and a critical
element of the Paris Agreement, GCF’s mission is to support developing countries in raising and realising
their climate ambitions towards low-emission, climate-resilient pathways. As of May 2024, GCF has
committed almost USD 14 billion in funding to 253 projects in 129 developing countries.
Within a short period, GCF has become firmly positioned in the international climate finance
architecture, where its size and risk appetite enable it to act as a green market accelerator. Compared to
other climate finance institutions, CGF has a much wider range of financial instruments and larger ticket
sizes, and compared to almost any national/multilateral financial institution, GCF’s risk appetite is
substantially higher regarding investing in non-mature markets and asset classes in Africa, LDCs and
SIDS. GCF is a lead contributor to ensure complementarity and coherence between the various
international climate funds.
The new Executive Director Mafalda Duarte has initiated an ambitious reform process with her “50by30”
initiative, targeting USD 50 billion by 2030 and an internal GCF efficiency drive aiming to restructure
the organisation. Both initiatives have as their main goals enhancing access to GCF funds, mobilise
private sector participation and financing, and ensure stronger country ownership. The reform initiatives
have been warmly welcomed by both developing and developed countries as the right strategic direction
and aims for delivering solutions to key challenges like accreditation, project back-locks, disbursement
rates and they have not least shown confidence that the new Director is the right leader to take GCF
forward. The four priorities of the Danish Organisation Strategy for GCF are fully aligned with the vision
and objectives of the reforms.
Denmark has supported the Green Climate Fund before it became operational and since then, with two
executive grants. With this new grant of DKK 1,6 billion Denmark will contribute towards the GCF goal
for 2024-2027 of anticipated 570-900 million people with increased resilience towards climate change
and 1,5 to 2,4 GT CO2 emissions avoided. Denmark’s strong engagement with GCF serves as a critical
element of Denmark’s ambition to lead on climate action internationally and seek alliances with
developing countries where Denmark has considerable political and development interests.
1
For more specific and detailed assessment see for example annex 5, 6 and 9.
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2.1. Mandate and Mission
The Green Climate Fund (GCF) was established following decision at the 15th Conference of the Parties
(COP15) under the UN Framework Convention on Climate Change (UNFCCC), which took place in
Copenhagen in 2009
2
. In 2010, the GCF was formally set up by the 194 Parties to the UNFCCC and
“accountable to and functions under the guidance of the COP”
3
and in 2015, the first projects were
approved. The GCF is an operating entity guided by the UNFCCC and serves the Paris Agreement, but
remains a legally independent institution with the GCF’s Governing Instrument setting out mandate and
working methods.
GCF takes a country-driven approach, where programmes are formulated with relevant national
stakeholders and objectives included in national action plans. A National Dedicated Authority (NDA),
often from the Ministry of Finance, coordinates programmes and pipelines with country specific
stakeholders. The Fund plays a key role in catalysing both public and private climate finance, and seeks
a 50:50 balance between mitigation and adaptation investments with minimum 50 per cent of adaptation
finance allocated to vulnerable countries, i.e. the Least Developed Countries (LDCs), Small Island
Developing States (SIDS), and African States
4
.
GCF provides funding primarily through grants
Green Climate Fund
and loans, and to a lesser extent through equity,
Established
Decision at COP15, operationalised
guarantees and seed support to partner
2014, first project approved 2015
HQ
Songdo, Republic of Korea
organisations, known as Accredited Entities
Executive
Mafalda Duarte (since Aug. 2023)
(AE). Application for GCF funding goes
Director
through the AEs. AEs can be either Direct
Board co-chairs
UK/Dominican Republic
Accredited
Entities
(DAE)
comprising
Human
Approx. 300 staff members
government institutions, national banks and
resources
CSOs or International Accredited Entities (IAE)
Financial
10.3 billion USD (2014-19)
like multilateral development banks, UN
resources
9.9 billion USD (2020-23)
organisations,
international
banks
and
pledged
13.2 billion USD (2024-27)
international NGOs. Funding decisions are
DK
DKK 400 million (2014-19)
contributions
DKK 800 million (2020-23)
guided by an investment framework with a set of
six criteria
5
. All developing Country Parties to the
Convention (non-annex I countries) are eligible to receive funding from the GCF.
A critical support provided by GCF is its Readiness Programme, which is the world’s largest climate
capacity building programme with more than half a billion USD in commitments assisting 135 countries.
The Readiness Programme supports capacity building, development of institutional frameworks, initiate
programming and project development, and develop National Adaptation Plans. The NDA is also in
charge of coordinating readiness support at national level.
2.2. Governance and Management Structure
The GCF is governed by a board of 24 members, distributed equally between developed and developing
countries. Two co-chairs (one from each of the developing and developed constituencies) are elected by
the board for a period of one year. The Board has full responsibility for funding decisions, oversees
operation of all relevant components of the Fund, approves specific operational policies and guidelines,
2
3
The Copenhagen Accord,
p. 3, para 8
UNFCC (2011) The Cancun Agreements: outcome of the work of the ad-hoc working group on long-term cooperative action under the Convention.
4
During the GCF strategic period 2020-23, 67 per cent of adaptation funding was allocated to this particular group.
5
Focusing on: 1) impact (contributing to the GCF results areas); 2) paradigm shift; 3) sustainable development potential; 4) needs of recipient
countries; 5) coherence with a country’s existing policies or climate strategies; 6) the effectiveness and efficiency of the proposed intervention
including its ability to leverage additional funding.
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and funding for projects and programmes. The Board takes action on guidance from the Conference of
the Parties (COP), and through annual reports outline its subsequent action.
Denmark shares a seat on the Board with the Netherlands and Luxembourg based on an agreed rotation
scheme and priorities. Representation from Denmark at the GCF Board consists of a staff member from
the MFA. Several committees, panels and groups assist the Board in decision-making, and exercise
delegated authority from the Board if and when necessary (ref. GCF organogram, Annex 1). Denmark
currently serves on the Accreditation Committee
6
. Civil society and private sector representatives
participate as active observers in the three board meetings per year.
The GCF Secretariat has around 300 employees and is headed by an Executive Director appointed and
accountable to the Board. When fully staffed, the GCF Secretariat will have a total of 350 staff. The GCF
has no regional or national offices, though some form of regionalisation is under consideration by the
Board
7
. Denmark considers this a positive initiative as it aims to ensure closer engagement with NDAs
and AEs on project development, along with an on-the-ground presence to monitor and mitigate project
risks. However, a balance between transaction costs vis-à-vis benefits is important and Denmark will
closely follow GCF unfolding plans for enhanced regionalisation.
The World Bank serves as the trustee of the Fund and manages the financial assets. As the GCF has
matured so has the Secretariat, where the programming of 99 per cent of GCF-1 (2020-2023) resources
by end 2023 is a testimony to a well-performing body. The seven overall operational priorities outlined
in the Updated Strategic Plan 2020-2023 (USP-1) have been delivered or substantially advanced
8
.
However, the independent evaluation of GCF-1, the so-called “Second Performance Review”
9
points to
the Secretariat’s performance vis-à-vis the board as inconsistent though maturing, and highlights that
although board members appreciate the role of the Secretariat in developing and appraising funding
proposals and technical expertise, there is room for improvement concerning documents and advice to
the Board. High turnover in staff is considered a contributing factor, and an ad-hoc Board committee
set-up late 2023 is to address work-balance, compensation issues etc. Since early 2024, the GCF
Secretariat has been going through an organisational restructuring process including establishment of
new units on policy development, results management, learning and knowledge, partnerships, and re-
organisation process according to geographical regions, and abolishing of middle-management. The
Executive Director is expected to present in more details her plans for the restructuring process later in
2024.
3. Lessons Learnt, Key Strategic Challenges and Opportunities
3.1. Status of the GCF
Since the GCF adopted its first Strategic Plan in 2016, the operating context of the GCF has evolved
significantly. The latest science has highlighted the urgency of climate action and several reports
documented the climate finance gap. The Paris Agreement entered into force in 2020 and the GCF itself
has moved to a more mature stage of operations, policies and partnerships with a substantial project
pipeline of USD 4 billion in project proposals and USD 16 billion in concept notes end 2023.
Denmark expects to continue in the committee until at least end 2025 and possible until end 2028.
A 2023-study identified 9 models for regionalization. It is estimated that under the “maximum” option, the incremental costs of setting up one
regional office was preliminarily estimated to be in the range of US$ 0.35 million to US$ 0.9 million (GCF/B.37/Inf.13, October 2023)
8
GCF/B.38/inf.01/addd.04: Final report on the implementation of the Updated Strategic Plan 2020-2023, March 2024
9
GCF/B.35/07: Second Performance Review (SPR) of the Green Climate Fund: Final Report | Green Climate Fund
6
7
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The GCF Board has so far approved 253 projects with a total value of USD 53 billion, where GCF funds
constitute USD 13.9 billion. The 253 projects are
Africa Rural Climate Adaptation Finance
located in Asia-Pacific (106), Africa (104), Latin
Mechanism (ARCAFIM)
aims to introduce a
America and Caribbean (66) and Eastern Europe
practical, widely implementable model for achieving a
(14) including 111 LCDs and 64 SIDS. The majority
paradigm shift towards systematic large-scale use of
of projects are within livelihoods (167), health, food
private financial resources for rural climate change
and water security (128), ecosystems (92), energy
adaptation investments. By project completion the total
(73), forest (73) and infrastructure (68), 41 per cent
outreach is estimated at about 335,000 households with
is financed with grants, 40 per cent with loans and
1.494 million people. The ARCAFIM ultimate
beneficiaries are low-income, economically active rural
the remaining through equity, results-based
households and small producers, with specific target on
payments, seed funding or guarantees. However, as
women and youth. As part of the Danish country
of April 2024 GCF has only disbursed USD 4.3
programme for Uganda, ARCAFIM through IFAD is
billion, and even though GCF has managed to speed
supported with USD7.3 million to catalyse up to
up in 2023 with 1 billion USD disbursed, it does not
USD90 million from the private sector for adaptation
in East Africa. Total financing: GCF USD 55 million.
reflect the sense of urgency for climate action.
During the same period several examples of
synergies between Danish bilateral climate efforts and GCF funding have emerged including in Uganda
in relation to the ARCAFIM initiative lead by IFAD (see textbox above), in Kenya with a FAO/Danish
Agriculture & Food Council lead GCF-funding proposal
10
, which Denmark plans to co-finance from
2025, and in Ethiopia and Brazil where Danish support is considered in relation to a forestry initiatives
also supported by GCF under REDD+ (Ethiopia) and Amazonas initiative (Brazil).
During GCF-1, GCF accreditation of AEs reached 128 of which 110 signed legal arrangements and 99
AEs fully completed accreditation. The AEs are divided between 52 percent DAEs, 37 percent IAEs and
11 percent Regional AEs. In size, the AEs are divided between micro (17 percent), small (27 percent),
medium (28 percent) and large AEs (28 percent).
Overall, the approved 253 projects are anticipated to lead to 1 billion people with increased resilience
towards climate change and 2.9 billion tonnes of CO2 emissions avoided.
and USD 145 miollion in co-financing
Source: GCF Dashboard, April 2024
In December 2023, GCF successfully finalized its second replenishment process with new pledges from
32 countries totalling USD 12.8 billion grant equivalent
11
. The amount pledged exceeded the results from
10
11
“Transforming Livelihoods through Climate Resilient, Low Carbon, Sustainable Agricultural Value Chains in the Lake Region Economic Bloc”
Grant equivalent is calculated based on terms in Policies for Contributions.
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each of the two previous pledging rounds in 2014 and 2019 with 24 and 28 per cent respectively
12
. The
Danish pledge of 1,6 billion DKK doubled vis-à-vis GCF-1 following the same trend as previous
replenishment rounds. Denmark is the 11th largest contributor in terms of pledged amount, the fourth
largest in terms of amount pledged per capita (Monaca, Luxembourg, Norway - and probably also Sweden
when amount is known - being significantly larger) and overall the 12th largest contributor since the
establishment of the GCF. This is still significantly lower than likeminded Sweden (no. 6), Norway (no
8) but at pair with Netherlands (no 13) (see also Annex 2)
13
.
3.2 Lessons Learned 2020-2023
14
This document builds on key lessons learned from various GCF evaluations, GCF Second Performance
Review (2023), the Danish Mid-Term Review (2022) and consultations with stakeholders from civil
society and international organisations, and stakeholders and Danish embassies in Uganda, Kenya,
Rwanda (see Annex 5 for Lesson Learnt and Annex 8 for list of people consulted and list of key
background documents).
GCF moved forward on key Danish strategic priorities 2021-2023
Concerning the four priorities pursued by Denmark during 2021-2023: 1)
maximising impacts of GCF
investments,
2)
Efficiency in the Board,
3)
country ownership,
4)
safeguards and gender mainstreaming,
one of the most
significant achievements was approval and rollout of a new improved Integrated Results Management
Framework (IRMF) and Portfolio Performance Management System (PPMS). The new framework and
management system are considered more robust in tracking the Fund’s contributions to the goals put
forward by the UNFCCC and the Paris Agreement. Given the relatively young age of GCF-projects and
the long-term nature of climate impact, measurable climate effects are to date still modest
15
. Further and
importantly from a Danish perspective, the balance between mitigation and adaptation funding was
maintained during GCF-1 and a consistently high number of funding proposals approved. There was
advancement on the use of guarantees
16
; approval of a revised Readiness Strategy 2024-2027; whereas
the updated accreditation framework unfortunately fell short of addressing structural issues related to
accreditation (see further below). Subsequently, the Board and Secretariat have decided to revise
thoroughly the entire system and reaccreditation paused for three years in order to dedicate resources to
new accreditations.
Thus, some of the initial operational and institutional challenges identified in the Danish Organisation
Strategy for GCF 2021-2023 in relations to gaps in policy development, board micro management, weak
results management, challenges in the institutional governance have been partly addressed and to some
extent solved but nonetheless, challenges remain. The Board dynamics that previously resulted in long
and difficult discussions captured by COP-dynamics have improved and more contentious issues are
now planned for discussion like accreditation, letter of no-objection, salary-levels, ESS (see further
below). However, as outlined in the SPR and pointed out by GCF staff and other stakeholders
interviewed, GCF is still finding its way in order to manifest itself fully nationally and globally.
Governance improved despite protracted COVID-period
During GCF-1, Denmark jointly with the Netherlands and Luxembourg supported the GCF Secretariat
to ensure efficient and effective implementation of agreed policies, plans and approval of funding
USA and Australia returned with new pledges after absence during GCF-1, and Sweden pledged to contribute but the exact amount is not
confirmed.
13
Danish contribution 2016-2023 is 1,26% of total contributions for the period.
14
Please refer to Annex 5 for more detailed information on the GCF Second Performance Review (2023), the Danish Mid-Term Review (2022) and
the outcome of the Danish Organisation Strategy 2021-2023.
15
Application of the IRMF has taken place since 2023 with around 30 new Project Completion Reports to be submitted in 2024.
16
Launch of Green Guarantee Company to mobilise billions in climate finance | Green Climate Fund
12
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proposals and entities for accreditation. The Board work was, however, significantly challenged by the
Covid-19 pandemic, and from 2020 until early 2022 the board only convened virtually. It significantly
affected the opportunity to build networks and alliances among and between Board members, and as also
emphasised by the Second Performance Review (SPR) it affected the co-chairs’ opportunity to manage
individual Board members’ priorities and engagements. This could have severely hampered the
negotiations on the Strategic Plan 2024- 2027 and the initial discussions were difficult reflecting the split
between developing and developed countries’ interest stemming from both geopolitical divisions and the
international climate negotiations. However, following additional in-person meetings in Paris and Bonn,
the Board managed to bridge its differences and the PS approved mid-2023 as a testimony of an improved
governance climate in GCF-1. Also, the 2019 agreement on simple majority voting procedure for
decision-making in the absence of consensus were applied seamlessly to approval of funding proposals.
In a further attempt to improve governance, the Board decided to review the mandates of committees,
panels and groups under the Board by end 2024.
Operational challenge: accreditation - a major stumbling block to access GCF funding
The SPR highlighted that the accreditation process is
perceived as protracted, insufficiently transparent, and not
linked to programming. According to the Governing
Instrument
17
access should take place through accreditation of
an entity before submission of a funding proposal. The
accreditation process verifies the expertise, policies, fiduciary
standards etc. of applying entities and accreditation is granted
for five years. GCF has no right of refusal but to continue the
dialogue until the entity can live up to the criteria
18
. There are
99 fully accredited AEs, but with 25-35 projects approved a
year, not all AEs get a funding proposal approved during the
five years’ accreditation period.
Thus, during the GCF-1 period work on re-accreditation
exposed weaknesses in the model, emerging as a bottleneck to
programming and drain on the GCF’s accreditation processing
capacity, without generating commensurate benefits. GCF has
implemented a three-year pilot for a project-specific
assessment approach (PSAA) to accreditation broadening
access to GCF finance by allowing GCF to work with new
partners seeking one-off, project-based engagement.
Akamatutu’anga To Tatou Ora’anga
Meitaki (ATOM), Cook Islands
(Building
a healthy and resilient Cook Islands
Community) implemented by the Ministry of
Finance and Economic Management as
direct accredited entity. ATOM aims to
enhance the capacity of the health system
and the climate resilience of health services
in the Cook Islands. Water and food
security, safety, vector-borne diseases, and
heat-related illnesses are exacerbated by
climate-related natural hazards such as
intense cyclones and rising sea levels, and
climate-related disasters disrupt healthcare
services, disproportionately affecting
vulnerable groups in the population. The
project will further support approximately 30
communities and 22 health facilities and/or
emergency centres in 12 inhabited islands of
the 15 islands, including the 11 outer Pa
Enua islands and the main island of
Rarotonga. Total project value is 13,4 million
USD with 15,900 beneficiaries.
Developing countries, especially LDCs and SIDS continue to
highlight access to GCF funding as a challenge citing the limited number of DAEs getting funding (24
per cent). Programming gaps at country level combined with insufficient policies and capacity or
experience with climate finance among DAE candidates, have hampered the opportunity for DAEs to
apply for and become accredited, or to directly access GCF funds. Some DAEs require significant
external technical assistance to develop sufficiently robust project proposals
19
. GCF is in the process of
developing a more strategic partnership approach, and engage in national programming to strengthen
countries access to funds. A first problem analysis of root causes leading to access challenges has pointed
to what GCF has termed “topline tension” between seeking ‘gold standard’ partners who are ready to
GI, art. 45.
Interview with GCF staff.
19
Visit to Uganda Ministry of Environment revealed that the Ministry only managed to developed a proposal due to substantial support from FAO.
Many countries only have one DAE.
https://www.greenclimate.fund/about/partners/ae?f[]=field_subtype:226&f[]=field_subtype:227
17
18
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meet and oversee GCF policy standards on the one hand and seeking to enhance access to GCF, increase
direct access and private sector engagement on the other
20
. Board priority in 2023 continuing into 2024
has been to favour financing proposals with DAEs.
Operational challenge: country ownership insufficient
The above challenges in accreditation and access to funding have also had a reverse impact on country
ownership and a country-driven approach, which is one of GCF’s core principles. Even with future
enhanced focus on national programming it requires significant resources from NDAs to drive national
coordination with national stakeholders. Furthermore, a vast majority of GCF funding is challenged
through IAEs implementing regional or Multi-Country projects, with limited coordination and
engagement of national stakeholders including NDAs and DAEs
21
. Overall, the limited capacity of both
NDAs and DAEs, and the IAE
22
driven project implementation continues to challenge national
ownership.
In Oct. 2023, the GCF Board approved a revised Readiness Strategy 2024-2027
23
and revised operating
modalities of the Project Preparation Facility
24
(PPF). The improvements toward a more integrated,
country-led approach with an emphasis on programming, simplifying access to resources through multi-
year budgeting is intended for country programmes to serve as the main point of origination for the GCF
pipeline. The origination of a country-led GCF pipeline will underpin NCDs, NAPs and other climate
strategies.
Operational challenge: gender, indigenous peoples and ESS policies are not enough
The GCF has positioned itself to better address gender equality and social inclusion throughout GCF-1.
The GCF has strong gender and indigenous peoples policies and has made some steps to operationalize
them across the organisation. A policy shift in 2019 from gender sensitivity towards the higher standard
of gender responsiveness has been supported by upgrading standards and expectations for partners and
documents but so far not evaluated in terms of gender outcome. While gender and indigenous peoples
have dedicated policies, and the Gender Policy references “vulnerable populations”, there is less policy
clarity or focus on disadvantaged populations more broadly. Furthermore, GCF-1 has fewer projects
targeting women as direct beneficiaries. According to the SPR, the data on indigenous peoples is both
sparse and problematic. Only 37 per cent of proposals during GCF-1 impact potentially indigenous
peoples; however, only with reference to locations, in which indigenous peoples live and not necessarily
targeting indigenous peoples themselves.
The GCF has so far operated based on interim environmental and social safeguards standards (ESS)
adapted from the International Finance Cooperation (IFC). The Board has requested the Secretariat to
present GCF-specific environmental and social safeguards latest in 2025. In 2019, the IEU conducted an
evaluation of the GCFs interim ESS and found that it is imperative for the Fund to urgently develop and
adopt new environmental and social safeguard standards, policies, procedures, and guidelines that align
with its climate mandate and are international best practices. Major gaps in the current ESS include
Further analysis points to: Nascent country platforms, gaps in institutional capacity, policies & human capital (NDAs, DAEs & other stakeholders);
‘fly in/out’ support fails to build lasting capacity, multi-centric GCF partnerships model encourages origination via parallel channels, interests not
always aligned, hard to navigate policies/processes, cross-communication and practical barriers (language, time-zones, proximity), overloaded
accreditation function serving multiple & sometimes conflicting goals, strategic tension between seeking ‘gold standard’partners/policies versus
simplifying access, partnership model tension not distinguishing between intermediary vs project execution roles, duplicative due diligence &
compliance assessments split across accreditation/AMA and FP/FAA processes – multiple process owners, no clear minimum standards & different
risk cultures, complex policies with coherence issues, specifics not aligned with business model or risk tolerance
21
Emphasised by NDAs in interviews.
22
See also Annex 9: Out of the 13 countries included in the preparation of this document, multi-country projects comprise more than 70% of the
national portfolio of GCF projects.
23
https://www.greenclimate.fund/document/readiness-strategy-2024-2027
24
https://www.greenclimate.fund/projects/ppf
20
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inadequate monitoring of ESS compliance and insufficient guidelines on how funded projects should
report on social and environmental outcomes.
Operational challenge: GCF remains cumbersome for the private sector
The GCF has a clear and compared to some climate funds like the GEF a unique mandate to promote
the participation of private sector partners and to “catalyse additional public and private finance”
25
. The
pool of AEs from the private sector however remains limited and primarily related to banks. The GCF’s
business model is seen as relatively reactive with only limited engagement with private sector entities
from developing countries. Furthermore, the length of project approval and legal assessment timelines,
and the perceived lack of predictability by private sector actors continues to constrain private sector
participation including Danish private sector partners. A tension also persists in the GCF operating
model, between the principle of a country-driven approach and private sector investment processes. For
example, private sector programmes – and particularly multi-country programmes – have struggled with
the GCF’s restructuring and cancellation policy requirements, including the need for no-objection letters
from all country NDAs.
In 2022, the Board adopted a Private Sector Strategy, which sets out how the GCF aims to catalyse private
climate finance in a country-driven manner to meet developing countries’ needs and the objectives of the
Strategic Plan:
a) increased use of risk-mitigation instruments such as equity and guarantees;
b) strengthened focus on engaging local private sector actors, including start-ups and micro- small- and
medium-sized enterprises, as well as local financial institutions;
c) brought a more intentional focus to engaging private sector partners through accreditation.
The Private Sector Strategy and reorganisation of the GCF Private Sector department positively saw the
portfolio grew in volume and content during 2022-23 to 58 private sector projects totalling GCF funding
of USD 5,0 billion (about 35 per cent of total GCF programming) and a portfolio value of USD 22,5
billion, private sector financing for adaptation doubled compared to the IRM, including mobilised finance
from institutional investors (pension funds, insurance companies, philanthropies, and other commercial
capital providers). The mobilised private finance increased significantly with an overall leveraging factor
of USD 3,5 to 1 USD in GCF funding. A large part of the GCF’s private sector portfolio during the IRM
was oriented towards climate mitigation especially renewable energy projects and financed by senior
debt
26
.
3.3 Strategic Plan for the GCF 2024-2027 and Vision 50by30
The Strategic Plan (SP) 2024-2027 lays out GCF’s vision, strategic objectives and priorities along with
the operational and institutional priorities (for the overall structure, see table 2). It builds on the
implementation of the previous Strategic Plans 2016 – 2023, the SPR, and sets out the overall mission of
the GCF, in line with the provisions of its Governing Instrument. The SP contains an ambitious
programming and operational vision for the current phase of the GCF, which, if fully implemented, will
address the vast majority of the challenges mentioned above. It focuses on 11 result areas:
-
-
-
-
25
GI,
26
more than 100 developing countries’ climate plans (NDCs, NAPs, LTS),
doubling the number of national DAEs with GCF funding,
50 to 60 developing countries particularly vulnerable to climate change protected by early
warning systems,
190 to 280 million adopting low-emission climate-resilient agricultural and fisheries practices,
art 41-45
GCF: Final Report on the implementation of the Updated Strategic Plan 2020-2023
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-
-
-
-
-
-
-
120 to 190 million hectares of terrestrial and marine areas conserved, restored or brought under
sustainable management,
45 to 60 developing countries with low-emission climate resilient infrastructure,
20 to 30 developing countries with affordable, reliable and renewable energy,
18 to 25 developing countries with clean and efficient energy for transport, building and industry,
40-70 approved proposals for adaptation projects,
900 to 1500 local private sector early-stage ventures and MSMEs provided with early-stage capital
for innovative climate solutions,
90 to 180 national and regional financial institutions access GCF/green finance.
A specific focus of the SP is to help countries better navigate in the climate finance landscape and to
advance programming synergies with other climate funds. A further step taken in that direction was the
COP28 launch (2023) of a joint initiative on complementarity and coherence between GCF, the Global
Environment Facility (GEF), the Climate Investment Fund (CIF) and the Adaptation Fund (AF). Being
a key contributor to also the NDC Partnership, GEF, CIF and AF, Denmark has several opportunities
to increase dialogue and influence across the funds and contribute to coordination and knowledge
exchange.
Overall structure of the Strategic Plan 2024-2027
27
AREA
UNFCCC & PARIS
AGREEMENT
LONG TERM
VISION
FOCUS
THE PURPOSE OF THE GCF IS TO MAKE A SIGNIFICANT AND
AMBITIOUS CONTRIBUTION to the objective of the UNFCCC and the
goals of the Paris Agreement through successive cycles
GCF PROMOTES PARADIGM SHIFT AND IMPLEMENTATION OF
THE UNFCCC AND THE PARIS AGREEMENT
(a) Promote the paradigm shift towards low-emission and climate-
resilient development pathways in the context of sustainable
development; and
(b) Support developing countries in the implementation of the UNFCCC
and Paris Agreement within the evolving climate finance landscape
GCF AIMS TO ACHIEVE MILESTONE GOALS towards global
pathways for 2030, with targeted results based on resourcing for 2024-27:
a) Mitigation of 1.5 to 2.4 gigatonnes of CO2 equivalent
b) Enhanced resilience of 570 to 900 million people
GCF WILL DIRECT 2024-27 PROGRAMMING toward (1) Readiness
and Preparatory Support: Enhanced focus on climate programming and
direct access; (2) Mitigation and Adaptation: Supporting paradigm shifts
across sectors; (3) Adaptation: Addressing urgent and immediate adaptation
and resilience needs; and (4) Private Sector: Promoting innovation and
catalysing green financing.
GCF WILL LEARN AND ADAPT ITS OPERATIONS guided by a core
goal of enhancing access, and pursue institutional measures to calibrate its
policies, processes, governance, risk management, results management and
reporting and organisational capacity for successful delivery
MONITORING
Progress assessed by annual
reporting to the COP &
CMA
Progress evaluated through
the Integrated Results
Management Framework
(IRMF) paradigm shift level
STRATEGIC
DIRECTION
PROGRAMMING
PRIORITIES
Progress measured through
the Readiness Results
Management Framework
(RRMF) and IRMF
mitigation/adaptation &
enabling environment impact
levels & supplementary
tracking
MODALITIES,
ACTIONS AND
PARTNERSHIPS
TO DELIVER
PROGRAMMING
Progress tracked through
Results Tracking Tool (RTT)
& work programme results
framework
In September 2023, in addition to the SP, the GCF Executive Director Mafalda Duarte laid out her
50by30
vision which is a reform programme to strengthen the GCF to be able to manage a capitalisation
of USD 50 billion by 2030. As emphasized: “50by30” aims to reduce unnecessary complexity and
27
Strategic Plan for the Green Climate Fund 2024–2027 | Green Climate Fund
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transaction costs and coalesce multiple partners around a singular vision for transformation, empowering
the GCF to realise its full potential as a partner of choice for country-led climate action”
28
.
The vision in particular focuses on:
•
Enhance support for the most vulnerable people and communities.
•
Mobilise private sector participation and investments.
•
Reinvent the partnership model including the accreditation process.
•
Expedite project review and approvals.
•
Pivot operations to prioritise broad-scale, system-transforming programmes over isolated
projects.
In support of her vision, the ED launched the “Efficient GCF Initiative" early 2024 with the aim of
ensuring better access to the GCF funds including restructuring the Secretariat and a comprehensive
review of the current project and accreditation pipeline in line with SP-priorities.
4. Danish support and priorities
Overall, the aim of Denmark’s support to GCF is to reduce greenhouse gas emissions and build
resilience. Further, to increase the ability of developing countries to adapt to climate change impacts, and
contribute to making global financial flows consistent with low-emission and climate-resilient
development. Based on core funding, Denmark fully supports the mandate of GCF and in alignment
with GCF strategies seek to increase the overall performance and impact of the Fund through four
priorities outlined below.
4.1 Justification for support
GCF is still a relatively young climate fund, but as described in chapter 2 and 3, the GCF is progressively
delivering on the mandate given by the UNFCCC. GCF provides a solid basis for mobilising climate
finance and supporting particularly the most vulnerable countries with its focus on Africa, LDCs and
SIDS. Through support for the GCF, Denmark delivers on its ambition to increase mobilization of
climate finance and take a lead on climate action internationally.
The GCF is a solid platform for advancing Danish climate and development priorities because:
•
As the largest global fund dedicated to fight climate change, GCF is firmly positioned in the
international climate finance architecture, and lead contributor to ensure complementarity and
coherence between the various international climate funds.
•
GCF has a crucial role in serving the UNFCCC and the Paris Agreement and enjoys a high degree
of legitimacy, as it was established by Parties to the UNFCCC with an equal number of developed
and developing country seats on the Board.
•
In alignment with Danish development strategies, GCF has a clear vision to promote the
paradigm shift towards low-emission and climate-resilient development pathways in the context
of sustainable development; and to support developing countries in the implementation of the
UNFCCC and Paris Agreement. The vision is further backed by the 50by30 vision, and the
Efficient GCF reform initiative of the Secretariat launched recently by the new Executive
Director.
•
The Fund makes a critical and distinctive contribution in scaling up financing for adaptation and
resilience, with a focus on those countries particularly vulnerable to the effects of climate change.
28
GCF:
Executive Director unveils “50by30” blueprint for reform, targeting USD 50 billion by 2030
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•
•
•
As an operating entity of the financial mechanism of the UNFCCC and the Paris Agreement,
GCF is a key platform for Parties to live up to the Paris Agreement by providing and scaling up
climate finance to developing countries.
The GCF contributes to the realization of most of the 17 SDGs. In view of the GCF’s
comparative advantages in the multilateral climate and development architecture, Denmark
considers the following 8 SDG’s particularly pertinent: 1. no poverty; 6. clean water and
sanitation; 7. affordable and sustainable energy; 8. decent jobs and economic growth; 11.
Sustainable cities and communities, 10. reduced inequalities; 13. climate action, 14. life below
waters, and 15. life on land.
GCF has been important in the support of reaching the developed countries’ collective goal of
mobilizing USD 100 billion in climate finance to developing countries annually from 2020 to
2025, and making all financial flows consistent with low-carbon and climate-resilient societies in
line with Article 2.1c of the Paris Agreement. Similarly, the GCF constitutes a key financial
mechanism under the UNFCCC for implementation of the new, collective goal on climate
finance that is to be effective post 2025.
Denmark will pursue complementarity with for instance multilateral development banks (MDBs) and
private sources of capital to mitigate financial risks, lower investment costs, replication of innovative
approaches and scale up access to finance. To date, the multilateral climate funds have together
channelled over USD 32 billion (about USD 197 billion with co-financing) of resources for climate and
sustainability action in developing countries.
The enhanced and consistent Danish engagement with the GCF gives Denmark a strong and legitimate
voice as a committed and serious partner since 2016, which benefits Danish (and EU) priorities and
positions in climate and similar related negotiations. As such, the GCF also represents a forum for
promoting strategic interests that coincide with the Danish priorities in the UNFCCC negotiations.
The GCF constitutes continuously an important platform to manifest support for instance for adaptation
finance particularly to the most vulnerable developing countries, facilitate dialogue and build trust
between the Parties to the UNFCCC and the Paris Agreement, and ensure complementarity with the
MDBs and other climate financing mechanisms in mitigating financing risks. A recent example is “local
currency”
29
, which following global debate is scheduled for board discussion in GCF in 2024/25
30
. It is
also likely to be an issue under the COP29 guidance to the GCF with joint EU-positions, discussed during
the WB IDA replenishment, in OECD-DAC and considered for a priority area under the new Danish
Africa Strategy.
Overall, Denmark’s support to the GCF is fully aligned with the objectives and priorities of the
government's long-term strategy for global climate action: A Green and Sustainable World (2020) and
Denmark’s strategy for development cooperation and humanitarian action, The World We Share (2021).
The strategy for global climate action explicitly calls for strengthen Danish engagement with GCF
including around areas of strategy development and approval of funding proposals. A strong engagement
with GCF serves as a critical element of Denmark’s ambition to lead on climate action internationally
and seek alliances with developing countries where Denmark has considerable political and development
interests thereby playing a constructive role as bridge builders within the international climate agenda
(further on GCF strengths and comparative advantage, see Annex 6).
Local currency effect = loans in dollars (for instance from GCF, MDBs etc) increases developing countries’ debt burden in domestic currency term
when the local currency depreciates against the dollar, thus leading to higher debt burden without providing better public services (access to water,
energy, health services etc.).
30
Board work plan 2024-2027
29
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4.2 Danish priorities
Based on lessons learned during GCF-1, the Danish MTR, SPR and consultations with stakeholders,
Denmark has four priorities for the period 2024-2027:
i)
ii)
iii)
iv)
Enhanced
access
to GCF resources (including accreditation);
Enhanced country
ownership
and efficiency of GCF support at country level;
Private Sector:
Promoting innovation and catalysing green financing, and
Gender
equality and social inclusion.
Denmark will thus at board, committee, country and at high-level meetings continuously emphasize and
follow progress on: access, ownership, private sector, safeguards and gender in all interaction with the
GCF. The four Danish priorities address the current most important barriers and opportunities to
improve access for developing countries to GCF finance, ensure funding is delivered efficiently
and effectively to communities who need it the most in LDCs, African states and SIDS, and support
countries to translate their Nationally Determined Contributions (NDCs), National Adaptation Plans
(NAPs) and Long-term Climate Strategies (LTS) into climate investments and programming. Through
the priorities, Denmark will at the same time support the organisational restructuring initiated by the
Executive Director (referred to above).
The priorities have been discussed and agreed within the Netherlands, Luxembourg and Denmark board
seat. The annual seat planning will track and take these priorities into account. An overview of the GCF’s
strategic objectives and output indicators related to the Danish priorities can be found in Annex 4.
I. Enhancing access to GCF resources (including accreditation)
A core operational priority of the GCF’s 2024-2027 Strategic Plan is the elevation of “significantly
improving access” where the Board has requested the Secretariat to develop a partnerships and access
strategy to clearly articulate the different pathways for enhanced access to GCF financing, and how GCF
can engage a range of partners consistent with their own mandates.
Thus, as part of the GCF efficiency initiative and internal reform process, the Secretariat will undertake
a comprehensive review of access in its business and operating models beyond the accreditation function,
looking at deeper structural challenges associated with an unclearly defined partnership model and
modalities designed to serve too many purposes. This will be underpinned by a strengthening of the GCF
Secretariat (internal reform) and capacity development at country level with NDAs and DAEs. Hence,
this priority is also strongly linked with the second Danish priority on enhancing country ownership and
efficiency in GCF support.
Denmark’s priorities for influencing the GCF’s work with
enhancing access to GCF resources (including
accreditation)
are:
•
argue for establishing predictable and appropriate timeframes for accreditation, project approval
and fund disbursement including close follow-up on disbursements;
•
similarly, to reduce the median times taken during GCF-2 to process accreditation, readiness,
PAP and SAP proposals from review to first disbursement, relative to GCF-1;
•
argue for GCF’s ability to operate in the main languages of its stakeholders, and work to make
multilingualism the norm;
•
argue for a reformed accreditation framework and strategy including working towards phasing
out the re-accreditation mechanism;
•
examine the potential for AEs to apply their own policies, while maintaining best practice and
substantial equivalence to GCF policies;
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•
•
•
•
urge the GCF to strengthen engagement with countries, AEs and a diverse range of partners on
the ground to understand local needs and contexts, e.g. through furthering its consideration of
the needs and options including transaction costs vis-à-vis benefits for establishing a GCF
regional presence to bring GCF closer to the countries it serves.
support developing a partnerships and access strategy for consideration by the Board to clearly
articulate the different pathways for enhanced access to GCF financing, and how GCF can engage
a range of partners consistent with their own mandates;
support the continued increase in the share of DAEs in the AE network, alongside increasing the
role of DAEs in GCF programming; and encouraging and facilitating cooperation and learning
between IAE and DAEs, as well as DAE peer learning;
Engage with embassies in selected countries (for instance Kenya, Uganda, South Africa,
Colombia, Vietnam) on improvements in DAE accreditation and approval of funding proposals,
and provide feedback and influence the discussion at board level, in the accreditation committee
and in direct dialogue with the GCF-Secretariat.
II. Enhancing country ownership and efficiency in GCF support
The SP states that delivering GCF’s strategic vision and programming objectives depend at its core on
fully implementing and strengthening a country ownership approach, and thus that the GCF pipeline is
guided by a country-driven prioritization of the most needed and impactful investments.
Further, with the Executive Director “efficiency GCF initiative”, the GCF Secretariat will in consultation
with developing countries review the current programme pipeline of a total of 20 million USD including
concept notes vis-à-vis SP-priorities, and assess how proposals can become more fit for purpose and
especially correspondent to priorities within national climate plans and programmes. Also, with the
Secretariat restructuring, it will provide each country with one entry/focal point streamlining
communication including on assessment of new financial proposals.
Denmark’s priorities for influencing the GCF’s work with
Enhancing country ownership and efficiency in GCF
support
are:
•
urge GCF to review its operational capabilities, across bodies and panels, to deliver the 2024-
2027 Strategic Plan, taking account of the scale of the GCF-2 replenishment;
•
closely follow how GCF will strengthen efficiency and effectiveness through adoption of a set of
institutional priorities, designed to highlight remaining areas of institutional evolution;
•
urge country-led climate mainstreaming, policy and NDC updates, and development of NAPs
(using e.g. RPSP), follow-up with embassies on progress a country level;
•
encourage synergies between Danish bilateral and GCF climate finance activities through
alignment with national plans;
•
support the GCF Secretariat to continuously focus on national vis-à-vis multi-country financial
proposals where possible and relevant;
•
support a more dynamic and inclusive approach to country ownership and strengthen country
engagement throughout origination, approval and implementation;
•
call on GCF to collaborate with AE partners, and promote collaboration among AEs, to
structure thematically or geographically based projects and programmes that address countries’
top climate needs, impact and transition priorities;
•
urge further deployment of Simplified Approval Process (SAP) in order to support rapid
deployment of GCF resources through micro scale mitigation and adaptation interventions;
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follow-up on efficiency of the restructuring of GCF Secretariat into regional divisions with
country focal points in order to enhance country ownership.
III. Private Sector: Promoting innovation and catalysing green financing
The SP identifies private sector mobilisation as one
Tanzania Agriculture Climate Adaptation
of the four main SP-priorities during 2024-2027.
Technology Deployment Programme (TACATDP)
GCF will optimise its risk appetite and flexible
implemented by direct accredited entity CRDB Bank
financing to engage the private sector and
will strengthen resilience of Tanzania’s agriculture sector
contribute to unlock the financial flows needed by
by facilitating access to agriculture climate adaptation
technologies. This will be achieved by establishing a
developing countries for climate action.
Two areas of unfinished work from the USP-1 are:
1) more intentional identification and engagement
with strategic investment partners to mobilize
additional resources for climate action, and 2) staged
development of the Private Sector Facility (PSF)
modalities to better support private sector
programming outcomes.
lending and de-risking facility that will make these
technologies affordable to local farmers and agricultural
enterprises, accompanied by technical assistance and
support from government authorities. The project will
also strengthen awareness of climate threats and risk-
reduction processes among government, industry actors
and the financial sector. Budget USD 200 mio.
Expected no. of beneficiaries 6,1 mio.
Denmark’s priorities for influencing the GCF’s work with
Private Sector: Promoting innovation and catalysing
green financing
are:
•
•
•
call on GCF to work with AEs to attract co-investors, including inter-alia the private sector, other
climate funds, and development banks, to GCF-funded projects;
call on GDF to deploy fit-for-purpose blended finance, to further catalyse private sector
investments;
call on GCF to work with developing countries to strengthen their ability to engage the private
sector, particular local private sector, and build supportive investment environments for climate
finance;
call on GCF to help build climate investment capabilities of national and regional financial
institutions, ensuring synergy with ongoing work of regional development banks;
support GCF in launching request for proposals to identify promising partners and project ideas
for climate solution incubators and accelerators, and also accelerators of inclusive innovation
based especially on traditional, local and indigenous knowledge and practices;
liaise with Danish embassies on country specific GCF pipelines and opportunities for furthering
green Danish diplomacy and private sector engagement.
•
•
•
IV. Gender equality and social inclusion
A long-term key Danish priority is advocating for gender equality and the rights of indigenous peoples
in multilateral fora and as was the case under GCF-1, Denmark will continue to focus on gender equality
and social inclusion during SP 2024-2027. While the GCF has strong gender and indigenous peoples
policies and has taken steps to operationalize them across the organisation
31
, the SPR and civil society
groups point to that their full and effective participation at all levels remain limited. There is still a lot to
be done to ensure that the Board, Secretariat, national designated authorities (NDAs), accredited entities
(AEs) and other actors fully recognise and safeguard the rights of indigenous peoples and ensure gender
equality
32
.
31
32
SPR, p. 116
IWGIA, Sex og Samfund, consultation, April 2024
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GCF currently supports
the countries of the Amazon Basin (Brazil, Bolivia, Colombia, Ecuador, Guyana,
Peru, and Suriname)
through GCF’s proposal approval process (PAP), Simplified Approval Process (SAP),
REDD+ results-based payment pilot programme, and Readiness programme, as integral elements of the countries’
efforts to implement
the Paris Agreement and achieve the
Sustainable Development Goals. GCF has
committed over USD 671 million to date to nature-based solutions across the countries of the Amazon Basin,
avoiding more than 327 million tonnes of anticipated CO2 and enhancing the climate resilience of more than 32
million beneficiaries including indigenous people.
Denmark’s priorities for influencing the GCF’s work with
gender equality and social inclusion
are:
•
urge GCF to update its Environmental and Social Safeguard (ESS) standards at its earliest
convenience and working to ensure that safeguards on indigenous peoples take UNDRIP
33
as a
minimum standard for the rights of indigenous peoples, and not just the GCF Indigenous Peoples
Policy;
call on GCF to significantly expand deployment of the enhanced direct access (EDA) modality
and other developed financing approaches to enable more rapid access to finance for locally-led
adaptation action, engaging affected communities, civil society and indigenous peoples in
delivering to the meet the needs of last mile beneficiaries;
call on GCF to continue to advance best practice on ESS and on matters related to indigenous
peoples, local communities, gender, integrity, and information disclosure;
support indigenous peoples engagement at national and sub-national level to ensure their
involvement from concept note stage including Free Prior and Informed Consent (FRIC) and
throughout implementation, and where relevant that Indigenous Peoples Plans are incorporated;
follow-up at country level on adherence to safeguards related to gender equality and indigenous
peoples within GCF-projects;
call on GCF to further mainstream gender in GCF funded activities by taking into account the
implementation of the updated Lima Work Programme on Gender and its Gender Action Plan.
•
•
•
•
•
5. Budget
The Danish pledge to GCF-1 is DKK 1.600 million for the period 2024 – 2027. The below table shows
the Danish contribution and timing of the appropriations. The contribution is given in the form of core
support. During the initial resource mobilization (IRM) of the GCF in 2014, Denmark contributed with
a total of DKK 400 million and a total of DKK 800 million during GCF-1 (2020-2023).
§06.34.01.25
Total (million DKK)
2024
150
150
2025
450
450
2026
450
450
2027
550
550
Total
1600
1600
GCF Budget 2024-2027
GCF budgeting is currently done on an annual basis and the approved budget for 2024 divided between:
1) annual programming target of USD 1,75 to 2,2 billion in funding proposals approved by the Board,
and 2) an annual disbursement target of USD 990 million to 1,490 million, with the intent for
programming levels to be scaled up over 2025–2027. The only multi-year budget covering 2024-2027
which has been approved by the Board is on Readiness and Preparatory Support programme, where USD
501,5 million was approved for 2024 - 2027
34
.
33
34
United Nations Declaration on the Rights of Indigenous Peoples, 2007
https://www.greenclimate.fund/decision/b37-21
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In addition, a separate allocation is approved for the Secretariat, Board and Trustee currently also on an
annual basis but going ahead from the 2025-budget, there will be multi-annually budget planning (thus
end-2024, the Board will be asked to approve the 2025-2027 budget).
Entity
Board
Secretariat
Trustee
Total before contingency
Contingency
Grand total (in USD thousands)
Average Secretariat staff headcount
2024
5,947
99,962
4,531
110,439
1,999
112,439
325
Annual financial statements are prepared by the GCF Secretariat, complying with the International
Financial Reporting Standards (IFRS) framework. The Secretariat maintains appropriate accounting and
internal control systems to enable the production of reliable financial statements. These include written
policies and instructions, segregation of duties and internal checks, qualified personnel, routine audits,
and oversight of the reporting process by the Ethics and Audit Committee.
An independent audit firm (Nexia Samduk), is engaged to review and provide an opinion on whether the
financial statements have been prepared and presented fairly and compliant with IFRS.
6. Danish means of influence and monitoring
Denmark’s principal entry to and engagement with the GCF governance and leadership is through the
Board. The Board meets three time per year of approx. seven working days per Board meeting including
formal board meeting, in-person informal Board meeting, seat and constituency consultations. In
addition, high-level meetings take place at minister - executive director level about two to three times a
year in the form of dedicated meetings and shorter margin talks on topical issues for instance at the COP,
Climate Ministerial Meetings, World Bank Spring meetings, UN Climate Week etc. Further, effort is
underway to coordinate a joint field visit between the ED and the Danish Minister for Development
Cooperation and Global Climate Policy second half 2024.
MFA-KLIMA will continue its close dialogue and bilateral consultations with the GCF management team
to follow-up on key Board decisions including the Executive Director’s new restructuring reform. In
addition to the current secondment to the GCF Secretariat, MFA-KLIMA might consider relevant
secondments on an ongoing basis.
The cooperation in the shared NL/DK/LU seat is smooth and effective. As part of the recent
replenishment process, the seat agreed on updated principles and division of labour to further improve
the efficiency of the collaboration in the Board (see Annex 7). Overall, Denmark promotes its priorities
within the seat at constituency and Board meetings, but similarly through e.g. Denmark’s current
membership of the GCF Accreditation Committee. Accreditation plays a critical role in improving access
and ownership, two of Denmark’s key priority areas. Denmark will also continue to work closely with
like-mined countries. Beside the coordination with the Netherlands and Luxembourg, Denmark has in
particular regular meetings and dialogues with e.g. the Nordic countries both prior to and during Board
meetings, and coordinates closely with countries like Germany, UK, Switzerland, Austria, Canada. These
dialogues have contributed to the Board efficiency including in regard to approval processes of financing
proposals and GCF policies.
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Denmark also seeks alliances with developing countries where the dialogues enhance the understanding
of country specific challenges e.g. in regard to access and ownership and contribute to identify
opportunity for building consensus and common decision making. A key element of this Organisation
Strategy is to ensure stronger engagement and dialogue with selected developing countries (including
Uganda, Kenya, South Africa, Ethiopia, Indonesia, Vietnam, Brazil, Colombia) to optimise on potential
synergies and collaboration between GCF initiatives and Danish bilateral engagements. To facilitate
meetings between embassies and national authorities, first and foremost the NDAs, KLIMA has prepared
a template for annual status updates. These annual meetings will provide an opportunity for Danish
embassies to discuss national climate finance planning, pipelines, implementation, synergies with other
climate funds and access to climate financing in general. Where relevant, the Danish embassies will
provide MFA-KLIMA with minutes of the meetings including a country specific status update on the
progress relative to the Danish priorities which will feed into the dialogue with GCF at board meetings
and Secretariat level. In preparation of the meetings, KLIMA will host virtual meetings with involved
embassies once a year in particular on GCF updates, and once a year the contact group for the green
funds established in KLIMA will discuss general updates and relevant issues across the green funds (GEF
incl. LDCF, SCCF, GBFF, AF, CIF, L&D, UNEP) including updates to the Multilateral Climate Funds’
Action Plan on Complementarity and Coherence
35
. Additionally, DK will explore opportunities for
engagements and collaboration with the newly-formed “Africa Green Climate Finance National
Designated Authorities Network (AfDAN)”. AfDAN brings together African NDAs under the auspices
of AU to build capacity for mobilisation and enhance ease of access of climate finance in the continent.
This can be a one-stop shop for broader GCF engagements in the continent.
MFA-KLIMA will also continuously consult Danish embassies on GCF project proposals relevant for
their countries in advance of Board approval. Finally, MFA-KLIMA and embassies will when possible
and relevant visit selected GCF-projects as part of a continuous engagement with GCF.
Global and national alliances and collaboration with key stakeholders will play a key role e.g. in Denmark’s
new Africa Strategy. The aim of enhancing coordination and communication, including with a more
active involvement of Danish Embassies will support Denmark’s ambition to lead on climate action
internationally and seek alliances with developing countries where Denmark has considerable political
and development interests thereby playing a constructive role as bridge builders within the international
climate agenda.
MFA-KLIMA will continue its engagement and dialogue with Danish civil society organisations (CSOs)
and networks such as 92-Gruppen, Global Focus including IWGIA and Danish Family Planning
Association who have observer status at GCF as well as Danish Industry, State of Green, Food Nation
among others. KLIMA and representatives of Danish CSOs will discuss GCF’s policies and guidelines,
and monitoring on gender equality and safeguards including for marginalised and the most vulnerable
people. Prior to each GCF Board meeting, MFA-KLIMA arranges dialogue meetings with key Danish
stakeholders to discuss priorities and issues on the meeting agenda and receive relevant input and
information from primarily Danish CSOs and the private sector.
6.1 Monitoring
MFA-KLIMA will monitor progress on the four Danish priorities and Danish financing through general
GCF reporting procedures such as GCF annual progress and financial reports, GCF Dashboard updates,
GCF audited financial statements, reviews and evaluations from the independent evaluation unit, project
completion reports etc. MFA-KLIMA also make an annual stocktaking report and detailed minutes with
assessment from all board meetings for general distribution including to climate front-post embassies.
35
Still in draft version and will be made available on the
GCF Board website
end June 2024
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Please note that the traditional Danish Midterm Review of organisation strategies has in general been
abolished in favour of stronger focus on MOPAN and the active use of MOPAN’s in depth assessments
of multilateral organisations, development banks and global funds.
Denmark agreed to become co-lead of the MOPAN assessment of GCF in 2021 and Switzerland and
the UK have recently committed to be co-leads, discussions have commenced with the GCF on a
tentative MOPAN assessment in 2025-2026. There has not been any prior MOPAN assessment of the
GCF, and according to the GCF Governance Instrument, the Board will have to approve any
independent evaluation of the GCF. As a co-lead, Denmark will support liaison between the MOPAN
Secretariat and the GCF Board, enhance impact by promoting ownership of the assessment including by
developing countries through applying a new inclusive assessment process approach whereby offering
non-MOPAN members on the GCF Board the opportunity to participate in the MOPAN assessment,
and review and contribute to assessment outcomes. Denmark will engage early in the preparation of the
MOPAN assessment, in particular with a view to influencing the Terms of Reference to ensure inclusion
of financial management aspects. This work underpins with the MFA’s increased focus on adaptive
management, and will serve as an important tool to bridge priorities between developed and developing
countries in the Board.
During COP28 and as mentioned above, the GCF, AF, CIF and GEF issued a joint declaration
committing to develop an ambitious and concrete action plan to enhance access to climate finance and
increase the collective impact of their actions which Denmark will follow closely. Furthermore, G20
commissioned an independent review on the operations of the vertical environmental and climate funds.
The Review will focus on identifying the challenges of access and opportunities for operational
improvements, and potentially constitute an important input to one of the key Danish GCF priorities.
The study is expected to be finalised in September 2024.
Finally, the GCF Independent Integrity Unit investigates allegations of fraud, corruption, misconduct,
and other Prohibited Practices in GCF-funded activities and the GCF policy on prevention and
protection from Sexual Exploitation, Sexual Abuse, and Sexual Harassment sets out the obligations for
GCF Covered Individuals to prevent and respond to SEAH and to refrain from condoning, encouraging,
participating in, or engaging in SEAH. The Board monitors any reported instances of allegations of
misconduct.
6.2 Anti-corruption and integrity measures
GCF has zero-tolerance for project integrity violations (e.g., corruption, fraud, abuse, and other
prohibited practices). The Board has adopted various policies addressing fraud, corruption and other
prohibited practices. The Administrative Guidelines on Human Resources (decision B.08/17), refers to
violations of the Fund’s Anticorruption Policy (including Fraudulent Practices, Corrupt Practices or
Conflicts of Interest). However, the Fund has not adopted an anticorruption policy, other than in specific
policies and guidelines:
1) The Corporate Procurement Guidelines on the Use of Consultants and the Corporate Procurement
Guidelines for Goods and Services (decision B.08/21) contains provisions to prevent corrupt, fraudulent,
coercive and collusive practices, which are defined or referred to collectively as Integrity Violations. In
addition, the Corporate Procurement Guidelines on the Use of Consultants provides that the Fund will
not contract services from any country, organisation or individual specifically referred to in any current
resolutions of the United Nations Security Council or appearing on the List of Debarred Firms of the
World Bank;
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2) The Policy on Ethics and Conflicts of Interest for the Board of the Green Climate Fund (decision
B.09/03), containing provisions to prevent Prohibited Practices incl. corrupt, fraudulent, coercive,
collusive and obstructive practices, as well as harassment;
3) The Policy on Ethics and Conflicts of Interest for External Members of the Green Climate Fund
Panels and Groups (decision B.10/13), containing similar provisions on Prohibited Practices; and
4) The Policy on Ethics and Conflicts of Interest for the Executive Director of the Green Climate Fund
(decision B.10/13), containing a general provision that the Executive Director shall maintain the highest
standards of integrity in his/her personal and professional conduct and observe principles of good
governance.
In addition to the policies adopted by the Board, the Secretariat has developed interim practices to
address fraud, corruption and other prohibited practices, including anti-money laundering and countering
the financing of terrorism (AML/CFT), in its day-to-day operations
Further and as outlined in GCF’s Risk Management Framework, the Fund has robust measures to
prevent, identify and manage risks end-to-end from accreditation to funding proposal review to
implementation, using three lines of defence:
1. Accredited Entities and National Designated Authorities: as the first line of defence, they have primary
responsibility in preventing and managing project risks. AEs are assessed against GCF fiduciary
standards, environmental and social safeguards, and gender policy during the GCF accreditation process.
2. GCF Secretariat: as the second line of defence, the Secretariat conducts due diligence during both its
support to and review of funding proposals, as well as during project implementation.
3. GCF Independent Integrity Unit (IIU) and Office of the Internal Auditor (OIA): as the third line of
defence, the OIA and IIU take a preventive, proactive approach. The IIU conducts risk assessments and
in-depth reviews of projects, providing technical support to AEs, and encouraging whistleblowing,
among other measures.
7. Risks and assumptions
GCF systems for results, risk and knowledge management have evolved in GCF-1, most notably through
the Board approval of an Integrated Results Management Framework (IRMF). As part of its
accountability mechanisms, GCF has established systems to manage project risk, both upstream (before
project approval) and downstream (whilst projects are being implemented). GFC’s Project Risk
Management System, which is anchored in its IRMF, provides an overview of these systems. Systems for
risk management include GCF’s accreditation process, the GCF funding proposal review process, and
the Portfolio Performance Management System (PPMS). The GCF risk dashboard provides an overview
of GCF's project and programme portfolio, as well as information on concentration and funding, delays,
any reports of integrity or policy breaches, and financial investment risk. Overviews are updated on a
quarterly basis.
The GCF has a three-level project risk management system to address integrity risks, investment risks
and project-specific risks. The following nine policies are guiding the Risk Management Framework:
9 policies
Revised initial financial risk
management framework.
Revised risk register
Focus
Sets out the financial risk policies, risk monitoring and reporting, and risk governance
components, as updated by the Risk Management Committee.
Adopts the risk register which provides a comprehensive list of non-overlapping risk
types that concern the GCF.
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Risk appetite statement
Risk dashboard
Risk guidelines for funding
proposals
Investment risk policy
Non-financial risk policy
Funding risk policy
Compliance risk policy
Provides a statement of the levels of risk that the GCF is willing to take.
Presents an update to the risk dashboard.
Provides guidelines for the risk assessment of Funding Proposals and Concept Notes by
GCF.
Defines the investment risk management requirements related to the risk of failure of a
Funded Activity or Readiness / Project Preparation Facility (“PPF”) Proposal to deliver
the expected impact, or the risk of delay or shortfall of reflows from these activities.
This policy describes management approach to non-financial risks and the definition of
non-financial risks.
This document presents the policy governing funding risk management for the GCF.
The compliance risk policy provides a framework to deal with compliance risks.
Denmark will monitor and mitigate the following main risks through active participation in the Board.
Risk factor
Decreasing global political
interest and decline in
support of climate finance,
especially from the USA
Likelihood
Likely
Impact
Risk response
Residual risk
Major/minor - The
outcome of the coming
elections in the USA will
most likely have a
determining influence
on global support to
climate finance.
Minor – Through the
GCF Board Denmark
will continue efforts to
enhance private sector
co-financing.
Minor – Denmark will
support the reform
process initiated by the
ED. Enhanced
efficiency will be a mean
to ensure funding, also
for adaptation projects.
Minor – Initiatives to
support LCDs and SIDS
NDAs and DAEs will
be strengthened.
Minor – There is greater
attention at COP and
similar climate platforms
to strengthen synergies
and complementarities
between climate funds.
Minor – GCF new
policies will enhance the
focus on ESS, SEAH,
gender equality and
marginalised
populations.
Minor – the GCF Board
including Denmark will
support the reform
process of the GCF
initiated by the ED.
Contextual risks
Major
Continued Danish green
diplomacy in relevant spaces
including COPs and climate
summits. Building alliances and
bilateral agreements
Major
The GCF Secretariat is
developing it networks and
focus on private sector AEs
and potential finance
institutions.
Decreasing global private
sector co-financing
commitment to climate co-
financing
Unlikely
Insufficient resources to
meet the funding demand
especially for adaptation
projects from LCDs and
SIDS
Insufficient capacity in
LDCs and SIDS to develop
national project proposals
Competition with other
funds resulting in less
qualitative funding
proposals
Insufficient attention and
support to most vulnerable
and marginalised
populations
Likely
Programmatic risks
Major
The Board has agreed to be
more selective and priorities
adaptation projects from LCDs
and SIDS
Likely
Major
Unlikely
Mínor
Unlikely
Major
GCF will invest in
strengthening of national
programming and capacity
building e.g. through the
Readiness support and PPF.
GCF unique position as the
largest climate fund with
greater opportunities for scaling
and impact will continue being
lucrative for AEs and others to
pursue funding.
GCF is strengthening its
policies on Environmental and
Social Safeguards, SEAH and
gender equality.
Insufficient capacity in the
GCF Secretariat to manage
the increase in
programming resources
and number of AEs and
project proposals
Likely
Institutional risks
Minor
Continued focus on
organisational efficiency and
support to the ED in her plans
to improve capacity through a
major restructuring reform.
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Risk factor
within a reasonable
timeframe
Decline in Board efficiency
due to disagreements on
strategic direction and
leadership
Likelihood
Impact
Risk response
Continued support to
recruitment of staff up till the
agreed 350 staff members.
GCF-1 has matured the
collaboration and efficiency of
the Board and the ED has
sufficient leverage to address
emerging disagreements.
Residual risk
Unlikely
Minor
Minor – potential
disagreements will be
addressed by the ED
with support from the
Board.
The most critical assumptions for the GCF to continue implementing impactful climate finance projects
2024-2027:
•
•
•
•
•
•
Member countries honour their replenishment commitments for 2024-2027.
GCF continues to provide accreditation to AEs and especially DAEs.
AEs and DAEs are capable of developing fundable climate mitigation and adaptation project
proposals.
Board continues its currently efficient level of working with polarisation and politisation of
decisions kept to a minimum.
New results frameworks and documentation provide quality data and evidence of climate impact.
The new restructuring process of GCF Secretariat will enhance overall efficiency and
effectiveness and GCF Secretariat will maintain and strengthen its capacity to manage and
administer its mandate and obligations.
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Annexes
Annex 1 Organisation Chart
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Annex 2 GCF 2024-2027 Contribution by State (in million USD) as of March 2024
ANNOUNCED
PER CAPITA
1.3
19.12
13.6
0.02
8.57
0.4
38.3
0.8
11.4
25
25.1
0.03
9.4
8.4
0.01
5.5
8.8
11.1
81
0.8
95.4
0.03
8,3
2.8
54.7
0.4
5.8
0.4
0.7
5.9
0.0
16.8
29.5
8.8
CONTRIBUTOR
Australia
Austria
Belgium
Bulgaria
Canada
Czechia
Denmark
Estonia
Finland
France
Germany
Hungary
Iceland
Ireland
Israel
Italy
Japan
Liechtenstein
Luxembourg
Malta
Monaco
Mongolia
Netherlands
New Zealand
Norway
Portugal
Republic of Korea
Slovakia
Slovenia
Spain
Sweden
36
Switzerland
United Kingdom
United States
ANNOUNCED
33.8
172.9
162.1
0.1
333.7
4
232.2
1.1
64.8
1739.6
2169.9
0.3
3.6
43.2
0.1
324
1224.2
0.4
54
0.4
3.6
0.1
151.3
15
305.6
4.3
300
2.4
1.6
243.1
0.0
148
2000
3000
Green:
Countries that has pledged for the first time during GCF-2 (Bulgaria, Czechia, Estonia, Israel,
Mongolia) and countries that have re-pledge since IRM (USA, Australia)
36
Sweden has confirmed its pledge for 2024-2027 but not the actual amount.
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Annex 3 Accumulated pledges 2015 - 2024 (in million USD) as of February 2024
Ranked
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
Contributors
United Kingdom
United States
Germany
France
Japan
Sweden
Italy
Norway
Canada
Republic of Korea
Spain
Denmark
Netherlands
Switzerland
Belgium
Austria
Finland
Australia
Luxembourg
Ireland
New Zealand
Russian Federation
Monaco
Mexico
Pledges
5062.9
5000
4862.5
4519.7
4224.2
1433.7
996.3
995.3
836.2
600
572.5
424.7
420.2
398
379.9
354.1
284.4
221.1
145.8
71.9
27.6
13
10.1
10
Ranked
Cont.
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
Contributors
Czechia
Portugal
Iceland
Slovakia
Hungary
Poland
Slovenia
Estonia
Malta
Panama
Viet Nam
Colombia
Indonesia
Liechtenstein
Cyprus
Latvia
Bulgaria
Chile
Mongolia
Romania
Israel
Lithuania
Pledges
9.3
8.1
7.4
6.7
5.3
3.1
2.7
2.4
1.9
1
1
0.8
0.8
0.8
0.5
0.5
0.3
0.3
0.2
0.16
0.1
0.1
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Annex 4 Results Framework DOS 2024-2027
Aligned with the GCF Strategic Plan 2024-2027, the following table include the Danish priority areas, actions and means of
verification
Priority area
Enhanced access
to GCF resources
(including
accreditation)
GCF outcome and indicators
Outcome:
Doubling the number of DAEs with approved GCF funding
proposals through strengthening climate programming capacity
and increasing the allocation of GCF resources through DAEs.
Indicator: DAEs express increased satisfaction with the
engagement with and support from the GCF.
Baseline: 67 no. DAEs (2024)
Target: 135 no. DAE (2027)
MoV: GCF Dashboard
Danish actions and MoV
- Active board participation and regular
consultations with GCF Secretariat
-
- Promote prioritization of DAEs with approved
GCF funding proposals at Board level
- Active participation in the GCF Accreditation
Committee also to promote pathways to access
without accreditation and phasing out re-
accreditation
- Promote more targeted Readiness and
Preparatory Support Programme (RPSP) and
national programming
- Annual consultations with selected Danish
embassies in countries with multiple GCF projects
GCF outputs will be monitored and addressed e.g.
at relevant Board meetings.
Inputs from Embassies
- Annual meeting with the NDA
and DAEs regarding national
planning, pipeline and access to
climate financing in general
- Provide annual updates to
MFA-Climate.
Outputs:
Ensuring
predictable
and appropriate timeframes for
accreditation, project approval and fund disbursement
Reducing median
times
taken during GCF-2 to process
accreditation, readiness, PAP and SAP proposals from review
to first disbursement, relative to GCF-1;
Enhancing GCF’s ability to operate in the main languages of
its stakeholders, working to make
multilingualism
the norm;
Examining potential for AEs to apply their
own policies,
while maintaining best practice and substantial equivalence to
GCF policies;
Strengthening GCF’s engagement with countries, AEs and a
diverse range of partners on the ground to understand local
needs and contexts, including through furthering its
consideration of the needs and options for establishing a
GCF regional presence
to bring GCF closer to the countries
it serves;
Developing a
partnerships and access strategy
for
consideration by the Board to clearly articulate the different
pathways for enhanced access to GCF financing, and how
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Priority area
GCF outcome and indicators
GCF can engage a range of partners consistent with their own
mandates;
Continuing to
increase the share of DAEs
in the AE
network, alongside increasing the role of DAEs in GCF
programming; and encouraging and facilitating cooperation
and learning between IAE and DAEs, as well as DAE peer
learning.
Reformed accreditation framework and strategy
including
updated MAF
Danish actions and MoV
Inputs from Embassies
Enhancing
country ownership
and efficiency in
GCF support
Outcome:
More than 100 dev. countries advancing implementation of
their NDCs etc. through integrated climate investment
planning and/or dev. project pipelines for GCF funding.
Indicator: NDAs reporting enhanced implementation of
NDCs and development of GCF pipelines
Baseline: 47 no. of countries (2024)
Target: +100 countries with climate (2027) investment
planning
MoV: GCF Annual Report and GCF Dashboard updates
- Active board participation and regular
consultations with GCF Secretariat
- Follow GCF’s strengthening of country capacities
and enabling environments for NDCs, NAP and
LTS implementation, investment planning, and
enhanced access to GCF resources.
- Active participation in the GCF Accreditation
Committee
- Annual consultations with selected Danish
embassies in countries with multiple GCF projects
- Annual meeting with the NDA
and DAEs regarding national
planning, pipeline and access to
climate financing in general
- Provide annual updates to
MFA-Climate.
Outputs:
Review GCF operational capabilities,
across bodies and
panels, to deliver the 2024-2027 Strategic Plan, taking account
of the scale of the GCF-2 replenishment
Support country-led climate mainstreaming, policy and
NDC updates,
and development of NAPs (using e.g. RPSP)
Evolve
a more dynamic and inclusive approach to country
ownership.
To strengthen meaningful country engagement
throughout origination, approval and implementation.
Promote integrated NDC/NAP/LTS investment
planning
through improved technical support, guidance and
country programming.
To strengthen efficiency and effectiveness, GCF will adopt a
set of institutional priorities, designed to highlight remaining
areas of institutional evolution.
26
GCF outputs will be monitored and addressed e.g.
at relevant Board meetings.
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Priority area
GCF outcome and indicators
Collaborate with AE partners, and promote collaboration
among AEs, to
structure thematically or geographically
based projects and programmes that address countries’
top climate needs,
impact and transition priorities.
Enhanced
deployment of Simplified Approval Process
(SAP). To support rapid deployment of GCF resources
through micro scale mitigation and adaptation interventions.
Danish actions and MoV
Inputs from Embassies
Private sector:
Promoting
innovation and
catalysing green
financing
Outcome:
- 900-1500 local private sector early-stage ventures and
MSMEs provided with broad-based seed and early-stage capital
for climate solutions, business models and technologies with a
focus on adaptation, energy access and transport sectors; and
- 90-180 national and regional financial institutions supported
to access GCF resources, and other green finance, particular
for MSMEs.
Indicator: GCF disbursing funding to early-stage ventures and
MSMEs
Baseline: Index 0 no. of local private sector early-stage venture
and MSMEs provided with capital (2024)
Target: 900-1500 local private sector early-stage venture and
MSMEs provided with capital (2027)
MoV: GCF Dashboard annual updates / GCF Annual Report
Indicator: GCF disbursing funding to national and regional
financial institutions
Baselines: Index 0 no. of national and regional financial
institutions supported (2024)
Target: 90-180 national and regional financial institutions
supported (2027)
MoV: GCF Dashboard annual updates / GCF Annual Report
Outputs:
Work with AEs to attract co-investors,
including inter-alia
the private sector, other climate funds, and development
banks, to GCF-funded projects.
- Active board participation and regular
consultations with GCF Secretariat
- Follow GCF catalysing climate finance from the
wider finance ecosystem while engaging local
private sector early-stage ventures, MSMEs and
national and regional financial institutions
- Annual consultations with selected Danish
embassies in countries with multiple GCF projects.-
Regular consultations with Danish private sector
actors e.g. DI, SoG, Food Nation Denmark
- Annual meeting with the NDA
and DAEs regarding national
planning, pipeline and access to
climate financing in general
- Provide annual updates to
MFA-Climate.
GCF outputs will be monitored and addressed e.g.
at relevant Board meetings.
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Priority area
GCF outcome and indicators
Deploy fit-for-purpose blended finance,
to catalyse private
sector finance. GCF will leverage its de-risking instruments for
funding proposals that help scale climate solutions.
Launch request for proposals,
through which GCF will seek
to identify promising partners and project ideas for climate
solution incubators and accelerators, and also accelerators of
inclusive innovation based especially on traditional, local and
indigenous knowledge and practices.
Danish actions and MoV
Inputs from Embassies
Gender equality
and social
inclusion
The GCF will incorporate evolving understanding of just and
equitable transitions pathways in line with UNFCCC and Paris
Agreement discussions.
Indicator: GCF is tracking and applying new learning in just
and equitable transitions pathways.
Baseline: GCF ESS standards draft from 2022 (2024)
Target: Updated GCF ESS standards (2027)
MoV: GCF Dashboard
Outputs:
GCF Environmental and Social Safeguard (ESS) standards
updated.
Significantly expand
deployment of the enhanced direct
access (EDA) modality
and other developed financing
approaches to enable more rapid access to finance for locally-
led adaptation action, engaging affected communities, civil
society and indigenous peoples in delivering to the meet the
needs of last mile beneficiaries.
Continue to
advance best practice on ESS
and on matters
related to indigenous peoples (FPIC), local communities,
gender, integrity, and information disclosure.
Further
mainstream gender in GCF funded activities
by
taking into account the implementation of the updated Lima
Work Programme on Gender and its Gender Action Plan.
- Active board participation and regular
consultations with GCF Secretariat
- Follow GCF replicate innovative and inclusive
approaches, such as incubators, and accelerators for
climate technologies, solutions based on local,
traditional and indigenous knowledge, seed capital,
and expand access to green finance.
- Follow-up on GCF ESS reporting through the
revised ESS Policy.
- Annual consultations with selected Danish
embassies in countries with multiple GCF projects.
- Regular consultations with Danish CSO partners.
GCF outputs will be monitored and addressed e.g.
at relevant Board meetings.
- Annual meeting with the NDA
and DAEs regarding national
planning, pipeline and access to
climate financing in general
- Provide annual updates to
MFA-Climate.
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Annex 5 Key Lessons learnt 2020-2023
Key observations relative to the four Danish priority areas 2020-2023
The Danish Organisation Strategy for GCF 2021-2023 attempted to align the monitoring of its priority
areas through selected GCF indicators from a revised although at the time draft Integrated Results
Management Framework (IRMF). As emphasised by the GCF Second Performance Review (SPR), the
GCF is still challenged in regard to documenting actual results due to the limited number of completed
projects. Hence, available data and information on the specific indicators have been relatively limited.
During 2020-2023, Denmark used jointly with the Netherlands and Luxembourg its seat on the Board to
support the GCF Secretariat in ensuring efficient and effective implementation of agreed policies and
plans. A key function was to approve funding proposals and approving entities for accreditation. The
Board work was, however, significantly challenged by the Covid-19 pandemic and most meetings were
until mid-2022 conducted virtually. It significantly affected the opportunity to build networks and alliances
among and between Board members, and as also emphasised by the SPR it affected the Co-Chairs’
opportunity to manage individual Board members’ priorities and engagements.
In particular, Denmark used Board meetings to raise and pursue the four identified priority areas of the
organisation strategy. Due to the above described circumstances, it showed to be challenging to engage
with substantial inputs, but as outlined below the GCF moved forward on all four priorities including:
1.
Maximising impacts of GCF investments
and a Danish focus on GCF paradigm shifts in both
climate mitigation and climate adaptation efforts: Overall, 44 percent of all approved project proposals
were adaptation projects, whereas in actual grant allocations the number of adaptation projects was at
54 percent. From early 2023, Denmark engaged two external consultants to support preparations for
project approval at the Board by providing assessment of financing proposals related to Danish
priority areas. The Board also approved and supported the rollout of the new Integrated Results
Management Framework (IRMF) and its supporting guidelines, handbooks and templates to be
applied. The IRMF aims at providing greater clarity on definitions and measurement methodologies
for GCF’s priority indicators and monitoring and assessment processes. Thereby, also ensuring that
GCF financing proposals apply the same approach, and generate consistent and robust data that can
be aggregated and compared across the entire GCF portfolio. The framework is designed to track the
Fund’s contributions to the goals put forward by the UNFCCC and the Paris Agreement.
2.
Efficiency in the Board
in terms of approval of funding proposals was consistently been high even
during the two years of COVID-19 where the Board only met virtually and an average of 30 projects
have been approved each year since 2016. However, the inefficiencies within the GCF project cycle
management, accreditation and access, remained a key challenge
37
. The Board operations continued to
be challenged by a spill-over in terms of complex country and group dynamics stemming from
geopolitical divisions and the international climate negotiations where especially a few countries at
times seem to be outliers. The split between interest of developed and developing countries in the
Board diminished during 2021-2023, and simple majority voting procedure for decision-making in the
absence of consensus applied to approval of funding proposals. Further, in order to improve
There is a currently a pipeline of 155 applicants for accreditation which the GCF Secretariat as a first step will review to confirm interest, present
alternative ways of accessing GCF-funds. Further steps include development of a new strategic approach to accreditation during 2024 including if
accreditation should continuously be a tool for risk management, institution building and performance assessment. The reform is seen as crucial for
increasing access to GCF's funds. In the short term, the decision to streamline the accreditation process and the October 2023 decision to pause further
reaccreditation of EAs for the coming three years, is showing promising results and the GCF Secretariat expects to be able to accredit 25-30 new
entities in 2024.
37
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governance, it was decided to review in 2024/25 the mandates of committees, panels and groups under
the Board, including the extent to which decisions recommended by committees are adopted.
3.
The Board repeatedly confirmed
country ownership
and a country-driven approach as core principles
of the GCF and there are now 111 country programmes. In October 2023, the board approved a
revised Readiness Strategy 2024-2027 and revised operating modalities of the Project Preparation
Facility (PPF). The improvements toward a more integrated, country-led approach with an emphasis
on programming, simplifying access to resources through multi-year budgeting was intended for
country programmes to serve as the main point of origination for the GCF pipeline. This was designed
to operate in parallel with the focus on supporting implementation of NDCs, NAPs and other climate
strategies. Finally, the new readiness strategy also embedded a dedicated support window for DAEs,
and PPF would continue to be geared toward advancing DAE pipeline.
4. In regard to
safeguards and gender mainstreaming,
then all projects developed Gender Action
Plans and the new IRMF included gender disaggregated indicators. Although policies, action plans and
standards were in place, there was still limited data available and monitoring of actual ESS compliance
still work in progress for the GCF. Work on an updated ESS planned for discussion in 2023 by the
Board was rescheduled due to other urgent board matters until 2025.
The GCF projects and programmes were consistently evaluated through the Independent Evaluation Unit
(IEU), and by end 2023, the IEU had carried out 19 evaluations, with 4 more in pipeline
38
. In addition,
the IEU published learning papers and participates in peer reviews.
Further to above observations, please find below an overview of key lessons learnt primarily drawn from
the Second Performance Review (SPR) completed by the IEU, Feb. 2023; the Mid-Term Review
conducted by the MFA, June 2022; but similarly from consultations with GCF staff and stakeholders in
Denmark, online meetings with selected Danish embassies, and two field visits to Uganda and Kenya
between Jan.-April 2024.
GCF Second Performance Review 2022-23
The SPR emphasised that given the relatively young age of GCF-projects and the long-term nature of
climate impact, climate impacts were modest to date. There were indications that results are forthcoming
and although results management had been underdeveloped to serve the GCF’s needs to demonstrate
results as its portfolio matured, the SPR recognised the quality of the new results frameworks e.g. the
IRMF, RRMF, PPMS etc.
In regard to governance, the SPR found the Board to be effective in its key functions of approving funding
proposals and approving entities for accreditation. The SPR, however, raised concerns that remaining
policy gaps and blurred lines between governance and management functions and authorities were
impeding progress. According to the SPR, the GCF compared well to other international organisations in
terms of none-state representation
39
, but also that stakeholders did not share a common vision for the
Fund, leading to a too broad and “do it all” approach.
2018 – 2024 evaluations: 5 portfolio, 8 programmes, 4 thematic, 2 performance evaluations with 4 in pipeline on indigenous people; health, well-
being, food and water security result area; relevance and effectiveness of GCF’s investments in Latin American and Caribbean; approach to
whistleblowers and witnesses
39
With 315 CSOs, 88 private sector and 76 international entities registered as partners incl. 7 from Denmark.
38
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The SPR found that the GCF had not yet fully articulated the role that it wished to play at the country
level nor the contributions expected of the Secretariat, NDA, AEs and other partners. The SPR pointed
out that the GCF was still to develop a strategic approach to partnership considering NDA, AEs, civil
society and private sector; and mobilising its network to achieve better strategic and coordinated
programming and opportunities
40
. There were programming gaps at the GCF and at country levels and
there were too few private sector DAEs, weak policies, low staffing and lack of experience with climate
finance among DAE candidates. Consequently, there was a relatively small number of successful DAEs
vis-à-vis international accredited entities (IAEs).
Furthermore, the SPR found that the GCF capacity support through Readiness and Preparatory Support
Programme (RPSP) and Project Preparation Facility (PPF) were yet to show major results at scale for
DAE programming. GCF readiness support and the Delivery Partner functions were not well designed to
facilitate the type of long-term, institutional relationship necessary to anchor the GCF as a core national
partner, and countries were struggling to identify suitable entities, and entities identified were struggling
with accreditation. The approved project portfolio remains skewed towards international and regional
accredited entities (IAEs) and a relatively small number of DAEs (36 entities or 14 percent) had obtained
project funding via the GCF. Overall, the SPR found that the accreditation process remained protracted,
inefficient and insufficiently transparent, and not linked to programming. There was a lack of vision and
strategy for a manageable AE network of capable and diverse entities.
In regard to concept notes and proposals, partners continued to perceive the project appraisal and
approval cycle as bureaucratic, lengthy, inconsistent and non-transparent. Although, the GCF was
processing an increasing and substantial volume of concept notes and funding proposals, processing time
was still an issue for partners.
The SPR also found that GCF had strong gender and indigenous peoples policies, but that it was too early
to assess the results of gender equality outcomes. The SPR emphasised that there had been a decrease in
the number of projects with a particular focus on women as main target group and there was less focus
on vulnerable populations. Overall, there was limited data collected on indigenous people. GCF favoured
projects at scale with large groups of beneficiaries, which might have hampered the focus on smaller
groups of people including indigenous people.
Finally, the SPR found that the GCF approaches for entity and project risk management remained
underdeveloped and under-resourced.
MFA Mid-Term Review of the Danish Organisation Strategy for GCF, 2021-2023
An external Mid-Term Review (MTR) of the Danish Organisation Strategy 2021-23 for GCF was
concluded by June 2022. the MTR was not an assessment of the efficiency and effectiveness of the GCF-
2. Overall, the MTR found that the Organisation Strategy provided sufficient justification for the Danish
engagement with the fund. However, the MTR recommended that the rationale for the next Strategy 2024-
2027 should be underpinned by a more structured reflection on GCF comparative advantages vis-à-vis
other funding mechanisms DK finances and in relation to funding level and type of dialogue.
The MTR also concludes that the GCF had been successful in raising financial resources although the
number of participating countries has decreased from the initial 45 to 32 countries. The MTR also pointed
to a relatively low disbursement rate.
The MTR recommended that the next DOS 2024-2027 included deliberations guiding the prioritisation
of the Board work e.g. work efforts directed towards reviewing of funding proposals, and also
40
Partnership and access strategy is on the Board agenda for July 2024, and updated country ownership guidelines planned for decision in 2025.
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considerations on engagement with the Secretariat in-between Board meetings. The MTR also pointed to
the need for better use of the GCF in Danish climate diplomacy.
In regard to the reporting on the Strategy 2021-2023, the MTR recommended a stronger alignment with
GCF priorities and areas of reporting and more robust indicators and risks management.
Finally, the MTR expressed concerns about the speed and execution of GCF’s portfolio exemplified in a
cumbersome accreditation process and long project cycle management getting funding proposals from
concept stage to a first disbursement.
Both the SPR and the MTR pointed to several critical issues relevant to the Danish Organisation Strategy
for GCF 2024-2027. There was a need to strengthen the speed of access to funds and to ensure that more
DAEs engage and build capacities to pursue opportunities for climate financing through the GCF.
Simplification of procedures and access requirements including accreditation of DAEs was needed.
Denmark, the Netherlands, and Luxembourg agree that enhanced access and ownership are two key and
fundamental focus areas to pursue during the coming four years.
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Annex 6 GCF strengths and comparative advantages
1. Introduction
The Mid-Term Review of the “Organisation Strategy for Denmark’s engagement with the GCF 2021-
2023” recommended a “reflection
of GCF strengths and comparative advantages compared to other climate finance
mechanisms and initiatives supported by Denmark”
to underpin the replenishment period for 2024-2027.
This comparison of the climate funds will focus on the GCF and three multilateral climate/environment
organisations with similar features, i.e. GEF, CIF and AF. Although, the funds already have a close
cooperation as seen lately at COP28, they also have substantial differences making it difficult to compare
them 1:1. The analysis is divided into a section on “Complementarity and Coherence” looking at GCF’s
collaboration and synergies with the three other funds and a section on “Strengths and Comparative
Advantages” looking at GCF’s UN-mandate, governance and results.
1.1 Introduction to the green funds
41
The Global Environment Facility - GEF
Established in 1992, the Global Environment Facility (GEF) is a family of funds including Global
Biodiversity Framework Fund (GBFF), Least Developed Countries Fund (LDCF), Special Climate Change
Fund (SCCF) among others. GEF has 186 member countries dedicated to confronting biodiversity loss,
climate change, pollution, and strains on land and ocean health. Its grants, blended financing and policy
support help developing countries address their biggest environmental priorities and adhere to
international environmental conventions. Over the past three decades, the GEF has provided more than
USD25 billion and mobilized USD138 billion in co-financing for over 5,000 national, regional and global
projects. GEF is an operating entity of the financial mechanism of the UNFCCC
42
.
The Climate Investment Funds - CIF
The Climate Investment Funds (CIF) is one of the largest multilateral climate funds in the world. It was
established in 2008 to mobilize finance for low-carbon, climate-resilient development at scale in
developing countries. 15 contributing countries have pledged over USD12 billion to the funds. To date
CIF committed capital has mobilized more than USD64 billion in additional financing, particularly from
the private sector, for investments in over 72 countries. CIF’s largescale, low-cost, long-term financing
lowers the risk and cost of climate financing. It tests new business models, builds track records in unproven
markets, and boosts investor confidence to unlock additional sources of finance. Recognizing the urgency
of CIF’s mission, the G7 confirmed its commitment to provide up to USD2 billion in additional resources
for CIF in 2021
43
.
The Adaptation Fund - AF
The Adaptation Fund was established in 2001 and has since 2010 committed over USD1,2 billion for over
168 climate change adaptation and resilience projects in the most vulnerable communities of developing
countries around the world with over 43 million beneficiaries. AF pioneered “Direct Access” and
“Enhanced Direct Access”, empowering countries to access funding and develop local projects through
accredited national implementing entities
44
.
41
42
For GCF intro, see chapter 2.
Baggrundsnotat til ministeren for udviklingssamarbejde. Overvejelser om muligt dansk engagement i Adaptation Fund, 2023.
43
CIF Contributors | Climate Investment Funds
44
About (adaptation-fund.org)
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2. Complementarity and Coherence
As stated in the Strategic Plan 2024-2027, GCF works on complementarity and coherence within three
areas:
•
enhancing complementarity by aligning programming, processes, and policies with other climate
funds;
•
working with accredited entities to evaluate the potential to implement their own policies while
adhering to best practices and substantial equivalence to the GCF policies;
•
treating data as a strategic and collaborative resource that can be linked to other data sources to
enhance coherence and impact in climate investment programming; and strengthening
complementarity and coherence with the wider climate finance architecture.
GEF and GCF have since 2021 had a “Long-Term Vision on Complementarity, Coherence and
Collaboration”. Having similar mandates, being operating entities of the UNFCCC, GCF and GEF have
enhanced their collaboration over the years through organisation of Climate Finance Dialogues, Pilot
Coordinated Engagement and regular exchanges at Secretariat level. GCF and GEF also collaborate
around the Great Green Wall Initiative, the Amazon Initiative and SFM-REDD+.
GCF aims to enhance the partnership with AF through scaling up successful AF-programs with GCF
funding and strengthening peer learning through the joint AF-GCF support for “Direct Access Entities
Community of Practice”. Almost 20 of the Adaptation Fund’s projects have been scaled up by GCF. “That
is a great win-win in which both funds’ comparative advantages have been made use of the Adaptation Fund’s ability to
pioneer adaptation projects, and the GCF’s ability to scale up”
45
.
GCF is also exploring possibilities of synergies with CIF programming initiatives. In 2020, GCF and CIF
jointly wrote a synthesis report on synergies within financial mechanisms, which found that the potential
for synergies is large, and during the development of Strategic Plan 2024-2027 the GCF explored synergy
opportunities with relevant programs of CIF
46
.
GCF, GEF, CIF and AF established in 2021 of a joint steering committee to facilitate collaboration. The
funds have worked together on results, indicators, and methodologies for measuring impact to improve
monitoring, evaluation, methodologies, gender mainstreaming etc. The evaluation units for each fund have
met to discuss potential opportunities for synergies. The funds have also collaborated on several events
and workshops. At COP28 in December 2023, GCF, GEF, CIF and AF announced that they will bring
proposals to their governing bodies in the second half of 2024 with an action plan ahead to COP29 with
the aim of achieving synergies within programming; monitoring, evaluation and learning; and
communication and outreach
47
.
3. Strengths and Comparative Advantage
3.1 Strong UN-mandate
As the largest global fund dedicated to combating climate change, GCF holds a significant position within
the climate finance landscape. Established by the Parties to the UNFCCC with an equitable representation
of developed and developing countries on its Board, the GCF plays a pivotal role in supporting the
objectives of the UNFCCC and the Paris Agreement to provide and upscale climate finance to developing
45
46
Climate Funds unite to enhance access to climate finance and increase impact | Green Climate Fund
05-annual-update-complementarity-and-coherence-gcf-b37-inf14-add02.pdf (greenclimate.fund),
p. 2
47
Enhancing access and increasing impact: the role of the multilateral climate funds | Green Climate Fund
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nations. With a primary focus on enhancing adaptation and resilience efforts, particularly in countries most
vulnerable to climate change impacts, the Fund serves as a vital mechanism for mobilizing and amplifying
financial resources.
3.2 Governance
The governance of GCF embodies several key strengths that make it stand out compared to other climate
finance institutions.
Gender balance:
GCF has around 300 staff members at headquarters, with a close to fifty-fifty balance
between men and women and 61 nationalities. The Secretariat management consists of 15 members, where
12 are women including the Executive Director
48
. Out of the 22 board members, there are 9 women.
Governing structure and influence:
GCF consists of:
➢
a 24-member board, organized into two constituencies, having co-chairs and committee
members that are responsible for governance and oversight;
➢
a 15-member senior management team, which oversees and executes day to day operations;
➢
three independent units that facilitate accountability (see section on external evaluation and
accountability).
The board composition “ensures consensus-based decisions between developed and developing
countries” and brings a crucial legitimacy to GCF. The Second Performance Review (SPR) of GCF states
that “GCF is perceived by its members and observers as providing more opportunity for influence in
governing processes by developing country members, compared to for instance the GEF”. The board is
comprised of individuals who can influence the negotiations equally. Many of the developing country
board members works in ministries such as environment or climate and serve as UNFCCC climate
negotiators. On the other hand, the developed country board members are from ministries such as finance
or foreign affairs with fund management experience
49
.
Table 3-1 below includes a comparison of governance features for selected organisations.
Transparency and participation:
GCF seeks to ensure full transparency and participation especially around the
decision-making process. 90 percent of Board and Secretariat survey respondents in the SPR agree that
48
49
https://www.greenclimate.fund/about/secretariat#overview
Second Performance Review of the Green Climate Fund,
p. 24
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sufficient information is made publicly available
50
. Thus, for instance all board meetings are live streamed
and recorded for future purposes on the website. Board documents are available in real time on the website
at the same time as forwarded to board members. The SPR states that the GCF compares well to e.g.
GEF, CIF and AF when it comes to non-state representation, with civil society and private sector
organisations institutionalised in the governance structure from the beginning
51
. Furthermore, it states that
transparency and integrity are relatively strong in GCF, which arguably leads to a high level of
accountability.
There are permanent observers from civil society and private sector organisations present with speaking
rights at all board meetings. The GCF observer organisations include 322 civil society organisations, 90
private sector organisations and 76 international entities
52
. Compared to CIF that has 12 civil society
observers, 7 private sector observers and 5 Indigenous Peoples observers, and AF that has 9 observers.
The observer function in GCF highlights the focus on a broad network of civil society, indigenous peoples
and local community organisations that enables collaboration across organisations and countries.
Furthermore, it shows the inclusion of different and diverse set of voices to inform GCF policy and
decision making processes.
GCF has integrity policies in place, supporting public accountability and transparency
53
, which makes GCF
comparatively speaking open, inclusive and transparent with a concern for its legitimacy and
trustworthiness.
External evaluation and accountability:
The GCF is evaluated by independent evaluators and all reports are
available to the public in drafts and final versions. GCF’s has three different independent accountability
units: Independent Integrity Unit – to investigate allegations of fraud or corruption, Independent Redress
Mechanisms – to receive, evaluate and make recommendations on complaints related to the operation of
the Fund, and the Independent Evaluation Unit
54
conducting performance incl. thematic reviews. The
Independent Evaluation Unit makes evaluations based on board-approved work plans and is independent
from the Secretariat.
Governance performance and accreditation:
The SPR states that GCF’s governance performance is comparable
to other multilateral institutions at similar levels of organisational maturity as seen in table 3-1
55
. Policy
decision-making has accelerated especially in the second half of GCF-1 with several key policies approved.
The SPR assesses that “the Board is effective in its key functions of approving funding proposals (FPs)
and approving entities for accreditation and is actively pursuing options to clarify and improve Board
operations”. Accreditation in GCF has generated a very diversified network of Accredited Entities – both
in terms of organisation types and scopes. GCF has a focus on “Direct Access” related to strengthening
country ownership of programming and improvement of access to fund resources. GEF has 18
implementing agencies, mostly multilateral agencies and banks within the scope of climate change, where
GCF’s accreditation strategy is more broad, only limited by board-decisions. Currently, GCF has 113
accredited entities, including both public and private sector entities. Hereby, GCF is focused on securing
a broad access to climate finance with different types of entities.
50
51
Second Performance Review of the Green Climate Fund,
p. 28
Second Performance Review of the Green Climate Fund,
p. 26
52
Observers | Green Climate Fund
53
Second Performance Review of the Green Climate Fund,
p. 28
54
GCF Handbook – Decisions, policies and frameworks. As agreed by the Board of the Green Climate Fund from B.01 to B.30.,
p. 518
55
Second Performance Review of the Green Climate Fund,
p.23
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Overall, the diversity in staffing, inclusive decision-making structures, and a commitment to transparency
and accountability showcases strong governance. Its balanced board composition fosters consensus
between developed and developing nations, enhancing legitimacy. GCF's emphasis on external evaluation
and independent accountability units ensures integrity and efficiency in fund utilization. GCF's governance
performance aligns with other multilateral institutions, while its accreditation strategy promotes broad
access to climate finance. In essence, GCF's governance strengths underscore its pivotal role in advancing
equitable and effective climate action globally.
4. Results and volume of GCF
For GCF’s second replenishment, pledges of USD12,8
billion were confirmed from 31 countries with 19 countries
increasing their pledges compared to the previous period.
This is USD2,8 billion more than what GCF received in the
GCF-1 replenishment period
56
. In comparison, GEF
received USD5,33 billion for GEF-8 replenishment and
AF’s latest contributions are around USD255 million.
In USD billions
20
Latest Replenishment
(2022-2024)
0
GCF
GEF
AF
GCF has committed 13,9 billion USD in investments and the size of the activity portfolio has doubled in
the first two years of GCF-1
57
. Co-financing reached USD53 billion. GEF has accumulated more financing
and co-financing being established in 1994 (GCF in 2015). Comparable to CIF, GCF has diversified
geographically (Table 4). AF is a much smaller fund with less financial capacity than the others, but still
has a comparably large number of projects.
Table 4 Key data comparison between GCF, GEF, CIF and AF
Funds
Pledged financing (Billion USD)
Co-financing (Billion USD) incl. pledged
financing
Mobilisation factor
Number of projects
Number of countries
Total disbursements (Billion USD)
% disbursed out of total
Mean contribution per project (Million USD)
Danish Financing (Cumulated, billion DKK)
Source: GCF, GEF, CIF and AF websites
GCF
13.9
53
3.5
253
148
4.3
8.1
17
1.2
GEF
21.7
119.0
4.5
5000
164
16.2
13.6
3.2
3.3
CIF
11.2
64.3
4.7
407
72
4.5
7
11.1
2
AF
1.2
1.7
0.4
165
87
0.8
46.9
4.9
N/A
The vast majority of GCF initiated projects are still to reach completion. According to the SPR, many
projects are making good implementation progress, and about three quarters of all projects were rated as
having an overall satisfactory performance. Hereof 80 percent mitigation projects and 56 per percent
adaptation projects rating satisfactory. Furthermore, GCF is likely to exceed the benchmark for
mitigation
58
.
56
57
58
https://www.greenclimate.fund/gcf-2
https://ieu.greenclimate.fund/sites/default/files/document/230406-spr-final-report-top-web-isbn.pdf,
p. 8
https://ieu.greenclimate.fund/sites/default/files/document/230406-spr-final-report-top-web-isbn.pdf,.
P. xxi
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GCF has a broader scope of financial instruments compared to AF and GEF that only uses grants; and
has a relatively high risk appetite compared to AF and GEF and also has a higher average ticket size. CIF
has a blend of financial instruments, including grants, contingent grants, concessional loans, equity and
guarantees. As illustrated below the size and volume of GCF places GCF as a green market accelerator,
with potential to scale up, comparatively to AF and GEF.
Figure 2: Source: Yannick Glemaric, Executive Director. January 2023.
GCF's diverse range of financial instruments, coupled with its higher risk appetite and average ticket size
distinguishes it as a dynamic player capable of catalysing green market initiatives. In contrast, other funds
like the AF and GEF primarily utilize grants, emphasizing GCF's unique approach in leveraging various
financial mechanisms to drive climate action.
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Table 5 Overall comparison between the GCF, GEF, CIF and AF
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Annex 7 NL-DK-LUX constituency – Principles and division of labour
The Board of the Green Climate Fund
NL-DK-LUX constituency – Principles and division of labour
February 2024
The Netherlands, Denmark and Luxembourg have shared a seat in the GCF Board since the
operationalization of the fund in 2015. The first replenishment of GCF (GCF-1) covered the
period 2020-2023. The second replenishment covers the period 2024-2027 and in this period, a
new country seat allocation for the 24 members of the GCF Board will be decided and become
effective from January, 2025. During GCF-1 NL, DK and LUX continued to share a seat in the
Board. This will be the same for GCF-2. The guiding principles and division of labor for the NL-
DK-LUX constituency are presented below.
Guiding principles
1. The level of representation as Board member or alternate member is linked to the
cumulative contributions to the GCF and agreed rotation within the constituency is listed
below. The specific date for rotation will be agreed on an ad hoc basis.
2. The constituency strives to be a highly active member of the Board according to agreed
priorities both during and between Board meetings and to make contributions of high
quality to the work of the GCF.
3. All three countries regardless of their position in the Board (member/alternate/advisor)
contribute actively to the work of the constituency.
4. The Board member shall serve the interests of all three countries.
5. If the Board member is not able to attend a meeting, the Alternate member will step in,
instead of nominating another person who is not familiar with the GCF, in order to keep
continuity in the team.
6. All three countries should be given the opportunity to be a Board member and otherwise
directly engage in one of the GCF committees or groups.
7. Specific priorities of the constituency will be decided based on the GCF annual work plan
and will take into account national priorities of the three countries.
8. Co-ordination is sought with other constituencies from both developing and developed
countries as well as with the Secretariat and implementing partners.
9. All three countries will pursue broader alliances within the Board
10. Physical seat coordination will take place one working day prior to the constituency
meeting at each Board meeting.
11. The three countries aim for coordination of joint strategic priorities prior to the
commencement of each new replenishment period and will annually review priorities
before the first board meeting of the year.
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Division of labor
1. Well in advance of Board meetings, the Board member
59
is responsible for circulating a
list, which indicates the division of labor for preparing instructions for all prioritized
agenda items.
2. The list of division of labor will be based on the specific interests of each country and the
countries’ current position in the Board where the country occupying the Board seat
would take on the biggest share of the burden.
3. The Board member will compile all instructions prior to Board meetings taking into
consideration various positions within the constituency.
4. The Board member will coordinate and submit comments made to documents circulated
for Board consultation in between meetings.
5. The Board member will in principle occupy the Board seat throughout the Board meeting
but can leave the seat for the alternative for specific agenda items.
6. All three countries, irrespective of being alternate/Board member or advisor are
expected to engage actively in the margins of/during Board meetings on the priorities set
for that meeting, or other agenda items such as funding proposals.
Rotation
•
The rotation scheme is based on the assumption that there will be three formal Board
meetings per year and thus 12 meetings in total. Exception to this rule might be in the
year of approving the new Updated Strategic Plan for the next replenishment period
where there might be a number of informal board meetings. If the number of formal
Board meetings will change significantly during GCF-2, a change in the rotation will be
discussed, taking into account the first guiding principle.
Board seat and alternate position is based on the principle of:
o
DK and NL: 5 BM + 5ABM
o
LUX: 2 BM + 2ABM + USP informal BM
•
59
Where Board member is mentioned, it could also be read as his/her advisor who will undertake these actions on behalf of the Board member.
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Annex 8 List of stakeholders consulted and list of key background documents
List of stakeholders consulted
GCF staff (online calls)
•
•
•
•
•
•
•
•
Deputy Executive Director & Chief Investment Officer (CIO)
Accreditation Operations
Division of Country Programming
Office of Portfolio Management
Division of Mitigation and Adaptation
Division of Private Sector Facility
Chief Financial Officer and Chief Operating Officer (COO/CFO)
Independent Evaluation Unit
Consultations with Danish Embassies (online calls):
Brazil, Burkina Faso, Colombia, Egypt, Ethiopia, Ghana, Indonesia, Mexico, Morocco, Viet Nam
Field visits:
•
Kenya: Danish Embassy including Somalia Country Coordinator, Ministry of Finance (NDA),
National Environmental Authority (DAE), FAO (GCF) representative - Transforming
Livelihoods through Climate Resilient, Low Carbon, Sustainable Agricultural Value Chains in the
Lake Region Economic Bloc, Kenya.
Rwanda: Ministry of Environment, Green Fund, Danish Project Office, Kigali.
Uganda: Danish Embassy, Ministry of Finance (NDA) – Climate Finance Unit, UK High
Commission, Ministry of Environment and Water (DAE) – GCF project, Uganda Development
Bank (in process of GCF accreditation), IFAD ARCAFIM Uganda Coordinator
•
•
Stakeholders in Denmark
•
92 Group, IWGIA, Sex & Samfund, DanChurchAid, Oxfam, Globalt Fokus, Danish Industry,
State of Green, National Food Council, The Danish Agriculture & Food Council
MFA GCF Task Force
KLIMA: Karin Poulsen, Emilie Wieben, Merete Willum Pedersen, Jakob Tvede, Jens Fugl, Simon
Wandel, Henning Nøhr
LÆRING: Anette Aarestrup/Hans Hessel Andersen
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List of key background documents
Danish Organisation Strategy for GCF 2021-2023, March 2021
Deep-dive presentation of the green climate funds to UGKM, September 2023
Danish support for GEF (DK organisation strategy for GEF 2022-26), CIF and internal MFA note on
possible support to AF
Midterm review of Organisation Strategy for DK engagement with GCF 2021-23, June 2022
GCF Strategy Plan 2024-2027 (SP)
GCF Updated Strategic Plan 2020-2023 (USP-1)
Second performance review (SPR) 2020-2023
GCF-2 Replenishment
GCF Secretariat work programme and administrative budget for 2024
GCF Final Report on the Implementation of the Updated Strategic Plan 2020-2023, Feb. 2024
GCF Board Work Plan for 2024-2027
Governing Instrument for the GCF, Dec. 2011
Minutes from meeting in the Danida Council for Development Policy, 2021
Paper on DK/NL/LUX shared board principles, Feb. 2024
GCF website/dashboard including relevant GCF programme documents and publications
ODI/Heinrich Böll Stiftung: The Green Climate Fund, Feb. 2023
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Annex 9 GCF selected countries statistics and interviews with Danish embassies
Country
Brazil
Total GCF
finance
mil. USD
412
No. of projects
Multi-Country
National
8
2 Mitigation
2 Adaptation
4 Cross-cutting
2
1 Mitigation
1 Cross-cutting
NDAs and DAEs
NDA:
- Secretariat for International
Affairs, Ministry of Finance
3 DAEs:
- Banco Nacional de
Desenvolvimento Económico e
Social
- Caixa Económica Federal (CEF)
- Fundo Brasileiro para a
Biodiversidade (Funbio)
Key observations from interviews
8 Readiness activities
- Limited knowledge
- According to Mini. Of Finance and UNDP, GCF is considered very
bureaucratic with long and cumbersome application procedures,
both for accreditation and application for projects.
- 6 applications submitted. All rejected.
- Poor ownership of Multi-Country projects, poor information and
knowledge of outcomes
- Brazil would like to have more local and smaller adaption
projects.
- GCF has no regional or country representation, and perceived
to have limited knowledge of local issues.
- Synergy opportunities with new forest support + SSC (energy,
health and digitalisation).
- Climate and security is getting more and more important
(power cuts, droughts, storms).
- Uncertainty about the actual accreditation of Caixa (CEF).
6 Readiness activities
- good knowledge – ref. detailed briefings (Sept. 2023, Feb.
2024)”
- No DAEs! A Government Fond has been trying since 2021.
- limited capacity in sector ministries
- limited coordination between sector ministries
- difficult to measure impact from Multi-Country projects
- lack of ownership in Multi-Country projects
- local adaptation projects needed including relative to climate
and security
12 Readiness activities
- Limited knowledge of GCF
- Synergy opportunities with SSC and new forest support
Burkina Faso
136,3
10
5 Mitigation
5 Cross-cutting
2
1 Mitigation
1 Adaptation
NDA:
- Prime Ministry
DAEs:
- None!
Colombia
292,9
7
4 Mitigation
2 Cross-cutting
1 Adaptation
2
2 Cross-cutting
4
1 Mitigation
2 Cross-cutting
1 Adaptation
2
1 Mitigation
1 Adaptation
2
1 Adaptation
1 Cross-cutting
Egypt
296,9
NDA:
- National Planning Department
2 DAES:
- Findeter
- Fondo para la Acción Nacional y
la Niñez (FondoAccion)
NDA:
- Ministry of Environment
DAE:
- Attijariwafa Bank (AWB)
NDA:
- Ministry of Planning and
Development
DAEs:
- Ministry of Finance and
Economic Cooperation
Ethiopia
297,1
6
4 Mitigation
2 Cross-cutting
2 Readiness activities
- Limited knowledge of GCF
- Danish focus on the energy sector and the SSC with DEA
- opportunities to de-risk investments, building capacity in
relevant authorities, and coordination with GCF
4 Readiness activities
- Limited knowledge of GCF
- Other donors argue that ministries lack capacity to pursue GCF
funding. Often international consultants are deployed to write
applications
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Ghana
103,7
Indonesia
476,6
5
2 Mitigation
1 Cross-cutting
2 Adaptation
10
4 Mitigation
5 Cross-cutting
1 Adaptation
2
2 Cross-cutting
3
3 Mitigation
Kenya
292.7
17
8 Mitigation
6 Cross-cutting
3 Adaptation
2
2 Adaptation
NDA:
- Ministry of Finance
DAE:
- EcoBank Ghana
NDA:
- Fiscal Policy Agency, Ministry of
Finance
2 DAEs:
- Kemitraan (Partnership for
Governance Reform)
- PT Sarana Multi Infrastructure
NDA
-The National Treasury
2 NDAs
-KCB Bank Kenya Limited
- National Environment
Management Authority of Kenya
- a need to make application requirements and procedures less
bureaucratic and cumbersome
- limited coordination between line ministries
- climate and security an issue that the GCF should focus more
on. Some activities through UNICEF and AU
- More local adaptation projects needed
5 Readiness activities
- Limited knowledge (no interview conducted)
4 Readiness activities
- Limited knowledge of GCF
- Focus on energy sector and the SSC with DEA
- recommendation to give priority to GCF’s partnership approach
- strong DAEs and NDA
5 Readiness activities
-extensive knowledge of GCF, national climate plan with prioritised
GCF interventions
- GCF is considered bureaucratic with long and cumbersome
application procedures, both for accreditation and application for
projects.
- Poor ownership of Multi-Country projects, poor information and
knowledge of outcomes
- need for better intergov. coordination and readiness support
- limited capacity at DAE National Environment Management
Authority of Kenya to prepare project proposals - dependent on
external TA support
- FAO project: Transforming Livelihoods through Climate Resilient,
Low Carbon, Sustainable Agricultural Value Chains in the Lake
Region Economic Bloc, Kenya, experiencing severe delays in GCF
reviewing and approving the project.
4 Readiness activities
- Limited knowledge
- Synergy opportunities in energy sector with SSC
- need for better coordination e.g. in the energy sector among
national and international actors. Limited capacity in sector
ministries might hamper coordination as well as Mexico’s
opportunities to access GCF funding.
8 Readiness activities
- Limited knowledge of GCF
- Focus on SSC with Danish EPA but limited coordination from
Ministry of Environment relative to other activities in the energy
sector
- Energy SSC in pipeline – possible synergies with GCF
- water and access to water is the most important
Mexico
79
7
3 Mitigation
2 Cross-cutting
2 Adaptation
1
1 Cross-cutting
Morocco
259,5
8
4 Mitigation
4 Cross-cutting
3
2 Adaptation
1 Cross-cutting
NDA:
-
Ministry of Finance and Public
Credit (SHCP), Unit for Public
Credit
2 DAEs:
- Fondo Mexicano para la
Conservación de la Naturaleza
- Nacional Financiera, Banca de
Desarrollo (Nafin)
NDA:
- Ministry of Energy Transition
and Sustainable Development
4 DAEs:
- Agency for Agricultural
Development of Morocco
- Attijariwafa Bank (AWB)
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Rwanda
214.3
9
3 Adaptation
3 Mitigation
3 Cross-cutting
4
4 cross-cutting
- CDG Capital S.A.
- Moroccan Agency for
Sustainable Energy (MASEN)
NDA:
-Rwanda Environment
Management Authority
DAE
-Ministry of Environment
NDA:
-Ministry
of Finance, Planning and
Economic Development
- Ministry of Water and
Environment, Uganda
Uganda
no info on
website
12
2 Adaptation
6 Mitigation
4 Cross-cutting
1
1 Adaptation
Viet Nam
146
0
3
1 Mitigation
1 Adaptation
1 Cross-cutting
NDA:
- Ministry of Planning and
Investment
DAE:
- Vietnam Development Bank
(VDB)
Aggregated
> USD
3007 mio.
101
44 Mitigation
40 Cross-cutting
16 Adaptation
31
8 Mitigation
13 Cross-cutting
10 Adaptation
8 Readiness projects
- Very good knowledge and one of the first countries to get GCF-
support
- only positive remarks reg. ease of access to funding
- strong country ownership also to multi-country projects
- engaged with close connection to GCF Secretariat
- possible synergy with SSC
2 Readiness projects
- Engaged with NDA and Climate Finance Unit
- Contributing to the development of Uganda Private Sector
Strategy on National Climate Finance
- Bilateral support to ACARFIM (GCF project)
- possible synergy with SSC
- limited capacity in national entities (NDA, DAE)
- Uganda Development Bank applying for accrediation
3 Readiness Activities
- Limited knowledge of GCF
- Viet Nam prefers access to grants and soft loans
- GCF relevant relative the green transition agenda
- capacity issues relative to accreditation
- capacity issues relative to application procedures
- Not interested in Multi-Country projects
134 projects i.e. average 8-9 projects per country
Average USD 25 mil. per project
75% Multi-Country/regional projects
52 Mitigation (40%)
53 Cross-cutting (40%)
26 Adaptation (20%)
On average 5 readiness activities per country
General observations and feed-back from embassies:
-
Limited knowledge of specific GCF projects.
-
This simple sampling of projects in 13 countries shows a vast majority of Multi-Country projects primarily focusing on Mitigation and Cross-cutting projects. Only
20% of all projects focus on adaptation.
-
Some staff interviewed had consulted the NDA or other donor partners before the meeting. The general feed-back from NDAs was less positive in regard to the GCF
bureaucracy, lengthy accreditation processes, capacity gaps preventing accreditations, lengthy project application and approval processes, and lack of national
ownership in Multi-Country projects.
-
Climate and security perceived to be important and an area where the GCF could play a stronger role
-
Focus on the Strategic Sector Cooperation (SSC) and potential synergy effects e.g. in building capacity in national sector ministries to either pursue accreditation or
to apply for project funding.
46