World’s biggest climate fund ramps up investment plans

The world's biggest multilateral climate fund said it will make its largest investments and speed up deal making as it looks to help poorer nations respond to global warming.

The Green Climate Fund's (GCF) plan to release about $1.2bn (R21bn) for 17 projects mostly in Asia and Africa follows approval by shareholders, including the US, at a meeting this week  against a fractious political backdrop that has seen development aid slashed.

Official development assistance could fall 17% this year after a 9% drop in 2024, the Organisation for Economic Co-operation and Development said in a June report, led by hefty cuts to US aid by President Donald Trump.

“At a time when collective climate action is more needed than ever, GCF is stepping up to deliver on its mandate,” said GCF co-chair Seyni Nafo.

The GCF disbursement includes $227m (R4bn) for an initiative to expand green bond markets in 10 countries. Green bond markets are where companies raise capital for projects that limit climate change or otherwise benefit the environment.

In South Asia, it will invest $200m (R3.5bn) in the India Green Finance Facility to scale renewables and energy efficiency, while in East Africa it will invest $150m (R2.6nn)  in the food system to support nearly 18-million people.

All the projects will bring the GCF investment portfolio to $18bn (R315bn) across 133 countries. So far, countries have pledged $29.9bn (R523bn) to the GCF and paid in $21bn (R367bn)

The GCF board also approved plans to speed up its work with partner organisations which can include accredited entities such as other multilateral lenders and direct access entities in developing countries.

From an average 30 months to accredit a direct access entity, the aim is to shorten the time to nine months or less by overhauling its procedures, including carrying out much of the due diligence at the project stage.

Reuters