Bold business solutions: how the GCF works with the private sector
The Green Climate Fund (GCF) Private Sector Facility aims to bring "bold business solutions" to mobilise private funds to address climate change.
Following the 18th Green Climate Fund (GCF) Board Meeting, E Co. has published its latest GCF insight. This edition explores stakeholders’ perceptions of the Fund’s Private Sector Facility and the most recent “Mobilising Funds at Scale” Request for Proposals.
In order to increase funding for the adaptation to and mitigation of climate change, private-sector funding is essential. However, there are significant barriers to accessing this funding. The main barriers are political and financial risks, particularly in those countries that are most vulnerable to climate change and where the private sector is not yet fully developed.
GCF’s “Mobilising Funds at Scale” offers a total of USD 500 million to private companies with “bold business solutions” in order to minimise those political and financial risks.
As part of its independent work with GCF, E Co. strives to provide deeper thinking. The GCF insight series provides nuanced surveys and reports that deepen and increase understanding both of GCF processes and applicants’ experiences.
This edition of GCF insight looks at who did and did not apply for this funding and why and what the main barriers to applying are. One hundred stakeholders were surveyed on their reasons for applying or not applying and the main challenges they faced. In-depth interviews were also conducted with five stakeholders. The main reasons for applying were the availability of secure, up-front funding, making a lasting impact, gaining accreditation, and expanding existing activities. The call provided “an opportunity to remove existing market barriers, uncertainties and risks hindering private investments in new climate actions in my [the applicant’s] country.” The main reasons for not applying were limited financial/human resources, cumbersome requirements, and the tight deadline. As one respondent put it: “in reality, the first challenge was the deadline – if we had more time we would have been able to put something together.” Importantly, the survey found that 60% of those applying had problems with the application and that more and better information on the application requirements and process is required. One respondent specifically mentioned they would like “more clarity on the type of projects that can be funded.” Another stated that “more material on guidance would be useful.” Most participants understood that the GCF set up the PSF in an attempt to attract the largest possible mobilisation of private capital.
Read about the findings and download the report here. We hope you find it useful and would love to hear your feedback.