E Co. bites: What does the Green Climate Fund mean by ‘impact potential’?

20 November 2018, Category: All insights, E Co. bites, Tags: , , , , , , ,

Watch our brand new, bite-sized and digestible video series, sharing our insights and experiences of designing low-carbon, climate-resilient development projects, across the globe. We discuss the who, where, what, why and hows behind successfully obtaining funding from major donors, including the Green Climate Fund (GCF) and Global Environment Facility (GEF).


When we’re talking about a project’s impact potential, we’re essentially talking about the ability of the project to contribute to one or more of the fund level impacts, that is, the Green Climate Fund’s strategic mitigation or adaptation impact areas. For an adaptation project, you essentially need to demonstrate the contribution towards increased resilience of a population or group of people, for mitigation you need to demonstrate the level of reduced or avoided Greenhouse gas emissions.

When we want to demonstrate impact potential, essentially, we need to think about how to target GCF investments for greater impact. GCF Board documents and our own experience points to the removal of barriers, especially within the public policy and regulatory framework domains, that could really help to mobilise private capital and institutional investors at scale.

What’s important to note is that the GCF board have been critical of earlier projects submitted for approval, in terms of their potential for climate impact, which, in certain cases, haven’t sufficiently been developed or well connected to the proposed activities. This was, particularly, in the case of adaptation projects where the climate-related objectives of certain projects were not sufficiently clear and the impacts of GCF funding was in question.

In these cases, project developers need to think about how best to show there are clear impact pathways. In effect, for an adaptation project this means, estimating the likely impact of climate events on assets, economic production and demand, as well as health and well-being.

Then, there’s a need to demonstrate our adaptation impact potential. For this, we can look at how our adaptation measures can prevent or reduce these losses and impacts. Essentially here, we are asking: “What is our adaptation strategy and how specifically does it articulate improved resilience?” The indicator here is, of course, the number of people benefiting from improved resilience and we can also use economic indicators say, for example, of more resilient economies to the effects of climate change. These would be such things as trade benefits or financial indicators, such as cost-savings potential or prevention of economic losses.

For a mitigation project, on the other hand, our project impact is a lot more about demonstrating how our project removes persistent barriers or addresses particular regulatory, technical or financial constraints that would prevent greenhouse gas emissions from being reduced, or locks economies into an emissions-intensive pathway or trajectory. The most obvious measure for mitigation projects, is the expected direct and indirect emission reductions and we can also think about sequestration and use some of the economic indicators I suggested for adaptation as well.

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