Info Service on Finance and Development (Nov14/03)
Up to $ 9.3 billion pledged to Green Climate Fund for initial period of 4 years
Berlin, 21 November 2014 (Meena Raman)– At the formal ‘Pledging Conference’ of the Green Climate Fund (GCF) held in Berlin, Germany, on 20 November, twenty-one governments pledged a total of up to US$ 9.3 billion.
This included contributions from four developing countries.
A significant part of the pledges are for a four-year period (2015-2018) and are to be grants which are un-earmarked. (See details below).
Hela Cheikhrouhou, the Executive Director of the Fund, made the announcement of the total pledges at the end of the session, adding that this was “a significant step that puts the GCF as the largest climate Fund.”
The meeting was hosted by the German government and was attended also by several GCF Board members and active observers (including Third World Network representing civil society).
The meeting was facilitated by Ambassador Lennart Bage (the facilitator of the GCF’s Initial Resource Mobilisation process). In his opening remarks, Bage said that the pledging session was a “historic moment”, which was happening right before the meeting of the United Nations Framework Convention on Climate Change (UNFCCC) in Lima beginning on 1 December.
Highlights from the pledging session are set out below.
German Federal Minister for Economic Cooperation and Development, Dr. Gerd Muller kicked off the pledging session confirming his country’s pledge of Euros 750 million (about USD 1 billion), adding that it has been approved by the Parliament. He said the pledge was tied to the expectation that others will also make appropriate contributions to the GCF’s capitalisation. He said the GCF is a “game-changing Fund”.
The Swedish Minister of International Development Cooperation, Isabella Lovin said that the new “red-green government” was pleased to confirm 4 billion Swedish kroner amounting to USD 580 million, adding that this was subject to Parliamentary approval. It is for the period 2015-2018 and is in the form of grants.
The United States said it would contribute up to USD 3 billion to the Initial Resource Mobilisation (IRM) in grants and capital, and will not exceed 30% of the overall pledges to the GCF. It would provide more if others also provide further. It stressed the importance of the GCF’s Private Sector Facility.
Japan confirmed its commitment of up to USD 1.5 billion, subject to its Diet’s (legislature) approval. It is to cover the IRM period and is made up of grants to be in promissory notes. It hoped that other developing countries and stakeholders will also contribute.
France said that it would contribute Euros 774 million, which is about USD 1.035 billion. It explained that Euros 285 million is to be in concessional loans, while Euros 489 million is in grants. It is also to be for the period 2015-2018.
The United Kingdom announced a contribution of GBP 720 million (about USD 1.126 billion).
The Netherlands said it wanted to “safeguard inclusive green growth” and that investments for transformation made “good economic sense”. It announced a contribution of USD 134 million in grants over 4 years;
Finland announced a sum of Euros 80 million, subject to Parliamentary approval, adding that this amount comes from the European Emissions Trading Scheme.
Norway said it would contribute 800 million Norwegian kroner, which is about USD 130 million for the period 2015-2018. The sum is to be all in grants and additional to current climate finance. It also expects to contribute more to the initial capitalisation.
Switzerland said it would contribute USD 100 million, which will be non-earmarked and will be for the period 2015-2017.
Italy said it was proud and happy to be at the meeting which was “historic”. It announced a contribution of Euros 250 million which is to be all grants.
The Republic of Korea (which hosts the GCF Secretariat)reaffirmed its contribution of USD 100 million in grants till 2018.
Denmark said it would contribute USD 71.6 million in the form of grants.
Spain said it would provide a cash grant of Euros 13 million and a further multi-annual grant are being defined to be announced in coming days.
The Czech Republic confirmed the contribution of about USD 5.5 million from its 2015-2016 budget and will strive to further contribute from its 2017 and 2018 budget. The contribution is non-earmarked and in grants only.
Luxembourg announced Euro 5 million which is an initial contribution; is un-earmarked and in grants.
New Zealand said that it would commit to USD 3 million with “a single unconditional cash grant” and would make payment by the end of June 2015.
Poland, Canada and Colombia said it will make announcements at a later stage. Non-Annex I countries that indicated their contributions included Mongolia, Panama and Mexico.
In the earlier part of the meeting prior to the pledging session, a video message from United Nations Secretary-General Ban Ki Moon was screened. Ban said that the pledging conference was “historic” and had come through a “long and difficult path”. He said the GCF is a proud creation which is a victory for multilateral cooperation. Calling for ambitious pledges, he said the success in Berlin is crucial and will help reach universal agreement in Paris next year under the UNFCCC.
Christiana Figueres, the Executive Secretary of the UNFCCC said the meeting was “not a pledging conference” but an “important investment conference.” She added that the GCF is a most important investment from a human and finance perspective. Investments in humans (referring to vulnerable countries and populations within) “is beyond monetary value”, she added. From a financial perspective, she referred to the decision made in Copenhagen where Parties agreed to mobilising USD 100 billion (by 2020) to support transformation and resilience. While this is to be attained through a host of measures, the GCF is fundamental in this regard, by success in its capitalisation and its operations.
The USD 100 billion, she said, “is a faint level compared to the financing necessary to address climate change”. Referring to the ‘New Economy Report’ she said USD 90 trillion will be invested in infrastructure in the next 15 years which could be invested in technologies of the past or into energy transformation and resilience.
Figueres also referred to the new UNEP ‘Emissions Gap Report’ which stressed the need to get to zero emissions by the end of the century and this depends on how the USD 90 trillion is invested. She said the GCF needs to “crowd-in” these investments and that a difference has to be made within the next 20 years. After this, she said it was not possible (to make the difference). She also stressed the importance of the historic meeting and that participants are “investing in the future of your children and theirs”.
Dr. Denis Lowe, the Environment Minister from Barbados, speaking for the Small-Island Development States (SIDs) said that he had travelled a long way to stress the seriousness of the effort, given the possible extinction of islands and their populations. He wanted to “take back message of hope” that “we live to preserve the island states.
Minister of Strategic Development of Natural Resources of Peru, Manuel Pulgar-Vidal, who will host the forthcoming UNFCCC meeting in Lima next month, via a video message, stressed the importance of building trust among countries and the importance of the GCF in in this regard. He looked forward to “strong and good pledges” which would be important for good outcomes at the UNFCCC meeting.
Following is an overview of known pledges to the GCF:
Country Pledges (millions of USD $)
(GCF announced 9300.00)