As the largest sources of climate finance in the world, the superiority of the Green Climate Fund (GCF) financing lies in its flexible nature in helping developing countries turn various climate change impact management plans into concrete actions. It is called as unique because the GCF is able to mobilise funds from the public (government) and private sectors, involve actors from various sectors and can offer a combination of various financing instruments ranging from loans, equity, guarantees and grants to provide specific solutions to overcome investment barriers for climate change projects.

The GCF governance provides a broad framework and general direction so that its board of management of the institution has the freedom to allocate climate funds with commitments that have now reached USD 10.3 billion. In carrying out this discretion, the GCF Board members are responsible for making policies that guarantee the achievement of the main objectives of the climate fund, namely, to promote paradigm shift towards sustainable development that is resilient to climate change.

The flexibility of the GCF can be seen from those who can access the funds, the types of financing instruments provided, the types of projects financed and the approaches used by each country in implementing climate projects, including in determining the types of programs and projects that are prioritized (country ownership). This is because each country has different challenges with its own uniqueness in carrying out efforts to mitigate and adapt to the impacts of climate change.

In addition, various parties can access the GCF climate funds ranging from the public sector, the private sector, development agencies, commercial banking, to non-governmental organizations (NGOs) to finance the implementations of projects and programs that contribute to climate change impacts mitigation and adaptation efforts in developing countries. In the public sector, GCF services have even been extended to not only government institutions, but also to state-owned enterprises (SOEs).

The private sector is one of the key actors that must be involved in the efforts to mitigate the climate change impacts. Even though the GCF is the largest climate fund, it still cannot compete with the financial resources available in the private sector. Therefore, the GCF has engaged private businesses to mobilize global institutional investors to participate in financing the climate projects, while encouraging private parties in developing countries to provide climate finance solutions that can be funded.

From this collaboration the GCF can offer not only a variety of financing instruments as mentioned above, but also unique and flexible financing mechanisms and services, including de-risking investments, bundling of small-scale projects into portfolios that are attractive to institutional investors, supporting capacity development for institutions in developing countries to be able to access GCF funds, as well as assisting in developing public and private partnership schemes.

The GCF gives freedom to each country to compile a list of priority sectors to be funded by the global climate fund. For Indonesia, based on Country Programme document compiled by the Fiscal Policy Agency as the GCF National Designated Authority, the priority sectors are:

MITIGATION

Forest and land use
Agriculture
Transportation energy
Garbage/waste treatment
Industrial process and product utilization
ADAPTATION

Economic resilience
Social security and livelihood
Ecosystem and landscape resilience
Stakeholders in Indonesia can choose one of these sectors in developing a work plan for climate change mitigation and adaptation programs to access GCF funds.

The funding provided by the GCF is not only diverse, but also provides opportunities for the development of a scale-up project. In the GCF performance evaluation report published in September 2019, one of the stakeholders appreciated the uniqueness of the GCF as a partner in climate finance, which was not only able to finance so that an idea for mitigating and adapting to the climate change impacts could be a solution, but also in making the solution ultimately independent to finance themselves.

So, what are you waiting for? Convey your ideas that can support climate action plans and priorities soon.