As the Green Climate Fund (GCF) opens its doors and other sources of climate finance scale up their support to developing countries, the coming years will be pivotal in helping countries convert their commitments under the Paris Agreement into financeable investment strategies.
Early action on INDC conversion is critical. For many developing countries, the implementation of national climate change plans represents significant new efforts that will require putting in place enabling environments that attract low-carbon investment. This will in turn improve countries’ capacities to develop long-term strategies and subsequent climate commitments. At the GCF’s early stages of operation, supporting the development of programs anchored in a broader country strategy can help promote ambitious action and mobilize private financing.
Drawing from CCAP’s policy brief, Next Steps for Converting INDCs into Action, there are several key considerations for the GCF to effectively take forward the work of INDC conversion:
INDC conversion should be a strategic focus of support: The GCF should significantly scale-up resources for readiness and project preparation support. At the same time, the approval process for readiness and project preparation funds should be simplified and streamlined to allow for timely disbursement of resources.
Support for INDC conversion should match country needs: The Fund’s readiness and project preparation support should respond to the different types and levels of support countries require as they carry out the conversion process. The GCF’s newly-established project preparation facility (PPF) should afford countries the flexibility to seek support for projects of all sizes, and allow countries to work with the partner that best suits their needs. The readiness program should complement the project preparation initiative by financing more activities that are earlier in the project cycle, including the development of concept notes and preparation of country programs.
Support should go towards the development of INDC investment strategies or national climate finance strategies that consider all sources of finance: The Fund should give all countries the opportunity to develop a broad climate finance strategy that can help attract financing from a wider set of public and private sources and identify strategic and catalytic uses of GCF support. To promote ambitious action anchored in a country’s INDCs, these strategies should be used as a primary driver of Fund programming, and should also be recognized by other funding agencies and donors to help channel their own funding.