Upcoming Climate Finance Opportunities in the GCF and NAMA Facility

On May 13th and May 21st, 2015, CCAP held two videoconferences around recent developments in the NAMA Facility and the Green Climate Fund (GCF) with Asia and LAC countries in our Mitigation Action Implementation Network (MAIN). Participants representing ministries of energy, climate change, environment and development across nine countries attended. CCAP shared new information about the NAMA Facility’s Third Call for proposals and recent developments in the GCF. MAIN countries discussed their plans to submit proposals to each of these funding sources.

The NAMA Facility and the GCF present a unique opportunity for developing countries to access climate finance, mitigate emissions and help their shift toward low-carbon economies. With climate finance a key concern of many developing countries, recent developments, such as new funding from the NAMA Facility and getting the GCF up and running, can boost the prospect of a robust and durable climate agreement at global climate talks in Paris in December of this year.

The path-breaking NAMA Facility had its 1st call in 2013, and its ambition criteria – potential for transformational change, mitigation potential, financial ambition, and sustainable development co-benefits – have helped create a “gold standard” for transformational NAMAs, which go beyond one-off projects and can help transform entire sectors. In its two rounds, the NAMA Facility has funded eight NAMAs in five sectors across five regions, selecting projects on the basis of eligibility, ambition, and feasibility.

Source: NAMA Facility

The NAMA Facility has evolved since its Second Call last year. Funders Germany and the UK have been joined by Denmark and the EU, with 85 million Euros in financing now available. In the third round, the facility has increased the funding volume for individual NAMA Support Projects to € 5-20 million (from € 5-15 million). The outline template is similar, though submitters are now asked to depict the NAMA’s Theory of Change. The application for the 3rd round, which is open until July 15th, 2015, can be found online here. The Facility has also shared a useful factsheet on the Ambition Criteria, specifically focused on the potential for transformational change.

The GCF forms part of the official financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC). Like the NAMA Facility, it uses a competitive application process that emphasizes transformation (or “paradigm shift”) as key criterion in evaluating proposals. The Fund is governed by an independent secretariat and a 24 member board, with equal developed and developing country participation. The GCF also has significantly more funding (more than US$ 10 billion has already been pledged), can approve and finance larger proposals (currently, there is no limit to funding allowed), and will support adaptation as well as mitigation projects (the fund will aim for a 50:50 balance). This provides an opportunity for countries to submit cross-cutting NAMAs, encompassing both mitigation and adaptation actions in building green resilience.

Over half of the more than US$ 10 billion pledged to the GCF is now ready to be disbursed. On May 23rd, the GCF signed a contribution arrangement converting Japan’s pledge of US$1.5 billion, which carries the Fund over the required 50% threshold to begin allocating resources for projects and programs. It is expected to commit its first round of funding at its 10th board meeting, in advance of the December’s UNFCCC negotiations. GCF proposals to be considered at this meeting, likely in November, should be submitted for consideration by the end of July. Concept notes (voluntary) can be submitted anytime and the Secretariat will provide feedback within 2-4 weeks. This is an excellent opportunity for countries to receive early feedback from the Secretariat to help refine their submissions.

GCF Proposal Approval Process

Source: Center for Clean Air Policy, adapted from Green Climate Fund

To provide further guidance to potential applicants, the GCF has prepared an appraisal toolkit for developing GCF proposals, which can be found here. The Secretariat also recently released a resource guide for understanding and engaging with the GCF. Additional information about GCF policies and procedures, as well as links to key documents, including the new concept note template and funding proposal template, can be found here.

CCAP encourages countries to submit NAMA concept notes to each of the funds to help them refine NAMAs currently under development and start thinking through the process of new ones. Even if uncertain about submitting full proposals to this round, going through this process and receiving feedback can help make submissions more competitive in the long run.