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GREEN CLIMATE FUND FORCED TO DELAY INVESTMENTS DUE TO LACK OF CONTRIBUTIONS

Green Climate Fund announces delays in the implementation of its projects as leading backers have missed the deadline to deliver funds.

The Green Climate Fund (GCF) has been created to invest in environment-friendly projects in developing countries thanks to the US$10 billion funding pledged by States worldwide. However, some of the leading backers of the Fund – including the US, Canada and Australia – have not delivered their contributions within the April 30 deadline, and the GCF is currently several hundred million short of a US$4.7 billion target.

Due to the lack of financing, the Fund will be forced to delay its plans to back green projects in developing countries ahead of the Paris Climate Summit planned for December 2015; in fact, the body will be allowed to start allocating resources only when 50% of the pledged support will be delivered, and hitherto only 42% of the total money offered has been signed off. Among the leading donors, the UK, Germany, France and Sweden have all delivered their contributions, together with Chile, Indonesia and Poland; on the other hand, the US is overdue on $1.5 billion (mainly because of the fierce opposition of the Republican majority in Congress), Japan on $750 million and Canada on $130 million.

The GCF executive director Héla Cheikhrouhou said she hoped that by December the Fund would be able to present a “diverse mini portfolio” of the investments already made, in order to prove its effectiveness and foster the achievement of a global climate deal. Climate finance is indeed considered as one of the sticking points of the climate negotiations, as developing countries say they won’t be able to commit to stronger emissions cuts unless they receive financial and technological assistance.

The Fund will probably centre its investments on wind, solar and energy efficiency projects, even though clear rules delimiting the scope of its activity haven’t been issued yet. This has triggered harsh reactions especially among Green NGOs, which criticise the lack of decisions to rule out fossil fuel projects.

 

The gLAWcal Team

POREEN project

Thursday, 30 April 2015

(Source: RTCC)