About the GCF

◆ Introduction of GCF
  • Green Climate Fund(GCF) was established for the purpose of mobilizing and managing funds from developed countries to help developing countries reduce damages from climate change and adapt to it.
  • It could be deemed as the World Bank in green climate area, and it is often called the second World Bank . As the financial mechanism of the United Nations Framework Convention on Climate Change(UNFCCC), it is the world’s largest fund for climate change responses. Unlike Global Environment Facility(GEF) and other Funds, its investments are centered on responses to climate change including reduction of greenhouse gases.

General Information

  • Background for establishment
    • GCF was created because of ①Increases in global average temperatures due to greenhouse gas emission increases and subsequent sea level increases, ②frequent occurrences of natural disasters such as typhoons, heavy rain, heavy snow, droughts, wildfires and desertification, and ③need for collective responses by global society to address destruction of ecosystem, lack of food and drinking water and occurrences of various diseases
  • Purpose
    • GCF was launched by global efforts to minimize the above climate issues and to help developing countries adapt to climate change and reduce greenhouse gases for bring about a paradigm shift toward climate resilient sustainable development.
  • Ground for establishment
    • In accordance with the Article 3-1 of UNFCCC, developed nations should support financially developing nations with their common but differentiated responsibility and respective capabilities.
  • Major Timeline
    • 2009. 12: The general concept for GCF was first proposed(UNFCCC COP 15, Copenhagen).
    • 2010. 12: The COP decided to establish GCF(COP 16, Cancun),
    • 2011. 12: GCF’s Governing Instrument was adopted(COP 17, Durban).
    • 2012. 10: Decision was made to select Songdo of Incheon as the host city of the Secretariat(GCF second Board Meeting).
    • 2012. 12: The COP endorsed the decision to base GCF Secretariat in Songdo(COP18, Doha).
    • 2013. 12: The Fund established its permanent headquarters in Songdo(G-Tower).
    • 2014. : Following the establishment of its operational principles and guidelines, GCF commences its initial resource mobilization.
    • 2015. : The first investment decisions are taken.
    • 2016. : Marks GCF’s first full year of operations, with the Fund developing a project portfolio of 35 projects, worth over USD 1.5 billion.
    • 2017. : The Fund implemented 19 projects, totaling USD 633 million in GCF resources.
    • 2018. : With over USD 5 billion in resources committed to climate change projects, GCF launches its first ever replenishment.
    • 2019. : Contributors have pledged more than USD 9.8 billion for the GCF first replenishment period.
    • 2022. : First in-person meeting after global pandemic was held to discuss about the schedules pf the second replenishment.

GCF Structure

  • GCF is largely composed of Board, Secretariat and Trustee.
    • The GCF Board is charged with the governance and oversight of the Fund’s management. GCF has an independent Secretariat, accountable to the Board, and it is responsible for executing the daily operations of the Fund. Trustee manages financial resources.
      • Board
        • Function: Board is the key to GCF governance. It makes overall decisions on the operation of GCF, including approvals of projects for developing nations and the operation of the Secretariat.
        • Composition: 24 board members and 24 alternate board members(total 48 members). The Board is made up of an equal number of members from both developed and developing nations. They serve 3 years.
        • Co-Chairs: GCF Co-Chairs serve 1 year. The co-chairs positions are held by one developing and one developed country for a period of one year. Co-Chairs are elected on a rotating basis by continent.
      • Secretariat
        • Function: GCF has an independent Secretariat, accountable to the Board, and it is responsible for executing the daily operations of the Fund, including administration, legal and financial matters.
        • Executive Director: Mafalda Duarte(Portugal, term:’23.8.~ ‘27.7.)
        • Location: G-Tower, 175, Art center-daero, Yeonsu-gu, Incheon
      • Trustee
        • Function: Trustee is a financial institution designated to manage effectively assets and funds of GCF. It manages GCF funds, and records and reports financial status of the Fund.
        • Interim trustee: In 2010, the Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC) invited the World Bank to serve as interim trustee of the Green Climate Fund(COP16, Cancun of Mexico). It has served as the trustee of the Green Climate Fund since April of 2012.

GCF resource mobilization

  • Republic of Korea has contributed USD 100 million in initial resource mobilization (’15~‘18), USD 200 million in GCF-1 replenishment(’20~‘23) and USD 300 million in GCF-2 replenishmenrt(’24~‘27).
    • Refer to GCF web page for detailed information.
      Website of GCF
      • Source: Analysis on effects of GCF to Incheon economy
        (Incheon Institute, 2024, Researcher Chanyeol Park)

Timeline and reasons for success in the hosting of GCF

Timeline

  • 2012. 2. 22: Selected as candidate city for GCF (Ministry of Economy & Finance→Incheon⋅Seoul)
    • 2012. 3. 5: Submission of application to host GCF(Incheon→Ministry of Economy & Finance)
    • 2012.3.13:Presentation for host proposal(Ministry of Economy & Finance Selection Committee)→ Selected Incheon as Korea’s host city
  • 2012. 4. 15: Submission of Korean government’s host proposal(GCF interim Secretariat)
    • Candidate states(6): Korea, Germany, Swiss, Mexico, Poland, Namibia
  • 2012. 8. 23 ~ 25: Korean government delegation’s participation in GCF first Board Meeting(Geneva, Swiss)
    • Selection process(multiple rounding) - 6 nations’ presentation
  • 2012. 9. 16 ~ 18: Evaluation committee meeting(Washington DC, USA)
    • After evaluation, Korea, Germany and Swiss got green light
  • 2012.10. 18 ~ 20: GCF Second Board Meeting(Songdo of Incheon)
    • Incheon’s winning of bid to host GCF Secretariat
  • 2013. 12. 4: Opening of GCF Secretariat(Songdo of Incheon)

Reasons for success in hosting

  • Nation’s role as a mediator in global cooperation
    • Korea hosted successfully international conferences and produced meaningful results, including G20 Seoul Summit, Busan ODA Forum and Nuclear Security Summit.
  • Nation’s continued efforts for green growth with international organizations like Global Green Growth Institute(GGGI) and research institutes like National Institute of Green Technology (NIGT)
    • Recognition of nation’s efforts and leadership, including introduction of regulation of exhaustgas emissions and emission trading scheme, and establishment of GGGI and scale up of ODAto over USD 5 billion
  • Broad and effective efforts by central government and Incheon City to host GCF
    • The nation has persuaded foreign leaders and created consensus on need for hosting GCF by fully utilizing opportunities such as G20 and Rio+20 Conferences.
    • The government has systemically made efforts to host GCF with private sector’s organizing committee led by the head of Korea International Trade Association by dividing roles
  • Full support from Incheon citizens and civil servants
  • Recognition of Songdo as the green city with foreigner-friendly living and working environment including G-Tower

GCF Projects for developing nations

  • Recipient: Developing nations that are UNFCCC members and classified as nations vulnerable to climate change
  • Project areas: Climate Change mitigation and adaptation for developing nations(50:50)
    • More than 50% of financial resources are allocated to small island developing states(SIDS), least developed countries(LDCs) and African States.
      Area, Project field로 구성된 표
      Area Project field
      Mitigation
      (Greenhouse gas emission reduction)
      • Low carbon energy production and supply
      • Low carbon transportation
      • Energy efficiency improvement in building, city, industry and equipment
      • Utilization of forest and land
      Adaptation
      • Livelihoods of residents and local communities vulnerable to climate change
      • Infrastructures and artificial environment
      • Health service, food and water security
      • Ecosystem services
  • Number of projects: 386 projects, 133 nations, USD 61.5 billion(GCF: USD 16 billion)
  • Project effects: Reduction of 3.1 billion tonnes of CO2 equivalent and 1 billion people benefited
  • Accredited entities: 139 entities(Korean entities: Korea Development Bank(KDB), Korea InternationalCooperation Agency(KOICA), SK Securities CO., LTD)

To further increase effects of GCF

  • It is urgently needed to increase national competitiveness and build infrastructures for green industries. It could be realized by clustering promising green climate related industries for strategic growth of domestic climate technologies and their advancement to global market.
    ⇒ Regional and national attention and support is required for Green Climate Integrated Complex(G-Blocks) project

    <Project overview>

    • (Project Name) Green Climate Integrated Complex(G-Blocks)
    • (Location) 24-1,2,3, Songdo-dong, Yeonsu-gu, Incheon (near G-Tower)
    • (Area) Site area: 18,500㎡ / Total floor area 112,407㎡
    • (Cost) KRW 551.8 billion
    • (Detail) Creation of green climate cluster: business space, international conference hall, Cooperation platform, etc.
    To further increase effects of GCF
    • The above image is an example, and design will be decided later through design competition.