GCF implements its projects through partnerships with Accredited Entities. The Fund does so utilizing a variety of financial instruments including grants, concessional debt financing, equity and guarantees. GCF private sector support includes assisting entities to tap into financial markets.
Accredited Entities are the key agents in GCF's funding proposal cycle. They are responsible for presenting funding applications to GCF as well as overseeing, supervising, managing and monitoring the overall GCF-approved projects and programmes.
Accredited Entities need not act as the direct implementer of funding proposals. Executing Entities can also implement projects on behalf of Accredited Entities by channelling funds and carrying out the funded activities. Accredited Entities however have an important role to play in the supervision of Executive Entities’ GCF-related activities.
Approval of GCF projects is contingent on whether a proposed project supports the country's strategic priorities. Every project the GCF Board agrees to fund must be endorsed, expressed via a no objection letter by the country's NDA or focal point.
In order to address the capacity constraints faced by developing countries in developing robust project proposals, GCF has established the Project Preparation Facility to provide financial support to help Accredited Entities prepare projects and programmes. The facility is specifically targeted to support Direct Access Entities, and micro-to-small size category projects.
Generation of Funding Proposals
Funding proposals are developed by Accredited Entities, in close consultation with the NDA or focal point of a country. Project proposals are based on differing climate finance needs and strategic priorities of a country.
Accredited Entities can also respond to Requests for Proposals issued by GCF from time to time. In some case, GCF may accept proposals from entities that have not yet been accredited. However, non-accredited entities are required to partner up with Accredited Entities when formally submitting funding proposals to GCF. Accreditation applications by entities that submit proposals through the Requests for Proposals are often prioritized by GCF.
Requests for Proposals
Several supporting programmes have been established by the GCF Board to issue Requests for Proposals.
- Micro- Small-, and Medium-Sized Enterprises Pilot Programme: The micro, small, and medium-sized enterprises pilot programme was established in 2016 as part of GCF's Private Sector Facility. The programme aims to support micro, small, and medium-sized enterprises with mitigation and adaptation activities.
- Enhancing Direct Access: An initial allocation of USD 200 million has been approved by thge GCD for 10 pilots funding proposal adopting Enhance Direct Access implementation modalities.
- Mobilising Funding at Scale Pilot Programme: Mobilising Funding at Scale Pilot Programme has been developed to identify innovative, high-impact projects and programmes that mobilize private sector investment in climate change activity. The GCF Board has allocated up to USD 500 million for the programme.
Simplified Approval Process
Concept notes for some small-scale projects may also be submitted for consideration under the Simplified Approval Process (SAP). Under the SAP, the documentation and review processes for bringing projects or programmes from conception to implementation are reduced and simplified. Accredited Entities, National Designated Authorities (NDAs) or Focal Points and their partners may choose to submit concept notes under the SAP if the project or programme meet three main eligibility criteria:
- Ready for scaling up and having the potential for transformation, promoting a paradigm shift to low-emission and climate-resilient development
- A request for financing to the GCF of up to USD 10 million of the total project budget
- The environmental and social risks and impacts are classified as minimal to none