GCF tries to raise $15 billion in 2014Hela Cheikhrouhou, executive director of the United Nations Green Climate Fund, is seeking to raise as much as $15 billion by the end of the year so she can start financing projects in poor countries.
There are no hurdles to prevent donor nations from paying into the fund now it has completed rules on how it will collect and disburse money, Cheikhrouhou said Tuesday in a phone interview from Songdo, where the organization is based. Those operational guidelines were completed three and a half years after climate envoys from more than 190 nations agreed to set it up.
“It is realistic and totally feasible and expected that the exercise mobilizing initial resources of this fund should conclude by the end of this year,” Cheikhrouhou said. “If we raised somewhere between $10 billion and $15 billion, this amount could easily be deployed within three years.”
The fund isn’t intended to channel the entire $100 billion, though Cheikhrouhou said contributions should be “significant.” The fund has agreed to rules that mean half the money will go to “adaptation” projects that help developing countries cope with the impacts of climate change, and half into programs to reduce or limit their greenhouse gas emissions. Half of the adaptation money will go to the most vulnerable nations.
The fund’s biggest problem may be in finding sufficient projects of a suitable standard to finance, according to Yvo de Boer, who spearheaded global treaty discussions until 2010 as executive director of the UN Framework Convention on Climate Change. De Boer is now director general of the Global Green Growth Institute in Seoul.
“I don’t think we’re short on investment capital; I don’t think we’re short of technology; but we are short of enough good projects that meet the risk and reward criteria of investors,” de Boer said in a May 29 phone interview. “People are talking about an initial capitalization of $10 billion by Paris. I think it would be a massive stretch to spend that amount of money sensibly in the next three to five years.”
Cheikhrouhou said she’s not worried about finding sufficient projects, citing her experience at the African Development Bank, where demand for funds exceeded the available cash.
“I don’t think demand will be the issue — it is rather whether there will be enough resources that flow into the fund,” she said. “It is hard work to deploy the resources because you want to give them to the best programs and projects but it is definitely achievable.”