Ever since the Green Climate Fund (GCF) was set up by the United Nations Framework Convention on Climate Change (UNFCCC) in 2010, there have been talks on how the countries to benefit from it can access the fund and on which priority basis. No doubt, the fund was meant for developing and poor countries to help them mitigate climate-related vulnerabilities, but the method of disbursing the fund remained far from transparent. Over the years, it is apparent that things have not changed much, rather the disappointing picture emerging from the GCF's fund handling process has become a cause for serious concern for developing countries fraught with climate risks. For some time now, countries like Bangladesh are finding the GCF increasingly turning problematic on account of the shoestring of debt repayment attached. Shifting away from grant-based activities, the GCF is leaning towards profit-based loan activities. Furthermore, despite commitments from developed countries, the GCF has failed to raise sufficient funds from them.
The Transparency International Bangladesh (TIB) in a study report released this week has blamed the GCF's mechanism of disbursing money and its moving away from the purpose it was originally meant to serve. The report also states that the GCF programme lacks good governance standards, and suffers from bureaucratic complexities, discriminatory practices and arbitrary domination of influential international organisations. The TIB report found that despite the demand for $215 to $387 billion, the GCF provided the developing countries, including Bangladesh with only $5.9 billion for adaptation to climate change. Of the fund provided, 40.6 per cent is given as loan, and 41.6 per cent as grants.
GCF is regarded as the largest global source of climate funding for developing countries, aimed at mobilising the climate finance promised by developed nations. However, it has only been able to mobilise 2.0 to 3.0 per cent of the promised US $100 billion per year from developed countries. The study said, against the annual adaptation demands of US$215 to $387 billion by 2030 for vulnerable countries, the fund has only approved US$5.9 billion since 2015, indicating a gargantuan gap between expectations and GCF delivery. As for Bangladesh, the country needs $12 billion to address climate change by mid-2025, but so far, only $1.18 billion has been approved from national and international sources, representing 9.9 per cent of the required amount. The TIB report says GCF provides more funds to organisations like the UNDP, the IDB, the ADB and the EBRD, which is unacceptable and in contradiction to its core mandate. The GCF could not achieve 50:50 proportions for adaptation and mitigation, the TIB's findings say. The report also states that the Bangladesh government's selection of the National Designated Authority (NDA) for GCF appears arbitrary due to the absence of clear policies governing NDA appointments.
Clearly, GCF has strayed away from its objective, bypassing country priorities and staying indifferent to its targets for mitigation of climate-change vulnerabilities. Prioritising loans over grants goes against the agreement. It is crucial that while contributions from donors match their commitments, the core mandate of GCF is strictly adhered to.
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