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UN green climate fund creating debt burden on BD: TIB

FE REPORT | May 15, 2024 00:00:00

The role of the Green Climate Fund (GCF) over the past decade has been disappointing as it has created debt repayment burdens on climate-affected countries like Bangladesh, said the Transparency International, Bangladesh (TIB).

Moving away from grant-based activities, the GCF is increasingly leaning towards profit-based loan activities. Furthermore, despite commitments from developed countries, the GCF has failed to raise sufficient funds from them.

The UN programme GCF lacks good governance standards, bureaucratic and systematic complexities, discriminatory practices and arbitrary domination of influential international organisations, said the anti-graft watchdog in a new study revealed on Tuesday.

The research found that despite the demand for $215 to $387 billion, the GCF provided only $5.9 billion for adaptation to the developing countries, including Bangladesh.

Of the provided fund, 40.6 per cent of the GCF's finance is given as loans, followed by 41.6 per cent as grants, the study findings say, adding that the "loan recipient countries, who are already burdened financially due to climate change, have been under additional pressure to repay the GCF loans."

The TIB disclosed the study findings at a press conference at its Dhaka office, marking the release of the research titled-"Accessing Green Climate Fund (GCF) for Vulnerable Countries like Bangladesh: Governance Challenges and Way Forward''.

The research timeline was between January 2023 and May 2024.

TIB Executive Director Iftekharuzzaman, who chaired the event, said that from the beginning the GCF has imposed such conditions that it nearly banned the developing countries from accessing funds.

"As a result, the countries, which were supposed to receive grants, didn't receive adequate amounts as expected. The GCF does not transfer them in due time," he added.

Also, the 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, he explains.

He also said that the UNDP's accreditation was renewed despite corruption allegations.

The GCF is also inclined towards mitigation rather than adaptation. The GCF could not achieve 50:50 proportions for adaptation and mitigation, the findings say.

Meanwhile, in Bangladesh, the government's selection of the National Designated Authority for GCF appears arbitrary due to the absence of clear policies governing NDA appointments.

Bangladesh requires $12 billion to address climate change by mid-2025, yet only $1.18 billion has been approved from national and international sources, representing 9.9 per cent of the required amount.

The study said $141.8 million (32 per cent) was allocated to adaptation projects and $256.5 million (58 per cent) to mitigation projects in Bangladesh. Additionally, $448.8 million has been allocated to the country from readiness and GCF funds, constituting 3.7 per cent of the total required funds.

Bangladesh received $256.4 million (76.9 per cent) for mitigation projects and $76.8 million (23.1 per cent) for adaptation projects, with 75 per cent of GCF funds for government organisations in loans and 25 per cent in grants.

Only 13.3 per cent of funds for Bangladesh's nine GCF projects have been disbursed, it adds.

The research was presented by Research Fellow Newazul Moula and Research Associate Md Shahidul Islam.

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