Simon Wilson, the GCF's chief of staff, talked to Ahram Online about the importance of the recent 27th UN Climate Change Conference (COP27), cooperation with Egypt, obstacles and opportunities in climate finance, as well as the fund's plans for the future.
AO: How was COP27? What was its significance for GCF?
SW: GCF took part in 359 engagements at COP27, along with other informal meetings. As a main operating entity under the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC), GCF takes guidance from the Conference of Parties (COP) on its policies, programming priorities and eligibility criteria.
COP27 was an opportunity to listen, particularly, to the developing nations, and to hear how the fund can continue to meet their needs for transformative climate action, in addition to bringing together global leaders to discuss what is needed from the climate finance system to realise the climate goals of developing nations.
AO: What about your cooperation with Egypt?
SW: GCF and the Egyptian government announced that Egypt will be the first country to adopt a climate investment plan, a move which could significantly accelerate efforts by Egypt to combat climate change by unlocking new investment.
We have already a number of successful projects with Egypt on the mitigation and adaptation sides.
For the mitigation side, we have contributed in funding the Benban Solar Park, one of the largest solar parks in the world in the Aswan Governorate.
We support Egypt's renewable energy integration and leveraged investments to help the country meet its target of 20 percent renewable energy generation by the end of 2022.
This is done through two complementary components. The first is a comprehensive technical assistance program to enhance renewable energy integration, policies, and planning. The second component is to scale up investments to support the development and construction of renewable energy projects totaling $1 billion.
The projects to be implemented with co-financing from this framework are expected to generate around 1,400 gigawatts per hour (GWh) of electricity annually, and result in avoided greenhouse gas emissions of about 800,000 tons of carbon dioxide equivalent annually once all projects are operational.
On the adaptation side, we have contributed in funding an under implementation project on defending the Nile Delta against coastal flooding damage to improve the resilience of rural communities, surrounding villages and agricultural areas. The project will also lead to the development of an integrated coastal zone management plan for the entire North Coast of Egypt.
AO: What are the main obstacles in financing for developing countries?
SW: On the adaptation side, there is not enough money out there. Globally, climate finance is still directed to mitigation efforts at about 80 percent, and 20 percent for adaptation. In the Green Climate Fund, we split the funds 50/50 between adaptation and mitigation.
Currently, about 70 percent of our adaptation funding goes to the least developing countries, many of which are in Africa. We are targetting the most vulnerable countries that face the biggest challenges and need more support. However, there is still an adaptation gap that we are trying to address.
This requires increasing investment from the public sector, as it is more difficult to get private sector investment for adaptation projects, but the GCF is trying to tackle that overtime.
About 10 years ago, it was very difficult to get private sector investment in developing countries for mitigation projects in the renewable energy sector for example, but that has become easier increasingly as the cost of such projects has been going down overtime and the risk has become lower.
The next challenge is how to get more private sector investment into adaptation projects, especially in climate resilient infrastructure in sectors like eco-tourism and sustainable agriculture. It is challenging, but we are trying to find investment from the private sector in such adaptation projects.
AO: How does the COVID-19 pandemic and the war in Ukraine affecting the leverage of climate finance?
SW: The economic effects of the coronavirus pandemic and the current war in Ukraine have been a challenge for getting more funding for climate action projects, but there has been a positive response so far from many developed countries willing to commit and even put more money to fund mitigation and adaptation efforts in less developed states.
The war in Ukraine has made several countries realise there is urgency in transitioning to sustainable renewable energy solutions, in Europe and other parts of the world. Accelerating such a transition has become a necessity for many countries.
GCF is starting its second replenishment (GCF-2) which is crucial in operationalising the global collective goal of ambitious and accessible climate finance.
GCF’s first replenishment (2020-2023) was an important element of the financial commitments needed to deliver the UNFCCC and its Paris Agreement. GCF has become a vital part of the global climate finance architecture, mobilising $10 billion during its first replenishment and investing in transformational climate projects worth over $40 billion (including co-financing) in more than 100 countries including Egypt.
GCF-2 will further strengthen GCF’s ability urgently respond to the climate crisis and empower climate action in developing countries, specifically for the 2024 – 2027 period.
AO: What do you think about funding loss and damage?
SW: One of the strongest messages that we have heard throughout COP27 was about finding ways to fund loss and damage, leading to agreeing on the establishment of such a fund.
Around 30 percent of the Green Climate Fund resources already go towards helping to address issues related to loss and damage, particularly in averting climate damage through establishing early warning systems.
However, while addressing loss and damage, it is important to note that money dedicated to mitigation and adaptation efforts should not be decreased or directed towards other areas, so that needs for both do not increase in the future and create disruption. Instead, we need to find additional resources.
AO: With the current global food crisis, how important is funding food security efforts?
SW: Providing funds for food security efforts is very important, while taking into account the need for a just and fair transition in terms of taking into consideration the social consequences as countries go through their energy and sustainable transition efforts.
There were voices during COP27 about the need to have a fair transition towards the lower carbon food systems, and how to make such a transition. This should be taken into consideration.
That is why a just food transition has to be taken into consideration, and I hope that by COP28 next year there will be a funding program for food transition, as it is an area of interest for the GCF that already has many project on sustainable agriculture and food security.
Short link: