United Nations Green Climate Fund Executive Director Hela Cheikhrouhou 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 stopping donor nations paying into the fund after it completed rules on how it will collect and disburse them, Cheikhrouhou said yesterday in a phone interview from Songdo, South Korea, where the organization is based. Those guidelines were completed 3 1/2 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’s capitalization is crucial to build trust in international talks on a new agreement to fight climate change by the end of next year at a meeting in Paris. Developing nations want industrialized countries to show how they intend to reach the $100 billion a year they pledged to deliver by 2020.
“If this thing is not capitalized before the end of the year, Paris is going to be under a lot of pressure,” Seyni Nafo, a Malian envoy at UN climate talks that began today in Bonn, said in an interview.
So far, the fund has taken about $55 million in donations for startup and operational costs, according to its website.
“The Green Climate Fund remains an empty shell,” Meena Rahman, who tracks UN climate talks for Malaysian nonprofit group Third World Network, told reporters in Bonn.
Some promises may come during ministerial discussions, said European Commission envoy Juergen Lefevere.
“We know that there are a number of member states that stand ready to put significant amounts into the fund,” Lefevere said. He said it’s up to the European Union’s 28 member states to make their own announcements.
While the Green Climate Fund isn’t intended to channel the entire $100 billion, 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.
Cheikhrouhou said she’s planning to send letters in the next few days to all UN member states as well as philanthropists and some companies, inviting them to a donors’ meeting on July 1 and 2 at a location yet to be decided. She’s not attending the talks in Bonn because envoys “know pretty much where we stand as a planet today,” she said.