Climate finance innovation under the GCF

This research was part of the “Climate Finance Innovation under the GCF” project, implemented by the Frankfurt School-UNEP Collaborating Centre for Climate & Sustainable Energy Finance (FS-UNEP) and funded by the German Federal Foreign Office (Auswärtiges Amt). The activity contributed to the broader mandate of deepening the understanding of Article 2.1(c) of the Paris Agreement, which called for making financial flows consistent with low-emission and climate-resilient development pathways.

The study titled “The GCF Readiness Programme as a Support Mechanism to Implement Art. 2.1(c) of the Paris Agreement” examined how the Green Climate Fund (GCF) supports the operationalisation of Article 2.1(c) through its Readiness and Preparatory Support Programme (RPSP). Using the Whitley et al. (2018) framework on government tools to shift and mobilise finance: financial policies and regulation, fiscal policy, public finance, and information instruments. The research analysed 53 Readiness Proposals from 44 countries across all GCF regions (Africa, Asia-Pacific, Eastern Europe, Latin America and the Caribbean) between 2017 and 2024

Key findings reveal that information instruments dominate the GCF’s support activities, particularly in raising awareness and building institutional capacity to align national finance flows with the Paris Agreement. The study highlighted the need for a stronger focus on financial and fiscal levers in low-income countries, alongside enhanced results-management systems to monitor progress on the ground

The research underscored that the GCF’s Readiness Programme can adopt a staged approach to support countries according to their climate-finance maturity, enabling a gradual strengthening of institutional, regulatory, and financial systems for sustainable investment. Its outcomes aim to inform ongoing discussions under the UNFCCC and the GCF Board on aligning financial systems with the goals of the Paris Agreement.