One of the key issues facing climate finance is the availability of private sector investment, and how to mobilise it. Barriers to private sector engagement are typically centred on political, institutional, knowledge and financial risks. These risks are high in countries that are the most vulnerable to climate change and in those where the private sector is not yet well established.
As a response, the GCF’s Private Sector Facility launched a Request for Proposals (RfP) entitled “Mobilising Funds at Scale.” The RfP offers a total of USD 500 million to private companies with “bold business solutions” to leverage climate capital and mobilise private sector funding.
How did stakeholders respond to the RfP? Drawing on a survey of GCF stakeholders, and selected interviews, the seventh edition of GCF insight examines perceptions of the Private Sector Facility and the RfP, examining views on the Facility, the factors influencing decisions to make an application, or not, and what stakeholders believe GCF are seeking to achieve from this call.
Overall, stakeholders demonstrated a favourable view of the RfP. Applicants felt that it provided “an opportunity to remove existing market barriers, uncertainties and risks hindering private investments in new climate actions in my [the applicant’s] country.” Several common reasons for applying emerged. These included the availability of secure, up-front funding, making a lasting impact, gaining accreditation, and expanding existing activities. The main reasons for not responding to the RfP included limited financial/human resources, cumbersome requirements, and the tight deadline set by GCF.
Find out by downloading our latest report here – GCF insight #7 – ‘The Private Sector Facility’.
About GCF insight
Our initial survey and report is an initiative of E Co., emerging from work we are doing to develop low-carbon, climate-resilient projects. E Co’s team of consultants designed and administered the survey which was used to inform and prepare this report. E Co. has conducted this research independently and is not affiliated with the GCF, the GCF Secretariat or donors. The views expressed in this report are those of the authors and do not represent those of the Green Climate Fund. Nothing in the interviews or any information or material relating thereto shall be construed as implying any official endorsement of or responsibility on the part of the Green Climate Fund.