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Info Service on Climate Change (Jul26/03) GCF launches third replenishment process after heated wrangles 10 July, Delhi (Radhika Chatterjee): The Board of the Green Climate Fund (GCF) launched arrangements for its third replenishment (GCF-3) at its forty-fourth meeting (B.45), after very heated wrangles between developed and developing country Board members. The meeting was held in Dushanbe, Tajikistan from June 29– July 2, 2026. The Board decided that the period of GCF-3 would be from 1st Jan. 2028 to 31st Dec. 2031. The decision was adopted after heated exchanges between the developed and developing country Board members, mainly over calls by the former to expand the contributors to the GCF, citing constraints in the budgets of developed countries due to the current “geopolitical and economic context”. Developing country Board members countered this and stressed the importance of adhering to the UNFCCC and the Paris Agreement (PA), as well as the GCF’s Governing Instrument (GI), emphasising the obligations of developed countries for providing climate finance to developing countries. Referring to the background document prepared by the GCF Secretariat on the replenishment process presented for the Board’s consideration, developing country members stressed that the decision on the arrangements should only be a procedural one, and substantive policy issues should not be incorporated into it. [The background document contained a policy for contributions for GCF-3 (in an annex) and consisted of substantive issues linked to expansion of the contributor base for the Fund “to support more dynamic resource mobilisation”, and also stated that the policy will “introduce flexibility to expand the range of contribution types, with contributor guarantees as a top priority”. The document stated that, “contributor guarantees are proposed as type of financial input into the Fund, under which contributors assume defined risks, with a view to enhancing the Fund’s overall risk-bearing capacity…” Further, on loans, the document called for “raising the aggregate debt ceiling”; “raising or exempting the individual loan cap requirement”; and “lowering the loan cushion requirement”.] Some of the developing country Board Members expressed that it appeared as if the cornerstone principle of common but differentiated responsibilities (CBDR) was being renegotiated through the replenishment process, which they could not support. They also referred to the description of the context (current geopolitics and economics) of the GCF-3 replenishment as being deeply concerning, adding that the previous replenishment had commenced amidst difficult circumstances of countries emerging from the COVID pandemic as well as the Ukraine war and yet the replenishment process had not been framed in that context. (According to the Board document, “The context for GCF-3 replenishment is markedly more constrained and volatile than for previous cycles. While the need for climate finance is increasing, fiscal and political space in major contributor countries is tightening due to geopolitical tensions and conflicts, high debt levels, fiscal consolidation, and competing domestic priorities, with limited prospects for growth in ODA [official development assistance].”) (It is important to note here that the United Kingdom [UK] communicated to the GCF earlier this year that their GCF-2 pledge would decrease by 50% due to the UK government’s decision to reduce ODA expenditure, which is expected to have a material impact on the delivery of the current programming.) Developing country Board members also said that some of the issues in the document such as the policy on contributions, are scheduled for discussions at the forthcoming Board meeting, and including these in the replenishment arrangements discussions was not appropriate. They also said that they would not accept any references, direct or veiled, to the earmarking of resources. Developed country Board members on the other hand wanted the GCF’s policy on contributions to incorporate elements that would make the Fund “attractive and suitable” to the needs and requirements of various funding institutions, ranging from the private sector to philanthropic sources, sovereign funds, insurance and pension funds. (See below for further details.) Following exchanges on the first day, a small group comprised of developed and developing country Board members and their advisers, convened to solve the issues on the sidelines of the Board meeting. Following the resolution of issues in the small group, when the matter was brought to the Board, several developed country Board members expressed their unhappiness over the arrangements where the controversial annex had been dropped and several other changes were made which led to the adoption of a procedural decision on the arrangements for GCF-3. Annette Windmeisser (Germany) in her intervention asked how Small Island Developing States (SIDS) and Least Developed Countries (LDCs) could reject proposals and arrangements for “additional modalities and sources” which she said “will make your countries poorer,” due to less resources going to the GCF. Her intervention drew sharp responses from the developing country Board members. Danyal Hasnain (Pakistan) expressed disappointment over the “divide and rule” stance of Germany in questioning the position of LDCs and SIDS in not agreeing to “additional modalities and sources” of funds to the GCF. Antwi-Boasiako Amoah (from Ghana, speaking for the African Group) said the GCF funds are not going to make developing countries richer, and that the funds are supposed to support developing countries to address climate change challenges that were caused by developed countries. Amjad Abdulla (Maldives, speaking for the SIDS) said that agreeing to the decision was a “sovereign” one, while Isatou F. Camara (Gambia, speaking for the LDCs) said if partners really think LDCs are their priority, the Least Developed Countries Fund (LDCF) should not be facing a lack of resources. Following the deliberations, in the decision adopted, the Board affirmed that the replenishment process will be conducted in line with the principles and provisions of the UNFCCC and the PA, following a proposal by Mohammad Ayoub (Saudi Arabia). (See details below). On the controversial policies, the Board decided to conclude its consideration of the updated policy for contributions for the GCF-3 replenishment, and for the consideration of “the separate policy for contributions from other sources not covered in the updated policy for contributions for the third replenishment” by B.47 (the first board meeting in 2027). The Board also decided that the replenishment meetings would be open to “all potential contributors and to all Board members” and also requested the Secretariat to begin making arrangements to facilitate the process of collective engagement, including finding hosts for the in-person replenishment meetings, and requested the Trustee to “update standard provisions and template for contribution agreements” and other “relevant financial management issues”. The Board also requested the Co-Chairs, “in consultation with the Board and with the support of the Secretariat to identify and appoint, if needed, a suitable chairperson(s)/facilitator with climate finance experience for the third replenishment process”. The current Board Co-Chairs are Seyni Nafo (Mali) and Leif Holmberg (Sweden), who presided over the B.45 meeting. Among the other key agenda items that were considered at B.45 included matters relating to country ownership guidelines, policy on fees, updated gender action plan 2026 – 2031, status of GCF resources, funding and accreditation proposals. (The decision on the policy on fees was deferred as the Board could not conclude work on this matter.) The Board also adopted 10 funding proposals approving USD 369.1 million and 9 accreditation proposals. The Board approved for the first time a project in Syria to deliver water security support to communities facing acute climate driven water scarcity. (See details below.) We provide below highlights of the exchanges on the replenishment arrangements on the first day of B.45 (29 June) and the last day (2 July) prior to the adoption of the decision. Highlights of exchanges on 29 June – first day of meeting Stéphane Cieniewski (France) said a financial institution whose two-thirds of the resources came from just five countries was not an appealing value proposition to France. “The broader the contributor base, the more appealing the GCF will be for most donors and at least for us… It's about being able to justify to our taxpayers why we keep committing to the GCF,” he said, adding that the most important matter before the Board is to adopt a policy for contribution that “thinks big” and is “broad”, with flexible terms of conditions that would appeal to a vast array of potential contributors, including both public and private should be an important part of the policy. He also suggested the need for developing a clear policy on the use of concessionality, clarifying the Fund’s comparative advantage related to multilateral development banks (MDBs) and development finance institutions (DFIs). Kobi Bentley (United Kingdom) supported the overall framing of the document, including the recognition of the context. She said a successful replenishment would be one that focuses on “impact, additionality and catalytic effect, as well as volume, and one that articulates the clear comparative advantage of the GCF within the climate finance architecture.” She also said the replenishment should seek “to strengthen complementarity and coherence with other funds and MDBs to maximize system-wide impact and reduce fragmentation. She supported the focus on mobilising increased resources and broadening and diversifying the Fund’s financing base, including exploring other sources of finance to scale climate impact. She also underscored the need for demonstrating progress “on strengthening results reporting and transparency.” Annette Windmeisser (Germany) said that “Blaming the handful of remaining traditional donors will be a very difficult message to bring back to our Parliaments when they make decisions.” She said Germany is looking for a new approach at the GCF “that is centred on prioritising leverage.” She also said that broadening the funding base and deepening the GCF’s catalytic role would be key to deliver the scale of finance, NCQG demands, and adaptation needs, including grant-based financing to the most vulnerable. She said private sector mobilisation is a central pillar of the next strategic period. She also supported developing innovative inputs like contributor guarantees, debt for climate swaps, and enabling carbon market mechanisms. She said there is “real merit” in better integration of public funds with private and institutional capital exploring access to capital markets with a sound risk framework. She also welcomed the readiness to revisit prudential parameters, including the aggregate debt ceiling, individual loan caps, and so on. Satoshi Ikoma (Japan) said that given the tight fiscal conditions that traditional contributors are facing in the current geopolitical context, “securing contributions from non-traditional contributors, including non-government, the private sector, and philanthropic organizations will be critical to achieving an adequate overall contribution level.” He said it is essential that the policy on contributions from other sources of funds should “be responsive to and compatible with the requests and constraints of such contributors”. Andrew Hurst (Canada) said there is a need to advance reforms. Acknowledging concerns around non-grant instruments, particularly for adaptation for highly vulnerable countries, he said Board members still cannot ignore the important role that the private sector can play in the UNFCCC if countries want to keep 1.5 Celsius temperature goal within reach. Adding further, he said the private sector’s ability to provide non-grant finance is a critical part of the puzzle in driving investment in technology that are delivering emission reductions. The goal is not just volume but also impact, he added. Antwi-Boasiako Amoah (Ghana for the African Group) said the arrangements for GCF-3 should have a “funding scenario document informed by, or alongside, the Updated Strategic Plan (USP), to provide scenarios for the implementation of the USP, in the context of the expressed priorities and needs of developing countries, the new collective quantified goal (NCQG), tripling of outflows expectation, and the tripling of adaptation finance by 2035, and in line with the programming capacity of the Fund.” Amoah said the group did not support the proposal to include the policy for alternative sources as part of the package of documents for the replenishment, saying they could not grant blanket approval for targeted engagement with different sources. The Board has not decided on how to approach sources of finance listed in the document, such as capital market, carbon markets, he said further. On the draft policy for contributions, Amoah said references to contribution guarantees should be removed from the draft document since these have not been approved by the Board. He also said that any form of earmarking must be avoided. Isatou F. Camara (Gambia for LDCs) emphasised that a broader range of contribution instruments cannot come at the cost of concessionality, for the integrity of the Fund rests on concessionality. “For LDCs facing shrinking fiscal space, debt-service burdens that consume a growing share of revenue, and prohibitively high cost of capital, protecting the concessionality floor is inseparable from any conversation about expanding the contribution options. Expand the menu if we must, but let’s have safeguards in place for adaptation and LDCs,” said Camara, adding that “the funding scenarios should be fully aligned with the decisions adopted by the COP.” Amjad Abdulla (Maldives for Small Island Developing States) said “the replenishment process should remain firmly anchored in the GI, the Convention and the PA,” and the importance of distinguishing “between broadening sources of support for the Fund and redefining the obligations that underpin the international climate finance architecture.” He suggested that any additional resources from a wider range of contributors and financing sources should complement, and not replace, the primary responsibility of developed countries to provide financial resources under the Convention and the PA. Abdulla reminded the Board that the ultimate purpose of replenishment is to ensure that the GCF has the resources necessary to deliver on its mandate. “We should therefore continue to focus on programming ambition, implementation, country ownership and accessibility alongside resource mobilisation. The success of the Fund will ultimately be measured on many things, including by how effectively and efficiently those resources reach developing countries,” he said. Mohammad Ayoub (Saudi Arabia) said the document by the Secretariat “departs fundamentally from the Convention and the PA” and the GCF’s Governing Instrument with regard to how differentiation between developed and developing countries is referenced. He said the document also departs from the previous arrangements agreed for the second replenishment process. Adding further, he said the principle of CBDR was not being renegotiated; rather that the Board members were launching the replenishment process. He said he did not view the policy on contributions as a relevant component to these arrangements as this would pre-empt the discussion that the Board is expected to undertake at its next meeting. He also called the reference “to taking into account the priorities of alternative sources of funding” as very problematic as “that’s earmarking just phrased in a different way”. Referring to the issue of “context”, he said “the context that's being placed here is deeply concerning. The last arrangements were launched in July 2022. At that time, the world was also experiencing a geopolitical event (the Ukraine war) that started four months before then. We were also recovering from a global pandemic, but we never phrased or framed the replenishments in that context… If we're going to talk about context, let's put the fact that the GCF is an operating entity of the Financial Mechanism; that according to Article 4.3 of the Convention, developed countries are obligated to provide the full and incremental cost of climate action implementation in developing countries; that developed countries have to institute burden sharing arrangements. We could put Article 9.1 of the PA to the fact that there's a shall requirement on developed countries to provide funding”. These aspects are much more pertinent and relevant in terms of context, he added. He stressed that the most affected in the current geopolitical and economic context are developing countries. And yet “they are being left to suffer these consequences on their own with decreasing ODA,” added Ayoub further. Danyal Hasnain (Pakistan) said that the GCF-2 arrangements should be used as the baseline for GCF-3 and underscored the importance of enduring primacy of public finance/sovereign funding in light of developed countries’ international obligations. Any proposed solutions cannot substitute nor be a way out for not upholding their legal obligations and political commitments, he said. He also said that private finance and ‘concessional loans’ should not increase developing countries’ debt stress and pointed the need to uphold the inter-governmental nature of decision-making and insulating governance structures from non-sovereign contributors’ ability to sway decisions. Hasnain also called “for preserving ‘unearmarked’ modality of financial contributions with no governance rights vested in non-sovereign contributors to avoid any conflict-of-interests.” Min Tian (China) added her support and said since the two policy documents for the GCF-3 replenishment are still under discussion, and these should not be included in the document on arrangements for GCF-3. Hamid Abakar Souleymane (Chad) said the document has some difficult issues with the broadening of the contributor base, which is a red line that should be avoided. He emphasised the importance of not altering the grant-based nature, predictability, and concessionality of finance that are crucial to the GCF. He also said both quality and quantity matter when it comes to contributions. Tara Daniel (Active observer) in the statement on behalf of civil society organisations urged the Board not to adopt the arrangements for the GCF-3 replenishment “as is currently presented”. She said the document “contributes to diluting the responsibility of developed countries to provide climate finance, and places further burden of financing climate action on developing countries. Listing new alternative sources - including capital markets and carbon markets- is inappropriate. Carbon markets are also not climate finance,” stressed Daniel further. Highlights of exchanges on July 2 – final day of meeting Anne Moulin (Switzerland) said the revised version of the decision text “lacks strategic positioning, resource mobilisation, and outreach,” and does not reflect the reality of 2026 and pointed out that there is a huge competition for funds in Switzerland, adding further that they have to justify why the government should fund the GCF. “I will have to prove that GCF is delivering impacts and results. I will have to show that we have an efficient Board and that we have financial stability,” Moulin added. She said this strategic orientation is lacking in the text and called it “weak” and expressed her disappointment with it. Kazuho Taguchi (Japan) said the replenishment process serves as an opportunity for the Fund to present strategic direction and reach out to a broad range of actors, and that the global context has changed significantly since the previous replenishment with there being increasing pressure on many countries’ budgets. He emphasised the need for an attractive strategy and narrative for pursuing diversified sources of finance and stronger mobilisation of private sector. Annette Windmeisser (Germany) said the original version of the text acknowledged a number of issues that the world has fundamentally changed since B.33 [The 33rd meeting of GCF’s Board at which the GCF-2 replenishment process was launched]. She said rejecting this reality would be the “worst message” that can be sent to any capital, and that the original version of the document addressed those realities by its focus on the need to mobilise funding and expanding financial sources in the broadest possible terms. She said it built upon current eligible sources focusing on contributions from Parties and non-Parties of the UNFCCC. The expansion to contributor guarantees gives an additional leverage to funds being contributed, she said and that raising and exempting individual loan caps is a possibility that could have been explored to bring in more funding. “This seems something that particularly developing countries should demand. It gives LDCs and SIDS better access to scarce grants… I do find it difficult to understand how representatives of LDCs and SIDS can be content with going back to GCF-2…Rejecting additional modalities and sources will make your countries poorer,” she said. Stéphane Cieniewski (France) outlined the concessions he had to make to arrive at the compromise text. He said he had to give up expanded sources, diversified fund sources, broadening of contributor base, mentioning innovative and alternative sources, carbon credit, international levies and so on. Not mentioning the international context makes any kind of resource mobilisation more challenging, he added. Andrew Hurst (Canada) expressed his commitment to the Convention and the PA and said “that’s why we are sitting around this table.” Those who are no longer committed are not at the table anymore (in an apparent reference to the United States), he added and emphasised the need for focusing on practical and operational matters while launching the next replenishment process. Richard Bontjer (Australia) said in the context of being the co-presidency of COP31 (together with Turkiye), his country entrusts the Board to strengthen the GCF as “a shining beacon” that can effectively deliver on the financial mechanism of the PA, adding further that “the GCF needs to show its best side to the world and demonstrate (that it is an) effective and efficient provider of climate finance aligned with the goals of the PA. This is the only way we can make the GCF as a success.” Antwi-Boasiako Amoah (Ghana) said, “B.45 has seen a lot of intimidation on the table” and asked if developed countries think they can decide on behalf of the whole world and expect developing country Board members to remain quiet while they do so? “GCF funds are not going to make developing country Parties richer. GCF’s funds are supposed to support developing country Parties and address climate change challenges that were caused by developed countries. There's no way that these monies that we are getting are to make my country richer.” He said ministers of both developed and developing countries agreed to the NCQG, tripling adaptation finance at COP and asked “why are we afraid to accept decisions that the COP has made for us to implement as a Board? …Climate finance is not an issue of being getting rich or poor. It’s an issue of addressing critical needs that are being caused by climate change. And we need to get it right,” he said further. Amjad Abdulla (Maldives) said from the SIDS perspective, the focus is on making a simple procedural decision. “We want to let you know that we don’t sit here at the table as a beauty contest. We sit because the science has told us that SIDS are on the front line…of the adverse impact of climate change.” In response to developed countries, he said the arrangements for the replenishment, the process itself, and the USP3 are interlinked but that the decision (at B.45) is also a “sovereign decision”. Isatou F. Camara (Gambia) said funding received through the GCF is not “charity” and is a matter of fairness and justice because the countries and communities least responsible for the crisis are the ones paying the highest price for it. “We will show you impact (in relation to the results of the funds used for projects), but in turn we expect promises made to the most vulnerable to be kept, stressed Camara further adding that “unfortunately, that is not happening. The LDCF continues to lack resources and if partners really think LDCs are their priority, that fund should not be facing a lack of resources. Danyal Hasnain (Pakistan) in a strong retort expressed disappointment about the “superiority complex which was shown so blatantly by some members”; and about the “threatening tone which was used against us by certain members”. “My disappointment is to see the same policy of divide and rule that my region and my people have been forced to live with for decades and centuries. Some LDCs and some SIDS were told that you will be poorer (because they do not agree to expansion of the donor base). You will never become rich because some dollars from the GCF will come. These LDCs and these SIDS were way richer before certain countries came and robbed them of their wealth” and they “don't need your alms and your donations… GCF cannot make these countries richer; but it can also not wash off the historical responsibility and the climate debt that these countries have incurred over the years,” said Hasnain. Nino Tandilashvili (Georgia) said alternative sources is already mentioned in the GI of the GCF, and that it can be discussed as a separate policy, but members should not prejudge that decision in the launching of the replenishment process at B.45. Adding further, she said the efficiency of GCF is about “project preparation, successful project approval and successful project implementation because at the end, there are beneficiaries in developing countries that are waiting for the decisions of the Board so that this fund can deliver on the ground.” Reflecting on the process of the document preparation, Ayoub (Saudi Arabia) said the original document for the GCF-3 replenishment arrangements was prepared by the Secretariat, but it was significantly edited by a Co-chair (in an apparent reference to the developed country Co-chair), who even added a full annex…”. Adding further, he said “If this were to be a Co-chair proposal, then it should be reflected as such. …This was the Secretariat’s work that was heavily edited by a Co-chair.” He further said, “the GCF is not an MDB. The GCF is a climate justice fund. The GCF is about correcting historical wrongs.” It is about “fulfilling obligations and commitments set out in international agreements. Tell me what could change in four years that could justify walking away from international agreements,” he said further, and asked if everyone is still committed to the Convention and the PA or whether the past four years have changed that? He said the document on the GCF-3 arrangements “is not a strategic document,” but rather “a procedural one which was politicised.” Sandra Louiszoon (Netherlands) countered Ayoub’s assertion about Co-chairs tinkering “with the documents before it came to the Board,” adding that this was not the case. At the end of the discussions on the matter, Ayoub expressed happiness at hearing all Board members share their commitment to the Convention and the PA and proposed insertion of text in the decision to reflect that, and the final language in para 1 of the decision text which was adopted: “Affirms that the replenishment process will be conducted in line with the principles and provisions of the UNFCCC and the PA.” Funding proposals approved Ten funding proposals that were approved amounting to USD 369.1 million were:
The following nine entities were approved for accreditation during the B.45 meeting:
The next Board meeting will be held in Songdo, Korea from 26-29th October, 2026.
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