TWN Info Service on Climate Change (Jul26/07)
27 July 2026
Third World Network

CALLS FOR IMPROVEMENTS IN QUANTITY AND QUALITY OF ADAPTATION FINANCE

Kuala Lumpur, 27 July (Eqram Mustaqeem) – At the UNFCCC’s Adaptation Committee (AC) 2026 thematic dialogue on “Opportunities for accessing adaptation finance from the operating entities of the Financial Mechanism and the Adaptation Fund” held virtually on the 14th of July, representatives from the Multilateral Climate Funds (MCFs), namely the Green Climate Fund (GCF), the Global Environment Facility (GEF) and the Adaptation Fund (AF), shared initiatives undertaken to improve the quantity, quality and access of finance to developing countries.

Developing country representatives at the dialogue stressed the critical need for adaptation finance to be tripled overall, including in the outflows from the MCFs, and for them to be mainly in the form of grants. They also called for simplifying access to such funds for developing countries. [See interventions below from Parties].

The dialogue session began with an introduction by Mariana Ronchini (Italy), Co-chair of the AC on its work. She said that the AC was established in 2010 as an overall advisory body to the COP on adaptation and it also serves the Paris Agreement (PA). [The other Co-chair of the AC is Abdulaziz Albutti (Saudi Arabia).]

Ronchini explained further that the objective of the dialogue was to unpack opportunities for developing countries to access adaptation finance from the MCFs. It also provided an opportunity to learn from the funds on how adaptation programming and access modalities will be enhanced and how they are advancing joint efforts in this context, and to better understand what enables countries to access available adaptation finance effectively.

Panel with the Multilateral Climate Funds

Hansol Park, the GCF’s Climate Policy Specialist, stated that there's an explicit commitment to maintaining balance between support for mitigation and adaptation in the GCF, with a minimum 50% of adaptation finance provided to Least Developed Countries [LDCs], Small Island Developing States [SIDS] and Africa.

Park explained that the GCF has forged partnerships with 177 accredited entities and linked national priorities such as National Adaptation Plans [NAPs] to a pipeline of projects by drawing on the full range of financial instruments to structure projects with public and private sources. He said further that the GCF is agnostic in terms of financial instruments in a manner that they are able to deploy a full range of financial instruments, be it equity, debt, guarantee, result-based payments and grants. Deciding on which financial instruments would best suit adaptation needs and priorities is driven by countries, he added further.

He explained that currently, 60% of the GCF portfolio goes to adaptation, out of that, 65% goes to the LDCs, SIDs and African states. He underscored that approximately 80% of GCF public sector adaptation project funding is grant-based. Adding further, he said the board's recent decision to accommodate efficiency reforms, have unlocked an additional USD4 billion of programming finance to support the developing countries within the current programming cycle.

Rawleston Moore, the GEF’s Senior Climate Change Specialist, said that the GEF supports climate action in recipient countries through a family of funds. On adaptation in particular, it is the Least Developed Country Fund (LDCF) and Special Climate Change Fund (SCCF) support adaptation and resilience building in LDCs and SIDS, adding that the SCCF also supports innovation and private sector engagement as well.

Moore said that the GEF is at a key juncture because the 8^th replenishment [GEF8] period has just ended, and GEF9 started on 1st July for a period of 4 years. During the GEF8 period, the LDCF and SCCF supported 44 LDCs and 28 SIDS amounting to USD850 million. He also emphasised that the GEF has done a lot of work on implementation support, including through translating national adaptation projects and priorities into concrete investments.    The Fund has been closely coordinating and has a long-term vision with the GCF to support NAP implementation for developing countries that have established NAPs   through the GCF readiness programme.

Alyssa Gomes, the AF’s Climate Change Specialist stated that the fund was set up under the Kyoto Protocol (KP) and has been serving the PA since 2019.  The AF she said, has a very specific role, providing grant-based finance and supporting concrete adaptation projects and it works through accredited implementing entities. At the moment it has 63 accredited entities, 39 of which are national accredited entities. Around 50% of the fund's portfolio goes to LDCs and SIDS, she added further.

Explaining further, she said the AF's financing windows are structured around three main pillars: action, innovation, and learning. These pillars not only include funding opportunities, but they are also key themes in the way the fund works throughout its operations. There is readiness support that is provided to institutions to get accredited with the AF. She added that the AF and the GCF have this complementarity where fast-track accreditation is possible.  There are a range of different grants available to support institutional capacity building and project design, she said.

Gomes explained that the AF fund has a lifetime country cap allocation of USD40 million per country, where the countries decide how they utilise that cap.  Besides this country cap, there are a number of funding windows outside of the country cap, and these include funding for innovation or for locally-led adaptation. These can be single country projects or regional projects, but they each have their own criteria. The one thing that's common to all the funding windows is the adaptation justification and ensuring that the projects are aligned with national strategies and policies. If NAPs, Nationally Determined Contributions [NDCs] etc, exist in the country, the projects should be aligned, she added.

Elaborating further, Gomes said that from the AF's perspective, the starting point is the adaptation need and the developing country context rather than financing instruments because they only provide grants to countries. Grants, to them, play a very catalytic role.

Grants can help with institutional readiness, they can test new approaches, innovations, and demonstrate a proof of concept that could be scaled up through other resources or even   within the AF.  There is a possibility to potentially scale-up projects with other sister funds, and vice versa, added Gomes.

Pattabiraman Subramanian, the GCF’s Readiness Program Manager provided a status update on GCF readiness support, saying that the GCF has around 144 adaptation proposals approved in 121 countries, with the fund having supported nearly 83% of all the NAPs submitted to the UNFCCC. The fund is working with countries to ensure they use these resources to finalise the NAP formulation and make the best use of the formulated NAPs to go ahead with implementation.   A good example is Yemen where the GCF supported integrated conflict-sensitive and gender-responsive approaches in adaptation planning.

He said further that in terms of the current readiness programme, the integrated multi-annual integrated programme announced as part of the readiness strategy from 2020-2027 offers countries USD4 million for multi-year integrated programming that integrates both adaptation and mitigation efforts in countries. At the moment 8 proposals have been approved, 23 proposals are under review, and with 93 developing countries having expressed interest, the allocation might be fully exhausted in the first quarter of 2027.

Subramanian said that there is also the new allocation of up to USD1 million fund to direct access accredited entities [DAEs], and currently 12 DAEs have already accessed support with more than 90% of the proposals being focused on adaptation-related work.

On the connection from NAP formulation to implementation, he said further that the GCF readiness offers an additional USD3 million to support countries transition formulated NAPs to implementation.  Emphasis was made on the Project Preparation Facility (PPF) as a tool which connects adaptation planning in developing countries to funding proposals focused on adaptation.

On the issue of the MCFs being invited to support developing countries in implementing the UAE framework on the Global Goal on Adaptation [GGA] and that the annual outflows of funds are expected to rise by 2030 in line with the decision on the new collective quantified goal on finance [NCQG], the AF representative said that directions set out in the Framework are already strongly reflected in the Fund's current strategy and programming. It would be more of an evolution and deepening of the work already underway at the AF.

The AF representative added that the fund is well positioned to contribute to the broader international call to scale up adaptation finance, saying further that the demand for the AF is at an all-time high with an active pipeline of USD1.9 billion. The current architecture that the fund already has provides considerable flexibility to support countries in implementing the UAE framework.

The GEF on the same note did not expect any drastic changes and will continue their close work with recipient countries so that the projects funded are aligned with the UAE Framework and national priorities. The GEF representative remarked that the fund is now at the beginning of a new cycle in GEF9, which includes a new strategy for the LDCF and SCCF and that this strategy is aligned to the UAE framework and the GGA. 

For the GCF, the representative said that there is ongoing discussion on their next programming strategy on the Updated Strategic Plan 3 (USP3), during which the board may determine and further articulate their role in supporting the implementation of the UAE framework. Further, discussions of the next readiness and PPF strategies for the future programming cycle covering 2028 and 2031 could serve as a good vehicle to already move the fund towards that but nevertheless significant work has progressed under existing policies and mandates and frameworks, said the representative further.

Interventions by Parties

Vositha Wijenayake speaking for the G77 and China, stressed that adaptation finance is key for developing countries therefore it is very important that barriers on access to finance are addressed. Replenishment of funds in a timely manner is the highest need to ensure adaptation action in developing countries can be undertaken, she said further. She also stressed the need for tripling of outflows from the MCFs, whilst emphasising the importance of working towards the tripling of the adaptation finance goal and that a successful outcome on the AF at COP31 is vital.

Raju Pandit Chhetri, from Nepal speaking for the LDC Group, questioned the operating entities and the Funds on whether they have been delivering the expected amount of adaptation finance for developing countries because the needs of developing countries and the delivery of finance by the funds do not match. On access to adaptation finance, he emphasised that it has to be looked at from the quantity and qualitative aspect and in achieving a balance between adaptation and mitigation, stressing further that for LDCs, adaptation needs are higher.

He called for adaptation funding to be met with grants and public finance, with the delivery of such finance and consequent implementation through a DAEs because these are institutions whose capacity would be enhanced and built. National DAEs understand the national content and local context better than international organizations and would further reduce transaction cost and capital cost, he said further.

The LDC representative lamented that the replenishment for GEF9 from GEF8 saw a near USD1.5 billion decrease to USD3.9 billion dollars, and with the replenishment process of the GCF and the Fund for Addressing Loss and Damage [FRLD] upcoming, this trend is of high concern for the group.

On the LDCF as a grant-based finance mechanism focused on adaptation, he stated that there are just no resources there, during the entire four years of GEF8, and only USD20 million was provided to the LDCF to support adaptation action in highly vulnerable countries.

Chhetri reminded that call for tripling of adaptation finance goal at COP 30, but questioned the plan to deliver and operationalise the goal along with adaptation finance elements from the NCQG, particularly on tripling outflows from the MCFs. He stressed that the first priority now should be to actually fill the Funds with simplifying access and speeding up delivery being the second.

Hashem Hamawi from Saudi Arabia speaking for the Arab Group stressed that adaptation needs in developing countries are rising but unfortunately finance is in decline with total official development assistance [ODA] in general experiencing an unprecedented decline. He said that the GEF9 replenishment was the lowest seen in 16 years, 27% lower than the previous replenishment. Hamawi also added that a developed country (in an apparent reference to the United Kingdom), recently cut its signed contribution agreement to the GCF by half, representing approximately USD1.1 billion in cuts with another developed country rescinding USD4 billion in pledges from the Fund (in an apparent reference to the United States). He also lamented that at the same time, the AF transition to exclusively serve the PA has been stalled over an issue relating to terminology, impacting the AF's ability to programme using the share of proceeds from the Article 6.4 mechanism of the PA (which relates to carbon markets).

Said the Arab Group representative further, this all comes after developed countries agreed to triple their contributions for adaptation finance through the operating entities of the Financial Mechanism which are dedicated to exclusively serve developing countries.  The provision and mobilization of financial support must be commensurate with the needs of developing countries, he added, and called for developed countries to step up their contributions in supporting developing countries to adapt to climate change.

Karima Oustadi [Italy] speaking for the European Union stated that access to finance is a priority of the COP 31 presidencies and the group looked forward to deepening this discussion and supported the idea of grants being an important leverage and financial instrument for adaptation but the targets being proposed are very ambitious.

In response to the comments, the GCF representative began by stating that there are several reforms that have been introduced because of the feedback that countries have been informing them about and that the GCF will undertake discussions on replenishments but one needs to be mindful of the challenging landscape that all parties are navigating.   As regards LDCs, the GCF representative said that more than USD6 billion of the entire GCF fund has been channelled to countries in the group, with more than USD200 million delivered through the readiness window. 

The GEF representative emphasised that grants and risk sharing is critical and this is what GEF resources are for - to provide resources to help with the risks and the sharing of the risk mainly through grants to help institutions reduce the risk in many types of adaptation projects which they may be undergoing. The representative informed that on the issue of resources, the total number of LDCF full-size projects left without funding is just under USD70 million, which means there is a shortfall of USD70 million in the fund.

From the AF representative, participants were informed that the fund is increasing efforts on tailored capacity building by hosting more writing workshops and there has been a direct correlation between these writing workshops, the submissions coming in and the amount of proposals getting cleared, and that there has been a steady increase of funding approvals but there is still an active pipeline of over USD 1.9 billion; hence there is need for more finance.

Interventions by others

On the question of “What capacities, systems or enabling conditions are most critical for countries to access and effectively deploy increased adaptation finance and the challenges that Parties face in this context”, Roxanne Valentine-Donegan, Programme Manager of the Development Bank of Jamaica (DBJ), speaking from the context of a DAE to the GCF, highlighted enabling conditions that made the most difference along with the challenges. Said Donegan, the the most critical enabler is to have an accredited national or regional entity with a functioning environmental and social management system with fiduciary standards already built in, and this will allow a country to originate and structure its own projects rather than depending entirely on international accredited entities to package and submit on their behalf.  Further, sustained political will and cross-ministerial coordination on the matter is extremely important, said the DBJ representative.

On the challenges, she said actual access remains genuinely difficult and requirements are unclear; that the process takes too long and the requirements are stringent relative to the scale of finance.  She recommended for the Funds to build in genuine hand-holding, with feedback being iterative and unlimited where needed, so that technical gaps can be closed. Adding further, she said the GCF process should recognize that one size does not fit all; differentiated pathways must be streamlined that would allow vulnerability to translate into access rather than becoming another barrier to it, and that approval processes cannot remain as lengthy and document intensive as they are.

The DBJ emphasised the need for a more programmatic multi-year funding modality since the UAE framework’s targets are cross-sectoral and have long horizons by design, and that the current adaptation finance structured by project does not match that reality.

Jaoquim Leite, Head of Climate Finance, of the NDC Partnership shared that since 2016, the partnership has received more than 7,000 requests for support from more than 100 countries with 46% of all these requests relating to climate finance. Hence, there is a real urgency for increasing access and accelerating the deployment of climate finance. The key enablers that the partnership found are focused at the national level on strong government ownership, clarity on mandate, clear coordination, alignment and to have the climate agenda clearly integrated into national development priorities.

On the harmonization of funds across several institutions, he said that there is need to see mutual recognition of accreditation standards at the MCFs and even with Multilateral Development Banks (MDBs). He also stressed the need for further simplification of access, having faster, less burdensome approval processes with more direct access modalities, at the national and subnational level.

Said Leite further, in the current landscape, grant funding and concessional finance is unfortunately shrinking so there is a need to design those in a way that can be catalytic for more finance. He also said that there is the challenge of mobilising concessional and grant-based finance, and the need for a very strong call for increasing that and to direct such finance for adaptation and to sectors where usually finance is not flowing naturally.

Conclusion

The AC Co-chair Abdulaziz Albutti (Saudi Arabia) captured the emerging messages in the closing of the session. He said first, the discussions highlighted the importance of the role of the climate funds in supporting developing countries adaptation efforts and to enhance opportunities available to strengthen access to adaptation finance.

Secondly, the session he said highlighted that greater adaptation efforts would require predictable and accessible finance as well as enhanced readiness to support and strengthen national institutions and delivery capacity to expedite implementation.

Thirdly, he said that simplified access and streamlined requirements across climate funds is essential. Finally, sustained dialogue between countries, funds and support providers will support increased resources to translate into greater resilience, he stressed further.

Another dialogue set to be organised later, the topic of which will be decided at the AC’s next meeting in September this year.