How Green Climate Fund is using ARAF funding to tackle climate change

What is Green Climate Fund’s (GCF) global strategy?

It aligns with the Fund’s “50by30” vision, which will enable the GCF to manage USD 50 billion by 2030, and empower it to catalyse climate action for developing countries. Its Readiness Programme will empower developing countries to translate their Nationally Determined Contributions (NDCs), National Adaptation Plans (NAPs) and Long-term Climate Strategies (LTS) into climate investments and programming. The Fund will mobilise the private sector to unlock the financial flows needed for climate action. Further, it will improve access to finance for the communities who need it most. To protect the most vulnerable, adaptation and resilience needs will be addressed immediately, by expanding climate information and providing early warning systems.

How does GCF support the ARAF fund?

In 2018, GCF provided a catalytic anchor investment of USD 23 million to ARAF I – a fund with a target size of USD 50 million - by de-risking investment through a first-loss capital. As the world’s first agriculture fund focused on climate adaptation, ARAF I attracted strong investor interest, closing oversubscribed by USD 8 million above its original target – demonstrating investor appetite for climate adaptation and agriculture-focused investment themes and the risk mitigation enabled by GCF’s participation. GCF provided USD 3 million in grant funding towards a USD 6 million technical assistance facility, to help investees build climate resilience. The grant has raised awareness, steer crop choices in line with climate forecast, and promote adaptation tools, techniques, and income stream diversification. To date, ARAF 1 has impacted 11 million beneficiaries, including 2.2 million smallholder farmers and 8.8 million lives - approximately half of whom live below the poverty line.

Annual performance reports detail the project’s overall implementation progress, including performance against GCF investment criteria, financial information, project logic framework targets, indicators, environmental and social safeguards (ESS), indigenous peoples, and gender project considerations. The reports also provide information on challenges encountered and mitigation actions taken. The ARAF has an impact at three levels: lives impacted, farmer well-being and, climate resilience. ARAF reports annually against core indicators in line with GCF’s results management framework. At the impact level, ARAF reports on the number of the Fund’s direct and indirect beneficiaries (disaggregated by gender). At the outcome level, GCF measures increases in: the generation and use of climate information in decision-making; additional adaptive capacity and reduced exposure to climate risks; awareness of climate threats and risk reduction processes; resilience and enhanced livelihoods of the most vulnerable people, communities and regions; resilience of health and well-being, and food and water security.