World’s Largest Climate Fund Invests $1.2 Billion to Protect Vulnerable Countries

The Green Climate Fund (GCF) has authorized more than USD 120 million in new funding to improve climate resilience in Mauritania, Ghana, and the Maldives.

The world’s largest multinational climate fund aims to accelerate dealmaking and make the largest-ever series of investments to help developing countries in adapting to global warming.

At a meeting, the Green Climate Fund planned to distribute $1.2 billion for 17 projects, mostly in Asia and Africa, after getting approval from shareholders, including the United States. It comes amid an intense political environment that has seen development aid slashed.   

The Green Climate Fund, a crucial element of the historic Paris Agreement, is the largest in the world. Its objective is to help underdeveloped countries achieve their Nationally Determined Contributions goals and move towards low-emission, climate-resilient pathways.

The Green Climate Fund (GCF) has authorized more than USD 120 million in new funding to improve climate resilience in Mauritania, Ghana, and the Maldives.

At the request of the three countries, the United Nations Environment Programme (UNEP) established these projects to help vulnerable communities prepare for the severe effects of climate change through nature-based solutions, climate-resilient agriculture, early warning systems, and enhancing water security.

Henry Gonzalez, Chief Investment Officer of the Green Climate Fund (GCF), stated that the approval of the projects indicates GCF supports countries with national climate action priorities, particularly Ghana, the Maldives, and Mauritania.

These three countries will significantly benefit from these investments, especially in crucial areas of climate resilience.

Northern Ghana faces unpredictable rainfall and prolonged dry seasons, which lead to chronic food shortages, drying of water bodies, and degradation of flood-related infrastructure. The most affected are the small farmers who depend on rain for farming. Extreme rains will increase the collapse of dams and downstream floods, while high temperatures reduce the land’s water retention capability.

On the other hand, the Maldives is one of the most vulnerable countries to climate change. They face constantly rising sea levels. They have 1192 islands, out of which 80% are less than one metre above sea level. Rising waters are not the only dangers for them; climate change is also causing severe storms, floods, heatwaves, coastal erosion, and other natural disasters, which are frequent and severe.

Climate change affects every Maldivian, and its risks are threatening crucial economic sectors, including tourism, fishing, and agriculture. Women, children, the poorest, most isolated, everyone is vulnerable to climate change.

The Organisation for Economic Co-operation and Development (OECD) analysis released in June claimed that President Donald Trump’s significant cuts to US aid could cause development assistance to decrease 17% this year after it dropped to 9% in 2024.

The United States is the largest contributor to humanitarian aid. It distributed $61 billion in foreign aid last year, with over half of it via the United States Agency for International Development (USAID).

The US paid half a billion dollars to help South Africa with healthcare. Now, they have withdrawn most of the funds, although the exact amount remains unknown.

President Donald Trump described his administration’s financial cuts to the US Agency for International Development and its global aid initiatives as “devastating.”

The GCF invests $227 million for a project aimed at expanding green bond markets in 10 countries. Green bond markets are where companies raise money for environmental projects that limit climate change.

In East Asia, it will invest $150 million in the food system to help 18 million people, while in South Asia, it will invest $200 million in the India Green Finance Facility to scale renewable energy projects.

All the projects will bring the GCF investment portfolio to $18 billion in 133 countries. The countries have contributed $21 billion and committed $29.9 billion to the GCF.

In addition to investing funds, the GCF board approved measures to accelerate its work with the partner organisation, including accredited entities such as other multilateral lenders in developing nations.