Green Finance and ‘The Future of Funds’ An empirical analysis of the Green Climate Fund portfolio structure

While multilateral climate negotiations are at a deadlock, climate finance faces a crossroads as the lending community needs to develop renewed strategies on the ‘Fu-ture of Environment Funds’. Most policy and scholarly attention have been directed on how to improve the largest multilateral climate fund – the Green Climate Fund (GCF) – own funding, compared to surprisingly few studies on the allocation strategies of the GCF funding. A conventional view so far has been of a Fund devoted mostly to finance non-bankable projects with public funding. Yet, improving the ability of the GCF to channelize both public and private sources of finance, and to contribute to de-risking more traditional sources of finance, would scale up climate finance and at the same time also improve the GCF own attractiveness for contributors. In this paper we em-pirically analyse the GCF portfolio structure and strategy and suggest the GCF can skillfully fund non-bankable parts of larger “nearly bankable projects”. This supports a view of the GCF that departs from the conventional one.