Recommendation 4

HM Government Acknowledged

. Government response: Agree While the amount of available climate finance is increasing, current mechanisms for accessing climate finance are often slow, complex, resource intensive, uncertain, and project based. Insufficient coherence also leaves developing countries unable to access or utilise the support they need on climate action and sustainable development, offering a piecemeal response to partner countries’ needs. At the Climate and Development Ministerial, convened by the UK COP26 Presidency on 31 March 2021, participants recognised the urgent need to streamline access to climate finance, with greater individual and collective action required both before and following COP26. The Taskforce on Access to Climate Finance was created in response to these longstanding calls for reform from developing countries. Co-chaired by Fiji and the UK, the Taskforce aims to transform the way climate finance is accessed through the implementation of a new approach, to ensure countries and communities get the climate finance they need faster, in alignment with their own plans and priorities, and supported by coherent, programmatic finance from multilateral and bilateral partners. At COP26 the Taskforce published a set of Principles and Recommendations underpinning this approach: https://ukcop26.org/wp-content/uploads/2021/11/Principles-and- Recommendations-on-Access-to-Climate-Finance.pdf. These address a range of issues raised by LDCs and SIDS, including at the Climate and Development Ministerial, such as streamlining and simplifying accreditation, approval and reporting procedures, aligning support behind partner countries’ own national climate action priorities and strengthening the capacity of partner country institutions. Also announced at COP26 were five pioneer countries—Bangladesh, Fiji, Jamaica, Rwanda and Uganda—who will trial the new approach in cooperation with providers of climate finance. The UK has committed £100m to support implementation of the new approach set out in the Principles and Recommendations, and we encourage other providers and recipients to join us in applying this approach and learning from it. The UK also strongly supports measures to improve LDC and SIDS’ access to climate finance through the multilateral climate funds, including the Green Climate Fund (GCF). As noted in Lord Goldsmith’s letter to the Committee following his oral evidence session, the GCF developed its Simplified Approvals Process (SAP) to reduce the time and effort needed in the preparation, review, approval and disbursement procedures for certain projects, in particular small-scale activities. Following a pilot phase, in which 23 projects for a value of $208m have been approved through the SAP (74% in LDCs/SIDS/Africa), the UK has been championing the introduction by the GCF Board of an enhanced SAP for GCF. Options for measures to enhance the process which we are working on with recipient countries include: • Expanding SAP eligibility to higher risk projects and those seeking a higher volume of GCF finance (current ceiling is $10m), thereby increasing the funding available and number of projects eligible; • Accelerating the approval of SAP projects through the use of written procedure between Board meetings, thereby reducing the time required for approval; • Further time savings could be secured through expanding facilitation support and financing for SAP project preparation including through tailored capacity building, and by further simplifying the documentation/information required for SAP proposals, and streamlining and accelerating the review process. The UK has also been championing an Updated Accreditation Framework for the GCF. The GCF’s existing accreditation process is already graduated, according to an entity’s demonstrated capacity to undertake projects or programmes of different financial instruments and the highest category of environmental and social risk of its intended projects. We are not therefore proposing a simplification of the criteria for LDCs and SIDS per se, but a streamlined approach to accreditation. This approach should speed up the time taken for entities to get accredited, while maintaining standards and safeguards (for example around fiduciary, environmental and social issues) We also support the introduction of a ‘project specific’ approach to accreditation, to bring in new partners and accelerate access for specific purposes. We want an accreditation strategy for the GCF to ensure that: the GCF has the right partners to achieve its objectives; that access is facilitated for Direct Access Entities (DAEs), and that DAEs are supported to channel significantly more funding from the GCF. It did not prove possible to secure agreement on an enhanced SAP or Updated Accreditation Framework at the GCF Board meeting in October 2021. The UK will continue work with partners in order to progress these initiatives at the Board in 2022. In terms of the UK’s International Climate Finance (ICF), we