DOF, GGGI launch new climate fund program to accelerate climate action

The Department of Finance (DOF) and the Global Green Growth Institute (GGGI) signed an implementation agreement for the country’s Green Climate Fund (GCF) Readiness Program that seeks to speed up climate action through green finance.

Finance Secretary Benjamin Diokno and GGGI Philippines Country Representative Juhern Kim led the signing of the agreement for the program, entitled Readiness Support to Strengthen Philippines’ Capacity and Knowledge on Accessing Green Climate Fund (RPSP1), on December 6, 2022 at the DOF office in Manila.

“This program will bolster the country’s capacity in planning, accessing, delivering and monitoring climate finance through this new global financial mechanism for climate adaptation and mitigation,” said Secretary Diokno.

RPSP1 aims to strengthen coordination among government agencies and enhance capacity to govern climate action and finance in the country. The agreement will help guide the government in achieving the program’s targeted outcomes beginning 2023.

The program includes capacity development activities, including training on GCF for national government agencies and government financial institutions (GFIs), such as the Development Bank of the Philippines (DBP) and Landbank of the Philippines (LANDBANK).

Additional resources such as a handbook and a GCF Philippines website will also be developed to guide government agencies and key stakeholders on their roles and responsibilities in the program.

GGGI Philippines Country Representative Juhern Kim hopes that RPSP1 will enable the Philippines to gain better access to international climate finance.

He said that GGGI Philippines will help the country translate adaptation and mitigation opportunities into well-crafted project proposals that will unlock doors of international climate finance.

GGGI is a treaty-based inter-governmental organization implementing climate adaptation and mitigation projects serving the needs of member countries, including the Philippines.

GGGI is GCF’s major Readiness delivery partner that strengthens developing partner countries’ institutional capacities, governance mechanisms, and planning and programming frameworks for a transformational long-term climate action agenda.

As the world’s largest multilateral climate fund, the GCF has nearly US$11 billion in approved climate funding and a total portfolio of over US$40 billion.

Secretary Diokno recognized that the complexity of the climate finance landscape, the country’s lack of structural capacity, and the stringent procedures for accessing funds and resources make climate finance difficult to obtain.

RPSP1 will help address this challenge by providing technical assistance in developing quality project pipelines for GCF.

Secretary Diokno also said that investing in climate adaptation and mitigation activities is essential in alleviating poverty, reducing inequality, and promoting a low carbon and green economy.

To this end, the government allocates at least PHP1 billion, or around US$18 million, for the People’s Survival Fund (PSF) to finance adaptation projects of local government units (LGUs) and community organizations annually.

According to a report submitted to the Senate, however, the fund is unable to be fully optimized with the disbursement rate only at around 31 percent.

The DOF and GGGI are also undertaking a national level approval process to launch another GCF Readiness project that aims to directly develop six impactful project concepts in collaboration with the DBP and the LANDBANK.

“Navigating new climate finance processes can be challenging, particularly for organizations with limited experience in international funding models. This readiness project will play an instrumental role in terms of providing technical assistance, project development, capacity building, and institutional strengthening,” said Secretary Diokno.