Consideration of funding proposals – Addendum VII Funding proposal package for FP197

The Green Guarantee Company (GGC), managed by the Development Guarantee Group (DGG) and accredited by MUFG Bank, Ltd., seeks USD 82.5 million in equity from the Green Climate Fund (GCF) to create a guarantee vehicle. GGC aims to leverage its capital 10x to provide up to USD 4 billion in guarantees for green bonds and loans in developing countries, specifically targeting those with sub-investment grade ratings to attract global institutional investors. The programme focuses on five GCF result areas: energy generation and access, low-emission transport, buildings/cities/industries/appliances, health/food/water security, and infrastructure/built environment. It targets a mitigation impact of 74.6 million tCO2e and reaches approximately 36.9 million beneficiaries over a 20-year lifespan. The proposal includes a detailed Transaction Selection Process (TSP) to ensure climate impact and a comprehensive Gender Action Plan to promote equality and women's empowerment in the supported projects.

• GGC aims to leverage USD 405 million of total capital to mobilize USD 4 billion in green bonds and loans for climate finance in developing countries over a 10-year period.
• The programme requests USD 82.5 million in equity from the GCF, with total financing including co-finance from the FCDO and other investors totaling USD 405 million.
• GGC's primary objective is to address the market failure where global institutional investors avoid developing countries due to perceived risk and sub-investment grade ratings.
• The expected climate impact over the 20-year lifetime of GGC is a reduction of 74.6 million tCO2e and reaching 16,999,962 direct and 19,906,811 indirect beneficiaries.
• GGC will operate using a 10x leverage multiple to maintain an investment grade credit rating, which is essential for its role as a guarantor.
• The programme targets five specific GCF result areas: energy generation and access, low-emission transport, buildings, cities, industries, and appliances, health, well-being, food and water security, and infrastructure and built environment.
• GGC employs a seven-step Transaction Selection Process (TSP) to ensure projects meet climate, environmental, social, and gender standards before approval.
• The governance structure includes an Impact Committee with climate experts who have veto power over transactions to ensure climate impact is prioritized over profit.
• The programme has received no-objection letters (NOLs) from Gabon, India, Indonesia, the Philippines, Brazil, Lao, Rwanda, and Trinidad & Tobago.
• GGC intends to facilitate an exit for anchor investors (GCF and FCDO) by Year 10, potentially through a public listing on a global market like the LSE by Year 5.
• The Independent Technical Advisory Panel (TAP) endorsed the proposal but highlighted risks regarding the start-up nature of GGC and DGG, and the potential for conflicts of interest given MUFG's multiple roles.
• A comprehensive Gender Action Plan is integrated, requiring project-level gender assessments and action plans for 100% of projects receiving guarantees.

APA

Green Climate Fund (2022). Consideration of funding proposals – Addendum VII Funding proposal package for FP197. https://www.greenclimate.fund/sites/default/files/document/gcf-b34-02-add07-rev01.pdf

Chicago

Green Climate Fund. Consideration of funding proposals – Addendum VII Funding proposal package for FP197. 2022. https://www.greenclimate.fund/sites/default/files/document/gcf-b34-02-add07-rev01.pdf.

Wikipedia

{{cite report |author=Green Climate Fund |title=Consideration of funding proposals – Addendum VII Funding proposal package for FP197 |date=16 October 2022 |url=https://www.greenclimate.fund/sites/default/files/document/gcf-b34-02-add07-rev01.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{greenclimatefund2022consideration, author = {{Green Climate Fund}}, title = {{Consideration of funding proposals – Addendum VII Funding proposal package for FP197}}, institution = {Green Climate Fund}, year = {2022}, month = oct, url = {https://www.greenclimate.fund/sites/default/files/document/gcf-b34-02-add07-rev01.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }