African Finance Corporation becomes the first development finance institution from the continent to win accreditation from the Green Climate Fund with the announcement last week that it has been accepted as a partnering institution with the UN-sponsored fund. The AFC was originally invited to consider applying for accreditation and submitted an application in early 2015.
Accreditation allows AFC to access the GCF’s committed pool of capital of $9.3 billion which is dedicated to providing financing and support to climate change projects through a wide range of channels–these include on-lending, grant, lines of credit as well as guarantees. AFC intends to use the fund’s capital for renewable energy investments which is a priority sector of focus for the corporation.
The GCF is headquartered in Korea, and operates within the United Nations Framework Convention on Climate Change (UNFCC). It’s mission is to promote low-emission and climate-resilient development pathways by providing support to developing countries and help them limit or reduce their greenhouse gas emissions. The fund is expected to become the main multilateral financing mechanism to support climate action in developing countries, many of whom are particularly vulnerable to the adverse effects of climate change.
To date, the fund has a total of 20 accredited entities.