UN-backed Green Climate Fund (GCF), the largest global climate fund for developing countries, announced that it has roughly quadrupled its capacity to financing new climate projects, adding $4 billion for investments through a change in its balance sheet management approach.

The new approach comes as state-backed funding for the GCF has fallen, particularly due to a move earlier this year by the Trump administration to withdraw from a series of climate, energy and sustainable development organizations, including the GCF.

Launched in 2010 as part of the United Nations Framework Convention on Climate Change’s (UNFCCC) financial mechanism, the GFC is the world’s largest dedicated climate fund, with a mandate to foster low-emission, climate-resilient development pathways in developing countries. The Fund aims to deliver equal amounts of funding to mitigation and adaptation, and supports developing countries in achieving their climate ambitions. To date, the GCF has committed over $20 billion across 134 developing countries.

Under the new approach, resulting from a board decision earlier this month, the GCF will reduce the amount of capital that it holds in reserve on its balance sheet. According to the GCF, the new approach will enable approximately $5.65 billion to be available for funding new programs and projects over the next two years, compared to $1.37 billion previously.

GCF Executive Director Mafalda Duarte said:

“This reform allows us to manage GCF’s balance sheet much more efficiently while preserving the unique concessional and risk profile of GCF in the financial system that allows us to do what others can’t with the largest network of partners both from the public and private sectors.”

Duarte added that the new approach will enhance the climate impact of contributions to the fund, and will be further enhanced by the multiplier effect of co-finance investments.

Duarte said:

“Importantly, we expect that this USD 4 billion will unlock at least three times that amount in co-finance, resulting in an additional and much needed USD 16 billion worth of investments in the short term that will make countries and communities more resilient to the impacts of climate change, promote energy-food-water security, catalyze private sector investments and create jobs.”