This paper evaluates the climate financial intermediary funds (FIFs), specifcally the three largest; Global Environment Facility (GEF), Climate Investment Funds (CIF), and Green Climate Fund (GCF), which are some of the largest sources of multilateral grant and concessional finance for climate, especially for middle-income countries.
The report puts forth several key findings that reveal significant challenges at the systemic level and differing performance across FIFs. FIF funding is not allocated according to shared criteria measuring results and impact, nor are there consistent results and impact reporting standards. This makes it hard for donors to assess where best to put their scarce grant resources. Recommendations include:
- consolidating funds in order to increase efficiency and impact;
- deploying more concessional funds at the climate finance portfolio (vs. transaction) level to achieve greater scale and leverage;
- avoiding the creation of new climate funds that would further fragment this system; and
- allocating FIF finance according to a shared set of criteria that maximizes mitigation and adaptation impact and impact per dollar of FIF funding.