Progress in making ambitious emission reductions has been slow to date. Climate finance can play a crucial role in assisting developing countries to make the transition to more environmentally sustainable systems of energy production and use, while also addressing developmental priorities of energy security and energy poverty. Currently, the largest sources of international public finance for climate mitigation in developing countries are the World Bank-administered Clean Technology Fund (CTF), the Green Climate Fund (GCF) and the Global Environment Facility (GEF). Operational since 2015, the GCF has increasingly become a major source of mitigation finance; in 2020, alone, it approved the largest amount of mitigation finance at USD 1,022 million for 11 mitigation projects during the first year of its first replenishment period (GCF-1). Currently about 45% of the financing approved since 2003 flowing from the dedicated climate finance initiatives that Climate Funds Update (CFU) monitors is approved for mitigation activities (excluding REDD+ – reducing emissions from deforestation and forest degradation, plus the sustainable management of forests and the conservation and enhancement of forest carbon stocks). This is largely to support the development and deployment of renewable energy and energy efficiency technologies in fast growing countries. The cumulative amount of finance approved for mitigation from climate funds was USD 11.2 billion as of December 2020.
