Navigating the GCF requires a deep understanding of how it makes its funding decisions. At the heart of this process is the GCF’s Investment Framework, a comprehensive system used to evaluate every project proposal. This framework is built around six core Investment Criteria that act as the primary benchmarks for assessing a project's quality, impact, and strategic fit. There are also key support mechanisms such as the Readiness and Preparatory Support Programme (RPSP), Readiness Programme and the Project Preparation Facility (PPF) to help you develop a proposal that meets its rigorous standards.
Furthermore, to provide targeted guidance on achieving its core goal of a “paradigm shift,” the GCF has developed Sectoral Guides. These documents offer sector-specific advice on designing transformational projects in key areas such as water, agriculture, energy, and health. Understanding these criteria, support mechanisms, and guidance are essential for navigating the GCF funding process successfully.
Investment Criteria
To be recognized as a GCF project, it is essential to secure appropriate funding modalities. This determination is made through a review process guided by the GCF Investment Framework, which outlines the rationale and methodology for evaluating project proposals. The GCF investment framework consists of the following components:
- (1)Investment policies
- (2)Investment strategy and portfolio targets
- (3)Investment guidelines.
This section will particularly focus on (3) Investment guidelines composing of six GCF Investment criteria, which serve as the specific benchmarks used to assess the quality and effectiveness of each proposal. GCF Investment criteria serves as a guide to assess funding decisions for climate-related projects and programmes. The six criteria (Impact potential, Paradigm shift potential, Sustainable development, Needs of the recipient, Country ownership, Efficiency & effectiveness) covering 24 areas are shown in the table below.
| Criterion | Description | Coverage |
|---|---|---|
| Impact potential | The potential of the project to contribute to climate mitigation or adaptation |
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| Paradigm shift potential | The degree to which the proposed activity can catalyze impact beyond a one-off investment |
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| Sustainable development potential | Co-benefits such as improved health, education, gender equality, or biodiversity |
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| Needs of the recipient | Vulnerability of the country and financing needs of the targeted population |
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| Country ownership | Alignment with national climate strategies and stakeholder engagement |
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| Efficiency and effectiveness | Financial soundness and how well the cost relates to the expected climate benefits |
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Source: Based on Investment framework for GCF-2
The establishment of clear criteria is essential for effective project proposal development and assessment. These criteria ensure transparency and consistency in communicating a project's validity to stakeholders during the GCF review process. They help guide how well proposals align with expectations, clarify what is required, and make the development process more focused. Using these criteria also allows project developers to identify gaps and improve proposal quality over time.
While the GCF Investment Criteria do not indicate the relative importance of each criterion, applicants must consider all criteria in their proposals. This means understanding the necessary information from the start and ensuring completeness. A self-check table with guiding questions is available to help developers assess whether their concept notes meet these standards. Checking more items shows strong coverage, while fewer checks highlight areas needing improvement. The checklist is designed to be user-friendly and adaptable, allowing for different approaches based on the proposal’s context.
