Green Climate Fund (GCF) - Project Preparation Facility (PPF)

The Green Climate Fund (GCF) was set up in 2010 and aims to promote the paradigm shift towards low-emission and climate-resilient development pathways by providing support to developing countries to limit or reduce their greenhouse gas emissions and to adapt to the impacts of climate change, taking into account the needs of those developing countries particularly vulnerable to the adverse effects of climate change. The GCF is an operating entity of the Financial Mechanism of the UNFCCC and the Paris Agreement.

GCF recognises developing countries may face capacity constraints in developing climate finance proposals. That is why they provide financial and technical assistance for the preparation of project and programme funding proposals through the Project Preparation Facility (PPF). Funding available is up to USD 1.5 million for each application to the PPF, commensurate to the funding proposal being developed and to the activities included in the PPF application. Support is available through two modalities: PPF funding; and PPF service.

PPF funding:
Accredited Entities (AEs) and Project Specific Assessment Approach (PSAA) applicants receive funding in the form of grants, repayable grants or equity to undertake project preparation activities. They are responsible for managing the grant implementation processes, including procurement of consultants, and are accountable for the oversight, use, and reporting of the approved funds and activities.

In general, if PPF support results in a feasible project with potential for income generation, the PPF amount financed by the GCF should be repayable on terms and conditions to be determined at the Funding Proposal development and review stages. If an AE or PSAA applicant assigns a project supported by the PPF to a third party without prior approval of the GCF, the entity would repay the PPF funding to the GCF.

PPF service:
Project preparation activities are provided to the AE or PSAA applicant through a consultancy firm competitively procured by the GCF from a panel of 32 pre-qualified firms with Long Term Agreements with the GCF. The PPF Service modality is primarily intended for Direct Access Entities (DAEs) and aims to address the complexity of procurement  and contracting of appropriate consulting service providers for complex project preparation activities. This modality also removes the need for the entity to enter into grant agreements and receive funds directly from the GCF.