The Indigenous World 2025: The Green Climate Fund (GCF) and the Fund for responding to Loss and Damage (FRLD)
United Nations Climate funds are financial mechanisms established under the United Nations Framework Convention on Climate Change (UNFCCC) and related agreements to support so-called developing countries to mitigate climate change, adapt to its effects, and transition to low-carbon, climate-resilient economies. Indigenous Peoples have encountered many barriers to accessing these funds and therefore advocate to ensure direct access and better implementation of their projects.
The Green Climate Fund (GCF), established under the UNFCCC in 2010 and operational since 2015, is the world's largest climate fund. It supports developing countries to achieve their Nationally Determined Contributions (NDCs) and pursue low-emission climate-resilient pathways.[i] The GCF's primary mandate is supporting the Paris Agreement's 1.5°C temperature goal which is now, unfortunately, widely considered unachievable. The GCF receives financial contributions from so-called developed countries (UNFCCC Annex-1) as well as from public, non-public and alternative sources.[ii]
The GCF's Initial Resource Mobilization (2014) raised USD 10.3 billion in pledges, with USD 7.2 billion available for commitments. The first replenishment (GCF-1, 2020-2023) raised USD 10 billion, with USD 9.9 billion received and invested across 100+ countries.[iii] The second replenishment (GCF-2, 2024-2027), launched in July 2022, had received USD 12.8 billion in pledges as of December 2024.[iv]
The GCF Board consists of 24 members equally representing Annex-1 and Non-Annex 1 Countries, with four Active Observers (AOs) from civil society and private sector organizations (PSOs) serving two-year terms (maximum two consecutive terms). The AOs represent the GCF Observer Network (CSO Network) of Civil Society Organizations (CSOs), Indigenous Peoples, and local communities.
Although the GCF has not recognized Indigenous Peoples as a distinct observer constituency, despite this being an established UNFCCC practice, it has implemented an Indigenous Peoples’ Advisory Group (IPAG) that was operationalized in 2022 and a stand-alone Indigenous Peoples’ Policy. Besides engaging in the CSO Network, Indigenous Peoples advocate through the Indigenous Peoples’ Advocacy Team (IPAT).
The Fund for responding to Loss and Damage (FRLD) was formally launched at the 27th Conference of the Parties (COP27) to the UNFCCC in 2022 and further operationalized at COP28 in 2023. It aims to support developing countries to address the irreversible impacts of climate change, particularly those that exceed the scope of adaptation efforts—such as extreme weather events, desertification, and rising sea levels.
While the FRLD marks a significant milestone in global climate finance, ensuring direct access for Indigenous Peoples remains a major challenge. The FRLD Board will likely adopt the “access modality”, “decision-making structure”, and other policies from existing climate finance mechanisms such as the GCF. However, these mechanisms often have complex eligibility requirements and government-controlled funding channels. The FRLD provides financial support through grants and concessional financing, with the World Bank serving as its interim Secretariat and host for the first four years. Indigenous Peoples and many other actors are, however, advocating for a more independent governance structure to ensure equitable and effective fund distribution.
As of 23 January 2025, the FRLD had received pledges totalling USD 741 million from 27 contributors.[v] In December 2024, the Board of the FRLD selected its Executive Director. However, the FRLD has yet to establish its full Secretariat and operational structures, including comprehensive social and environmental policies, allocation criteria, and long-term fund mobilization strategies. Estimates for loss and damage in developing countries suggested a need for USD 116-435 billion in 2020, with projections indicating that this could rise significantly by 2030, potentially reaching USD 200-400 billion annually, underscoring the urgent need for increased funding commitments and clearer implementation frameworks.
This article is part of the 39th edition of The Indigenous World, a yearly overview produced by IWGIA that serves to document and report on the developments Indigenous Peoples have experienced. The photo above is of an Indigenous activist Funa-ay Claver, a Bontok Igorot, standing alongside Indigenous youth activists and others. They are protesting against the repressive laws and human rights violations suffered through the actions and projects of the Government of the Philippines and other actors against Indigenous Peoples at President Marcos Jr’s national address on 22 July 2024 in Quezon City, Philippines. The photo was taken by Katribu Kalipunan ng Katutubong Mamamayan ng Pilipinas and is the cover of The Indigenous World 2025 where this article is featured. Find The Indigenous World 2025 in full here
Overview
As of 31 December 2024, the GCF had – through its Board – approved a total of 286 projects with project investment commitments amounting to USD 15.9 billion. Of this total, the GCF is currently implementing USD 12.9 billion, with projects officially considered under implementation once the Funded Activity Agreement (FAA) with the Accredited Entity (AE) becomes effective. As of the same date, the GCF had disbursed USD 5.2 billion. The GCF estimates that these projects will help 1 billion people to improve their climate resilience and will contribute to preventing the emission of 3.1 billion tonnes of CO2 equivalent.[vi]
In terms of project scale, micro- and small-scale projects constitute less than half of the portfolio (11% and 35%), while medium and large-scale projects account for 36% and 18%, respectively. Notably, the large-scale project portfolio decreased by 1% from 2023-2024. The size of a project is important, given that larger projects pose a higher risk of negative impacts on nature and human rights.
In terms of financial instruments, the project investment amount comprises 42% grants, 41% loans, 11% equity, 3% results-based payment, and 3% guarantees.[vii] Between 2023 and 2024, grants and loans increased by 1%, while equity and guarantees decreased by 1%. The high proportion of loan-based investments in the GCF portfolio raises concerns, as it contradicts Paragraph 9.4 of the Paris Agreement, which emphasizes the need for scaled-up financial resources that are primarily grant-based, particularly for developing countries.
Across GCF result areas, a significant amount is being invested in the “livelihood of people and communities”. However, there is no data available on how these investments have included Indigenous Peoples’ climate-friendly lifeways. This is followed by investments in “health, food and water security”, “ecosystem and ecosystem services”, “infrastructure and built environment”, “energy generation and access”, and “forest and land use”. Notably, most interventions on forest and land use, as well as energy generation across the world, have had negative impacts on Indigenous Peoples.
Among the eight GCF result areas, the lowest investment is directed to “transport” and “building, cities, industries and appliances”. By investment theme, 57% of funding goes towards adaptation and 43% towards mitigation in grant-equivalent terms. In nominal terms, however, adaptation constitutes 46% and mitigation 54% of the portfolio. In terms of access modality, 76% of funds are accessed by international AEs, 15% by national Direct Access Entities (DAEs), and 9% by regional DAEs.
These figures show the GCF’s emphasis on quantifiable project impacts, primarily measured in terms of tonnes of CO₂ equivalent mitigated and the number of people increasing their resilience. However, the fund remains heavily accessed by international AEs, limiting opportunities for direct access by national and regional entities. Beyond these quantitative metrics, it is equally important to enhance direct access and ensure available data on the projects’ social, cultural, economic, and ecological impacts, with special emphasis on the well-being of Indigenous Peoples and communities. The Strategic Plan for the GCF (2024-2027) provides a foundation for maximizing positive social and cultural outcomes, including for Indigenous Peoples. In addition, the REDD+ policy approved in 2024 provides some provisions for safeguarding Indigenous Peoples' rights within GCF-funded projects.
GCF Policy for the results-based payments for REDD+
The GCF adopted its policy for results-based payments for REDD+ at its 40th Board meeting, held on 21-24 October 2024. Paragraph (a) of the policy defines the integration of a REDD+ results-based payment funding modality into the regular project and programming activity cycle of GCF. It also establishes specific requirements for results-based payments for REDD+, criteria for assessing proposals for results-based payments for REDD+, and additional elements of the standard project and programming activity cycle that apply to results-based payments for REDD+.[viii]
Specific requirements for results-based payments for REDD+ include, among other elements, reinvestment of the proceeds in REDD+ activities in line with the Paris Agreement and Cancún Safeguards. It also requires compliance with the relevant GCF policies. Furthermore, a distinction is made between (i) payment for emission reductions (ERs) resulting from underlying activities and (ii) the reinvestment of the proceeds. The activities undertaken in the past and leading to the REDD+ results for which the result-based payments are requested have been implemented in a manner consistent with the relevant GCF policies. For the reinvestment of the proceeds, full compliance with the GCF policies is required—the relevant GCF policies list includes the Indigenous Peoples’ Policy.
The criteria for assessing proposals for the results-based payments for REDD+ contain the provisions that the proposal must meet the UNFCCC criteria as defined in UNFCCC Decision 9/CP19. The Warsaw Framework for REDD+ should be in place and made publicly available on the Lima REDD+ Information Hub, with the Safeguard Information System (SIS) being one of the four elements of the Warsaw Framework for REDD+. In order to maintain integrity and ensure compliance with GCF policies, the GCF has implemented an Independent Redress Mechanism (IRM), which provides recourse to those affected or who may be affected by GCF projects or programmes and also accepts requests for reconsideration of funding proposals that have been denied by the GCF Board.[ix]
GCF Independent Redress Mechanism (IRM)
In 2024, the GCF terminated the FAA for the Nicaraguan project “Bio-CLIMA: Integrated climate action to reduce deforestation and strengthen resilience in BOSAWÁS and Rio San Juan Biospheres” (FP146[x]) due to non-compliance-with GCF policies and procedures on environmental and social safeguards (ESS). This project was approved in 2020 and aimed to reduce deforestation in the UNESCO-designated Bosawás and Rio San Juan Biosphere Reserves in the Caribbean Region of Nicaragua.
The IRM received a complaint in 2023 and thereby undertook a thorough investigation and submitted its findings to the Board. The complaint documented repeated attacks against Indigenous Peoples and heightened concerns that implementation of the project may fuel further violence against Indigenous Peoples. The GCF Secretariat also undertook a thorough investigation and assessment process, as well as actions to address the instances of non-compliance with GCF policies and procedures, which constituted legal breaches to the relevant legal agreements between GCF and the AE.
Indigenous Peoples’ Advisory Group (IPAG)
In 2024, the IPAG of the GCF held its two meetings (IPAG-4 and IPAG-5) in Songdo, South Korea, aimed at strengthening Indigenous Peoples' access to climate finance and ensuring that their knowledge and priorities are recognized, supported, and safeguarded in GCF operations.
IPAG-4, held from 5-8 February, focused on addressing barriers to direct access for Indigenous communities. IPAG members engaged with various GCF divisions, identifying key challenges and opportunities while making recommendations to shape ongoing discussions on equitable climate finance.[xi]
Building on these efforts, IPAG-5, from 26-29 August, delved deeper into the implementation of the GCF Indigenous Peoples’ Policy. Discussions focused on, among other items, annual performance reports (APRs) and strategizing ways of enhancing Indigenous Peoples’ participation within the GCF’s project portfolio. A major focus was ensuring that Indigenous knowledge systems and rights were not only acknowledged but actively incorporated into funding mechanisms and climate action initiatives.[xii]
Through these meetings, the IPAG reminds GCF of its commitment to fostering a more inclusive and equitable climate finance framework, one that respects and promotes the rights, knowledge, and leadership of Indigenous Peoples in addressing the global climate crisis.
Fund for responding to Loss and Damage (FRLD)
Through decisions 2/CP.27 and 2/CMA.4, the Conference of the Parties (COP) and the Conference of the Parties serving as the Meeting of the Parties to the Paris Agreement (CMA) established new funding arrangements for assisting developing countries that are particularly vulnerable to the adverse effects of climate change when responding to loss and damage. As part of these arrangements, the Parties to these Conferences created the Fund for responding to Loss and Damage (FRLD), designed to address both economic and non-economic impacts associated with climate change, including extreme weather events and slow onset events.[xiii] At its 28th and 5th sessions, respectively, the COP and CMA operationalized the FRLD as an entity of the Financial Mechanism of the Convention that would also serve the Paris Agreement. The FRLD is accountable to and functions under the guidance of both the COP and the CMA.[xiv] For key decision-making, the FRLD has a Board of 26 members comprising 12 from UNFCCC Annex-1 Countries and another 14 from Non-Annex Countries.[xv]
In 2024, the FRLD Board held four meetings: the first Board meeting (B1) was held from 30 April-2 May in Abu Dhabi, United Arab Emirates; followed by B2 from 9-12 July in Songdo, South Korea; B3 from 18-20 September in Baku, Azerbaijan; and B4 from 2-5 December in Manila, the Philippines.
During the FRLD Board meetings, several important decisions were taken to lay the foundation for the FRLD’s work. Jean-Christophe Donnellier from France and Richard Sherman from South Africa were elected as the Board Co-Chairs. At B3, the Board elected Ibrahima Cheikh Diong as its first Executive Director for a four-year term beginning 1 November 2024. The Board also decided to establish the FRLD as a financial intermediary fund (FIF) hosted by the World Bank.
The Board and the World Bank exchanged their views on the conditions for establishing a FIF, including on how to ensure that the most vulnerable people on the frontline of climate impacts can access support from the fund, including through direct access to its resources.[xvi] The Board also approved key documentation enabling the World Bank to act as interim trustee and host of the FRLD’s Secretariat. During B2, the Board selected the Philippines as its host country. Moving forward, the Co-Chairs of the Board signed the Trustee Agreement, the Secretariat Hosting Agreement with the World Bank, and the Host Country Agreement with the Republic of the Philippines. As of December 2024, a total of USD 745 million had been pledged to the FRLD by 27 contributors.[xvii]
Thus far, the FRLD has launched work on access modalities; financial instruments, modalities, and facilities; ensuring the active participation of observers in Board meetings and related proceedings; and arrangements for establishing and operationalizing the annual High-Level Dialogue on Coordination and Complementarity. These dialogues were established by the COP and CMA – through decisions 1/CP.28 and 5/CMA.5, annex II, paragraphs 11-16 – and are co-hosted by the FRLD and the UN Secretary-General. They play a crucial role in strengthening collaboration among stakeholders. A key outcome is the formulation of recommendations to expand and improve existing funding mechanisms while also exploring new approaches to address loss and damage effectively.
Key issues for Indigenous Peoples in the FRLD include direct access to funding, a dedicated seat as an active observer, full and effective participation in Board meetings and related proceedings, development of an Indigenous Peoples’ Policy and other safeguard measures, and broader participation in activities on the ground.
Going forward
Establishing direct access channels for Indigenous Peoples and their organizations is crucial to securing funding from the GCF and the FRLD without intermediaries. Efforts to achieve this are already underway.
For the past few years, the Nepal Federation of Indigenous Nationalities (NEFIN), in partnership with the International Work Group for Indigenous Affairs (IWGIA), the Indigenous Peoples’ International Centre for Policy Research and Education (Tebtebba Foundation), the Centre for the Autonomy and Development of Indigenous Peoples (CADPI), the Pastoralists Indigenous Non-Governmental Organizations’ Forum (PINGO’s Forum), and numerous other civil society organizations within the GCF CSO Network, has consistently advocated for placing human rights and Indigenous Peoples’ rights at the heart of GCF policies and operations. Maintaining this momentum is key as the GCF embarks on its 2024-2027 strategic plan.
In the context of the FRLD, IWGIA, NEFIN, and other Indigenous Peoples’ organizations and representatives have long advocated for placing Indigenous rights at the centre of climate finance, including within the FRLD, even before its establishment. Their efforts have been pivotal in promoting a more inclusive and equitable approach to climate finance, ensuring that Indigenous communities – who suffer irreversible tangible and intangible losses and damages – have direct access to funding and decision-making processes. As the FRLD moves towards full operationalization in the coming years, continued advocacy will be essential to shaping its governance, ensuring transparent and direct funding mechanisms, and securing the recognition of Indigenous knowledge and leadership in addressing loss and damage.
Sustained advocacy, strong partnerships, and active engagement, alongside the effective implementation of Indigenous Peoples’ policies and safeguards, are essential to ensuring that funding is distributed fairly and appropriately. Without these efforts, these climate funds risk replicating existing barriers in climate finance, limiting Indigenous participation and, therefore, failing to meet their objectives.
Tunga Bhadra Rai belongs to the Rai Indigenous Nationality of Nepal. He is an Indigenous researcher and anthropologist currently working as the Director of the Climate Change Program of the Nepal Federation of Indigenous Nationalities (NEFIN). He engages at the UNFCCC, GCF, FRLD and in other national and international fora. Mr. Rai has published articles on Indigenous Peoples. Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Rosario Carmona is a Programme Consultant on Climate at the International Work Group for Indigenous Affairs (IWGIA). She is also a painter and anthropologist, holds a PhD from the University of Bonn, and has diplomas in Indigenous Peoples’ Rights and Political Ecology.
This article is part of the 39th edition of The Indigenous World, a yearly overview produced by IWGIA that serves to document and report on the developments Indigenous Peoples have experienced. The photo above is of an Indigenous activist Funa-ay Claver, a Bontok Igorot, standing alongside Indigenous youth activists and others. They are protesting against the repressive laws and human rights violations suffered through the actions and projects of the Government of the Philippines and other actors against Indigenous Peoples at President Marcos Jr’s national address on 22 July 2024 in Quezon City, Philippines. The photo was taken by Katribu Kalipunan ng Katutubong Mamamayan ng Pilipinas and is the cover of The Indigenous World 2025 where this article is featured. Find The Indigenous World 2025 in full here
Notes and reference
[i] Green Climate Fund. “Overview. About GCF.” Accessed 3 January 2025.
https://www.greenclimate.fund/about
[ii] Green Climate Fund. “Governing Instrument of the Green Climate Found.” Accessed 4 January 2025. https://www.greenclimate.fund/sites/default/files/document/governing-instrument.pdf
[iii] Green Climate Fund. “Resource Mobilization.” Accessed 9 January 2025. https://www.greenclimate.fund/about/resource-mobilization/gcf-2
[iv] Ibid
[v] United Nations Framework Convention on Climate Change (UNFCCC). “Pledges to the Fund for responding to Loss and Damage.” Accessed 3 March 2025. https://unfccc.int/topics/climate-finance/funds-entities-bodies/fund-for-responding-to-loss-and-damage/pledges-to-the-fund-for-responding-to-loss-and-damage
[vi] Green Climate Fund. “Projects and Programs.” Accessed 9 January 2025. https://www.greenclimate.fund/projects/dashboard
[vii] Ibid
[viii] Green Climate Fund. “Policy for results-based payment for REDD+.” Accessed 13 January 2025.
https://www.greenclimate.fund/sites/default/files/document/policy-results-based-payments-redd-b40-16-full.pdf
[ix] Green Climate Fund. “Independent Redress Mechanism”. Accessed 20 January 2025. https://irm.greenclimate.fund
[x] Green Climate Fund. “FP146”. Accessed 20 January 2025. https://www.greenclimate.fund/project/fp146
[xi] The outcomes of this meeting can be accessed here: https://www.greenclimate.fund/document/gcf-b40-inf13-add03-0
[xii] The outcomes of this meeting can be accessed here: https://www.greenclimate.fund/document/gcf-b41-inf12-add01
[xiii] United Nations Framework Convention on Climate Change (UNFCCC). “Climate Finance-Fund, Entities and Bodies.” Accessed 16 January 2025.
https://unfccc.int/sites/default/files/resource/decision%202%20CP%2027.pdf
[xiv] United Nations Framework Convention on Climate Change (UNFCC). “Climate Finance-Fund, Entities and Bodies: Fund for Responding to Loss and Damage.” Accessed 16 January 2025.https://unfccc.int/loss-and-damage-fund-joint-interim-secretariat
[xv] Ibid
[xvi] Ibid
[xvii] United Nations Framework Convention on Climate Change (UNFCC). “Climate Finance-Fund/Entities and Bodies/fund for responding loss and damage: Fund for Responding Loss and Damage.” Accessed 17 January 2025.
https://unfccc.int/topics/climate-finance/funds-entities-bodies/fund-for-responding-to-loss-and-damage/pledges-to-the-fund-for-responding-to-loss-and-damage
