Green Climate Fund
ISLAMABAD: ISLAMABAD: The Green Climate Fund (GCF) has approved a significant project for Pakistan, allocating $50 million aimed at developing localized climate solutions by leveraging the nation’s burgeoning start-up ecosystem.
This initiative is set to play a crucial role in addressing the pressing climate challenges facing the country.
In collaboration with the National Rural Support Programme (NRSP), the GCF plans to support innovative, homegrown climate solutions tailored to Pakistan’s unique needs.
A vital aspect of this project involves funding a venture accelerator, which will provide essential resources and support to early-stage start-ups focusing on climate initiatives.
Additionally, the GCF will make a first-loss equity commitment as an anchor investor in the Climaventures Fund, ensuring that funds are available for promising climate ventures.
The approval of this project was part of a broader decision made by the GCF executive board during their meeting in Songdo, Incheon, South Korea, where a total of 16 projects were approved.
The board’s decision underscores the urgent need for action, particularly in light of Pakistan’s vulnerability to the adverse impacts of climate change, which include severe droughts and catastrophic floods.
Pakistan’s nationally determined contributions highlight an ambitious target for renewable energy, while its national adaptation plan focuses on critical sectors such as agriculture, water resources, health, and disaster risk reduction.
The GCF-funded project, implemented by NRSP, aims to ignite a domestic market for innovative climate solutions. This includes providing grant financing for ideation-stage climate ventures, as well as equity investment in scalable ventures.
The GCF initiative represents a long-term alternative to the constrained local public sector funding, which often faces challenges due to high levels of indebtedness.
Through this project, the GCF will fund a venture accelerator designed to support up to 100 start-ups at the ideation stage. These start-ups will receive grants and expert guidance to help them develop their ideas into viable businesses.
Furthermore, the GCF’s commitment of $15 million in first-loss equity into the $40 million Climaventures Fund—managed by ‘Sarmayacar’—will specifically target investments in climate ventures that are ready for market entry, as well as other promising ventures emerging from the accelerator. This collaborative effort aims to foster innovation and resilience in Pakistan’s approach to climate change.
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