World's biggest climate fund ramps up investment plans

By Simon Jessop and Virginia Furness

LONDON (Reuters) -The world's biggest multilateral climate fund said it will make its largest ever series of investments and speed up dealmaking as it looks to help poorer nations respond to global warming.

The Green Climate Fund's plan to release about $1.2 billion for 17 projects mostly in Asia and Africa follows approval by shareholders including the United States at a meeting this week, against a fractious political backdrop that has seen development aid slashed.

Official development assistance could fall 17% this year after a 9% drop in 2024, the OECD said in a June report, led by hefty cuts to U.S. aid by President Donald Trump.

"At a time when collective climate action is more needed than ever, GCF is stepping up to deliver on its mandate," GCF Co-Chair Seyni Nafo said in a statement.

The GCF disbursement includes $227 million for an initiative to expand green bond markets in 10 countries. Green bond markets are where companies raise capital for projects that limit climate change or otherwise benefit the environment.

In South Asia, it will invest $200 million in the India Green Finance Facility to scale renewables and energy efficiency, while in East Africa it will invest $150 million in the food system to support nearly 18 million people.

All the projects will bring the GCF investment portfolio to $18 billion across 133 countries. So far, countries have pledged $29.9 billion to the GCF and paid in $21 billion.

As well as releasing more money, the GCF board also approved plans to speed up its work with partner organisations, which can include accredited entities like other multilateral lenders and so-called Direct Access Entities in developing countries.

From an average 30 months to accredit a DAE, the aim is to shorten the time to nine months or less by overhauling its procedures, including carrying out much of the due diligence at the project stage.

(Reporting by Simon Jessop and Virgina Furness; Editing by Emelia Sithole-Matarise)