As part of SEED's recent activities at COP21 in Paris last week to promote low carbon solutions from the SME sector, it hosted a working dinner about "The Green Climate Fund and SMEs: How to ensure public climate funding reaches the Bottom of the Pyramid". Attended by stakeholders from across the NGO, funder, academic and regional development bank sectors, the group explored what the role of the Green Climate Fund (GCF) was likely to be in the years to come in funding the private sector and how to link the SME community to the flow of funding. The attendees all agreed that this was a critical issue as much of the international funding earmarked for climate change and low carbon solutions will be channeled through the GCF and that as things stand, the SME sector is likely to have difficulty accessing it.

The group had a number of observations and suggestions on how to engage around this issue:

• The GCF through its private sector facility does have the broad outlines of a pathway into the GCF for SMEs but due to capacity constraints at the Fund, it’s unlikely that it will be proactive in reaching out to SMEs or searching for investment opportunities in the space.  

• One of the greatest barriers to accessing GCF financing is the simple lack of information in country about who is the country point person for the GCF and which government department it is important to liaise with.

• Considering the high percentage of women in the SME sector, if the GCF was able to channel more funding into this area it would help it address gender issues as well as environmental and economic ones.

• Considering the often high level of corruption in state, para-statal and large companies in some developing countries, it will be crucial to ensure access to the GCF by SMEs to ensure that funding is effectively directed to impactful low carbon projects.

• Due to the diffuse nature of the SME sector it is likely that much of the early work in developing mechanisms and pathways into the GCF for SMEs will need to be done by civil society and aggregators such as incubators, accelerators and industry associations.

The group was keen to continue the conversation and start mapping out potential interventions and opportunities to address this critical problem and will look to reach out to other key stakeholders in a series of conversations and gatherings.

Read more about the Green Climate Fund here.