UnitedKingdomofGreatBritainandNorthernIreland

                      

Ms. Hela Cheikhrouhou Executive Director Secretariat of the Green Climate Fund Songdo International Business District fNCHEON, REPUBUC OF KOREA

Dear Ms. Cheikhrouhou

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Re: United Kingdom·s contribution to the Green Climate Fund, 2015-2018

We refer to the Contribution Arrangement dated April 291h 2015 between the

United Kingdom of Great Britain and Northern Ireland (acting through the Department of Energy and Climate Change and the Department for International Development) ('UK") , the Green Climate Fund ( Fund") and the International Bank for Reconstruction and Development, serving as the interim trustee of the Green Cli'mate Fund trust fund, relating to the UK's £720m contribution to the GCF ("UK Contribution").

In approving the UK Contribution, UK Ministers indicated that the UK Contribution should support allocation decisions taken by the Board of the Fund. This includes the decision to maximize engagement with the private sector, including thro.ugh a significant allocation to the Private Sector Facitity (PSF). This letter confirms our understanding therefore that the UK Contribution (as part of all contributions) will be used to support a balance of adaptation and mitigation activities, with a significant allocation to the PSF.

Whilst we are fully cognisant of the need to stay within both the letter and the spirit of decisions taken by the Board of the Fund, we will consider one third of the UK Contribution as forming part of the significant allocation from all contributions to the PSF. We view this consideration as an expression of the allocation decisions already taken by the Board of the Fund, and reflecting priorities consistently outlined by UK Board members at Fund Board meetings.

UK ministers approved the UK contribution on the basis of it being 100% GOA-eligible. We. are pleased that the OECD-DAC will soon be considering the GOA-eligibility status of the Fund .. We expect this issue to be resolved before the UK Contribution is disbursed. If full ODA-eligibiHty is not secured, the Contributor will engage the Fund regard ing the use of the UK contribution to ensure that the UK contribution is fully ODA-compliant and reportable for the 2015 provisional return.

Regards

f~~-~ --Liz Ditchburn Department for International Development

Katrina Williams Department of Energy and Climate Change

GREEN CLIMATE FUND

Ms. Liz Ditchburn Department for International Development Abercrombie House Eaglesham Road, Glasgow G75 United Kingdom of Great Britain

Ms. Katrina Williams Department of Energy and Climate Change

3 Whitehall Place London SWlA 2AW United Kingdom of Great Britain

EXECUTIVE DIRECTOR

Date: Reference: Page:

30 Apri l 2015 HC/RWW/tj 1 of2

Subject: Your letter received on 30 April2015 regarding the United Kingdom's contribution to the Green Climate Fund, 2015-2018

Dear Ms Ditchburn, Dear Ms Williams,

On behalf of the Green Climate Fund (the F'und), I acknowledge your letter received by

email today, the content of which is noted.

I acknowledge the view, set out in your lett er, that the United Kingdom's contribution (as part of all contributions made to the Fund) should support allocation decisions taken by the Board of the Fund, including the decision to maximize engagement with the private sector, including through a significant aUocatlon to the Private Sector Facility (PSF). As you know, funding decisions are taken by the Board of the Fund and fait outside the mandate of the Secretariat

In line with decision B.06f06, the Secretariat will report annually to the Board on the status of resources in respect of the allocation parameters. This includes the respective allocation for mitigation and adaptation activities, and for the Private Sector Facility. The Board has the mandate to make any decisions it considers necessary with regard to the allocation of resources, should this annual report demonstrate that resources were not allocated in line with the allocation decisions already taken.

G...en Oi~te Fund Songdo lntemabonal Business District

G:t'ower. 175 Art Center-daero Yeon.su·gu. lncheon 406-8-40

Republic of Korea

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GREEN CLIMATE FUND

Page2

HC/RWWftj

We acknowledge the view expressed in your letter that the UK contribution needs to be ODA-eligible and look forward to the outcome of the OECD-DAC consideration of this issue.

In accordance with the standard provisions which apply to the contribution made by the United Kingdom, both your letter referred to above and this letter will be published on the Fund's website.

Yours sincerely,