The financial mechanism was established under the Convention and the Kyoto Protocol, to provide financial resources on a grant or concessional basis to assist developing country Parties implement the Convention, including for the transfer of technology. It functions under the guidance of and is accountable to the Conference of the Parties, which shall decide on its policies, programme priorities and eligibility criteria related to this Convention. The operation of the financial mechanism was assigned by the COP to the Global Environment Facility (GEF) on an on-going basis, subject to review every four years.

Article 4.5 of the UNFCCC urges developed country Parties and Annex II Parties to take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly to developing countries, to enable them to implement the provisions of the Convention.

Annex II Parties provide information in their National Communications on practicable steps to promote, facilitate and finance the transfer to other Parties, or other Parties’ access to, environmentally sound technologies and know-how to give effect to their commitments under Article 4.5 of the Convention.

The COP, by decision 2/CP.14, welcomed the Poznan strategic programme on technology transfer, as a step towards scaling up the level of investment in technology transfer in order to help developing countries address their needs for environmentally sound technologies and recognized the contribution that this strategic programme could make to enhancing technology transfer activities under the Convention.

There are three funding windows to support technology transfer under the Poznan Strategic Programme, namely: (1) technology needs assessments (TNAs); (2) piloting priority technology projects linked to TNAs; and (3) dissemination of GEF experience and successfully demonstrated environmentally sound technologies (ESTs).

Lessons learned from the work on technology transfer under the UNFCCC highlighted the need for immediate follow-up actions in two main areas: (1) to assist developing countries to assess, prioritize and update their technology needs, and (2) to provide technical assistance to project developers in developing countries in converting project ideas identified in TNAs into project proposals that will meet the standards of international financial providers.

In response to this need, the UNFCCC secretariat in close collaboration with the EGTT developed the UNFCCC guidebook on preparing technology transfer projects for financing, which could be used as a tool to enable developing countries to convert project ideas resulting from TNAs and other sources into project proposals for financing. In addition, a series of regional workshops on project preparation were organised in close collaboration with international organizations aimed at enhancing the capacity of project developers in developing countries in preparing project proposals for financing. Further, a training package on project preparation was developed for trainers building on the experiences and lessons learned from the regional workshops.