Climate finance is high on the policy agenda for the on-going negotiations for a global climate change pact. It is estimated that by 2020, developing countries will face about US$100 billion annually in additional costs of mitigating and adapting to climate change. The African Union estimated that the continent needed an annual US$67 billion in 2009 to cope with the impacts of climate change. The Copenhagen Accord committed to setting up a climate fund to assist developing countries, Africa included, with adaptation to and mitigation of the impacts of climate change. An initial ‘fast-start’ commitment of US$30 billion is expected to be disbursed in the period 2010-2012. While the need for these funds is beyond doubt, questions are being raised about the governance of the actual disbursement of the funds as well as the accountability of recipient countries and institutions.

Key governance issues are emerging as critical to the successful equitable and just disbursement of finances. These include a committed global finance system not weighed down by unjust conditionalities for developing countries and viable, transparent and accountable recipient institutions. Developing country concerns and objections have included proposals to channel climate funds through the standing bilateral and multilateral agreements as well as through the Global Environment Facility (GEF) Trust Fund and a clear definition and separation of private and public finance sources. Propositions that the climate investment funds be administered by the World Bank have been criticized strongly by developing countries who favour a more representative fund governance structure. Of particular concern is whether the World bank, given its historical modus operandum, grasps the challenges and need to ensure a clear allocation of finance to mitigation and adaptation and to the representative voice of the countries that are most affected by the impacts of climate change.