New Policy Brief: A Practical Guide to Establishing Climate Finance Units

COP29 in Baku, Azerbaijan, concluded with governments agreeing on a new collective quantified goal (NCQG) for climate finance, replacing a previous goal of mobilizing $100 billion per year to address the needs of developing countries. While the NCQG decision represents increased ambition and climate finance flows have increased in recent years, they remain far below what is needed — particularly for Least Developed Countries (LDCs) and Small Island Developing States (SIDS). Parallel efforts to enhance access to climate finance are essential, and strengthening institutional frameworks will be key to ensuring funds are delivered efficiently, equitably and at the scale needed to accelerate the implementation of Nationally Determined Contributions (NDCs). 

One key approach explored through the Taskforce on Access to Climate Finance, a collaboration between developing countries and climate finance providers, is the establishment of Climate Finance Units (CFUs) within national governments. CFUs serve as dedicated entities that enhance coordination, strengthen project pipelines and mainstream climate into national development planning.  

To support countries in setting up and effectively operating CFUs, the Center for Access to Climate Finance released a new Policy Brief offering practical guidance through actionable recommendations. 

The Brief provides insights from CFUs already in place across multiple countries, including Bangladesh, Belize, Fiji, Kenya, Mozambique, Rwanda and Uganda. Case studies highlight real-world success factors such as strong mandates, cross-government coordination and alignment with national climate priorities, including NDCs. Examples demonstrate how CFUs play a vital role in mobilizing and managing climate finance and are important vehicles to attract additional investment from public and private sources. 

To help countries establish and strengthen CFUs, the Policy Brief offers practical guidance on defining clear mandates, securing political support and embedding CFUs within national governance structures. It emphasizes the need for skilled staffing, continuous capacity building and effective coordination to manage financial flows and engage stakeholders. To ensure long-term sustainability, the guidance highlights strategies for integrating CFUs into national budgets and diversifying funding sources, reducing reliance on short-term external support. 

"The creation of CFUs within governments marks a revolutionary development in accelerating access to climate finance,” notes Denis Mugagga, Head of the Climate Finance Unit at the Ugandan Ministry of Finance, Planning and Economic Development. “Uganda’s experience demonstrates that embedding a CFU within the appropriate Ministry enhances coordination, improves resource mobilization and ensures that climate investments align with national development priorities. To fully unlock climate finance at scale, CFUs must be well-resourced, technically equipped and empowered to engage both public and private actors. Strengthening CFUs is not just an option, it is a necessity for delivering on NDCs and building climate-resilient economies".  

The Center for Access to Climate Finance is hosted by the NDC Partnership Support Unit and is an initiative of the Taskforce on Access to Climate Finance. The Center is committed to delivering thought leadership on climate finance access by generating knowledge and solutions tailored to climate-vulnerable countries. By equipping governments with the right institutional structures, the Center is helping countries bridge the finance gap and accelerate implementation of climate commitments.