The A Practical Guide to Understanding and Establishing Climate Finance Units is a policy brief developed by the Center for Access to Climate Finance, hosted by the NDC Partnership Support Unit, with support from the UK Foreign, Commonwealth & Development Office. It provides practical guidance for governments on how to establish and operate Climate Finance Units (CFUs) to improve access to climate finance and align funding with national climate and development priorities.
Key insights:
Developing countries, excluding China, need around USD 2.4 trillion per year by 2030 to meet climate goals, with 40% expected to come from external finance.
Climate Finance Units help countries avoid fragmented finance flows, duplication, and weak alignment between climate funding and national priorities.
CFUs are often placed inside ministries of finance, because these ministries manage budgets, resource mobilization, and coordination across sectors.
Their main roles include mobilizing and coordinating climate finance, integrating climate into national budgets and economic planning, supporting project preparation, promoting gender equality and social inclusion, and building institutional capacity.
The brief analyzes examples from Bangladesh, Belize, Fiji, Kenya, Mozambique, Rwanda, and Uganda.
Common challenges include limited technical capacity, small teams, overlapping mandates, dependence on external funding, complex climate finance procedures, and weak private sector engagement.
The brief recommends giving CFUs a clear mandate, strong political backing, sustainable funding, skilled staff, transparent governance, MRV systems, and stronger links with the private sector and national institutions.
