South Korea has been selected as the official host for the UN’s high-profile Green Climate Fund (GCF), after the fund’s board approved plans for a new headquarters in Songdo, Incheon City.

The South Korean government announced on Saturday that it had been chosen to host the planned $100bn-a-year fund after beating competition from Germany, Mexico, Namibia, Poland and Switzerland.

The formation of the GCF was agreed at last year’s UN climate change summit in Durban as a means of managing the $100bn a year in climate-related funding that countries have committed to delivering by 2020.

The board managing the development of the fund is yet to release proposals on how the funding will be raised, although it is understood to be considering a wide range of different options, including the expansion of the global carbon market and the introduction of new levies on international shipping and aviation.

Ministers gathering at the annual UN climate summit in Doha, Qatar next month are expected to rubber-stamp the selection of South Korea as the host for the new fund and continue negotiations on how it will be funded through to 2020 and how to raise the targeted $100bn a year thereafter.

The fund is widely regarded as critical to efforts to get developing countries to support a new binding emissions reduction treaty, which under a timetable agreed in Durban is expected to be agreed by 2015 and finalised by 2020.

Richer nations have committed to provide billions of dollars of funding to help poorer countries switch to cleaner technologies and adapt to unavoidable climate change impacts.

The transfer remains highly controversial with some industrialised countries insisting that they cannot afford significant climate change aid programmes, while poorer countries and charities warn that the $100bn a year commitment falls a long way short of what will be required.

There have also been arguments over how the new funding will be managed and distributed with the formation of the GCF seen as a compromise to win over those nations that had resisted the use of the World Bank to manage climate change funding.

Diplomats indicated that the selection of an emerging economy in the form of South Korea to host the fund could help to ease tensions between developing and industrialised economies.

The move will also provide a further boost to the south-east Asian state’s position as a major clean tech hub, which has seen the government commit to a multi-billion dollar green stimulus programme, sign up to ambitious emission reduction targets, and develop plans for a new carbon market.

The announcement comes as South Korea this week hosts a preparatory meeting for senior negotiators ahead of the Doha Summit next month.

A host of issues remain unresolved ahead of the fortnight talks, which are expected to focus on securing climate funding commitments for the period from 2013 to 2020, finalising the timetable for talks to secure a global agreement in 2015, and securing an extension to the Kyoto Protocol before it expires at the end of the year.

In related news, the high-profile Masdar project in Abu Dhabi this week announced it had awarded design and construction contracts for its new headquarters, which will include the global headquarters of the International Renewable Energy Agency (IRENA).

The new agency will be located at the state-of-the-art Masdar eco-city when the headquarters construction project is completed in summer 2014.

“The award of this contract marks a major milestone in the development of Masdar City,” said Dr Sultan Ahmed Al Jaber, the chief executive and managing director of Masdar. “The buildings integrate cutting-edge technologies in energy efficiency, green building and water conservation. We remain committed to the growth of Masdar City as a technology cluster, enabling companies to set up Middle-East operations to support the achievement of regional renewable energy targets and the development of clean technologies.”