Johannesburg — COUNTRIES risked losing part of their sovereignty in exchange for international development funding, Minister in the Presidency Trevor Manuel warned in an interview yesterday.

Manuel, who is responsible for national planning, was appointed this week to the high-level advisory group on climate change finance, an international body set up by United Nations (UN) Secretary-General Ban-ki Moon.

This follows the nomination of Tourism Minister Marthinus van Schalkwyk as SA's candidate for the top UN climate job, and further boosts SA's international profile. Yvo de Boer, head of the UN Framework Convention on Climate Change, which oversees climate negotiations, will step down at the end of June.

"It's important that decisions (on Eskom and energy planning) are taken within SA. If we transfer responsibility to the international finance institutions, we will be handing over important parts of our sovereignty," Manuel said, noting that the US held veto power in the World Bank.

This was in reference to Eskom, which has applied for a 3,75bn loan from the World Bank. The US and UK have threatened to oppose the loan, saying institutions such as the World Bank should finance renewable energy, rather than the construction of coal-fired power stations.

The furore has brought a larger debate, on the role these institutions should be playing, into sharp focus. Many non-governmental organisations argue that the World Bank, the International Monetary Fund and other development finance institutions should be funding low-carbon projects and taking account of the risks of climate change.

Others argue that an entirely new financial mechanism is needed to disburse the funds, given the undemocratic nature of these institutions and lack of trust on the part of developing countries.

Manuel said the group's focus on unlocking finance - needed for developing countries to adapt to the risks of climate change and mitigate their emissions - would help negotiators deal with the "nitty-gritty" of a proposed new agreement on climate change.

But he acknowledged global finance institutions are flawed and countries had sometimes made commitments they did not keep.

"In the past it has been easy for countries to make commitments they have no intention to see through," Manuel said, referring to finance and emissions.

"Unless we ensure the principle of responsibility finds its way back into the discourse, the world will be a lousy place. There have been a number of propositions, such as a levy on airline tickets, but they haven't found much traction. I think it will be important to look at all the issues anew."

But raising money in a recession will be a task in itself.

"One of the biggest challenges is that the world's largest economies are running huge deficits," he said.

It is far from clear how the estimated 100bn a year needed by 2020 will be found.