This paper argues that the Green Climate Fund’s (GCF) effectiveness in supporting Nationally Appropriate Mitigation Actions (NAMAs) hinges on overcoming significant governance challenges. Using perspectives from international environmental law and governance literature, it identifies some crucial governance challenges and analyses the capacities granted to the GCF Board in dealing with them. For the GCF to be effective in incentivising development and diffusion of NAMAs, the authors argue that the contracting Parties to the United Nations Framework Convention on Climate Change will have to forge an institution that has the capacity to balance diverging expectations on NAMAs. The analysis indicates that the GCF Board has the governance capacity to efficiently deal with this challenging balancing act. Inability to exercise this capacity may result in establishing a strong empty shell for supporting NAMAs.