For the first time in history, countries have agreed on a dedicated fund to pay out for extreme climate damages in vulnerable regions, finally bringing to a close a tumultuous two weeks at the COP27 climate summit.

Many questions about the hard-won fund remain, including who pays in, who is eligible for the money and who administers it.

But the United Nations summit has brought what was a taboo issue into the mainstream, with even the US, a longtime blocker, accepting the need for such a pot of money.

It was regarded as a breakthrough that funding for so-called “loss and damage,” even made it on to the official agenda for the talks in Sharm el-Sheikh.

“The world is watching,” COP27 presidency Sameh Shoukry said before he gavelled through the deal at around 4.15am on Sunday morning, greeted by a round of applause from weary delegates.

Vulnerable nations argue it is a matter of fairness. Disasters such as extreme flooding, drought and sea level rise have been supercharged by a hotter climate, but are disproportionately hitting countries that did little to cause it.

“The agreements made at COP27 are a win for our entire world,” said Antigua and Barbuda minister Molwyn Joseph on behalf of 39 small island states.

The international community has “restored global faith in this critical process that is dedicated to ensuring no one is left behind,” he said.

Laurence Tubiana, architect of the Paris Agreement, said the creation of a fund marks a “significant mindset shift”.

“We have come a long way, although we have been waiting for this for 30 long years,” said Harjeet Singh from Climate Action Network, who has campaigned for loss and damage for 13 years.

After the talks had run well into extra time, COP president Sameh Shoukry also finally waved through the overarching deal, representing the political agreement from the conference.

Mr Shoukry had had to adjourn the session after Switzerland intervened, amid concerns it fell short on cutting emissions.

The energy section had created new loopholes, targeting greenhouse gas cuts at the vaguely-worded “applicable sectors,” using “low-emission” as well as renewable energy, which many fear allows for the fossil fuel gas.

Saudi Arabia had led the charge against stronger language moving away from polluting fossil fuels. Meanwhile the EU, the UK and small islands were among those lobbying for a phase out of all fossil fuels, as well as a strong commitment to limiting warming to 1.5C above pre-industrial levels.

They warn that the greater the global warming, the worse the climate damages will become and the more money will be needed to cover the costs.

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Towards the end of the second week, delegates wondered whether a deal would materialise, with host nation Egypt leaving it until Friday to produce the first draft, hours before the summit was due to close.

A series of frantic negotiations followed as countries sought to tip the balance of the text in favour of their respective aims.

The COP process relies on consensus so all of the almost 200 countries present have to agree on the deal for it to go through.

Egypt faced criticism for restricting protests, poor organisation and its ongoing imprisonment of British-Egyptian activist Alaa Abd El-Fattah, among many other government critics.

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