New Delhi: The Fund for Responding to Loss and Damage (FRLD) on Thursday agreed to set aside $20 million for Nepal’s recovery following the devastating floods of 26 August. At its first extraordinary meeting, convened virtually, the Board approved the request in response to Nepal’s climate emergency, which has left more than 2,000 people dead and 5,000 missing.
Since its operationalisation in 2023 at COP28 in Dubai, this is the first time the Loss and Damage Fund, hosted by the World Bank, has agreed to set aside resources in response to a sudden-onset disaster.
Ahead of COP31, which will be held in Turkey, the decision signals a step towards a faster response to climate-induced extreme weather events. The Board agreed to set aside $20 million for direct support, along with an additional $1.6 million for oversight fees, and invited Nepal to submit a formal project proposal for consideration at the Fund’s next meeting.
Nepal has not yet received the money. The Board’s decision to set aside the funds is the first step towards disbursing the assistance.
The $20 million allocation would cover just 0.7 per cent of Nepal’s estimated losses from the 26 August floods in Bhotekoshi River, according to Carbon Brief. However, the Board’s earlier decision established a maximum allocation of $20 million for an individual project or funding request under the mechanism through which Nepal’s request was made.
“Today the Loss and Damage Fund took a historic first step by responding to Nepal, but this cannot be a one-off,” said Harjeet Singh, global convenor of the Fill the Fund campaign. “We must set up a permanent rapid-response system that moves support in days, not months.”
The Loss and Damage Fund has received pledges totalling more than $800 million from 27 countries.
Nepal’s request, submitted on 31 August, less than a week after devastating floods struck the Himalayan country’s Rasuwa and Nuwakot districts, received broad support at the FRLD meeting on Thursday. Fourteen Board members representing least developed countries, African states and Asia-Pacific states backed the request and called for an emergency meeting to address it.
Other blocs, including Latin American countries, Caribbean countries and small island developing states (SIDS), also called for an urgent response from the Board. Developed countries, meanwhile, endorsed holding consultations within the existing Loss and Damage Fund framework.
Since its inception, the Loss and Damage Fund has not disbursed any money to countries, although several project proposals are awaiting approval. Nepal’s request marks a significant moment because it is the first time the Board has agreed to set aside funds specifically for a sudden-onset disaster under the Barbados Implementation Modalities.
“The Loss and Damage Fund Board’s approval of $20 million for Nepal’s flood response shows that when countries come together, they can reach swift, effective consensus to address the urgent needs of vulnerable countries,” said Raju Chhetri, lead climate finance negotiator for the least developed countries at the UNFCCC, in a press release.
(Edited by Prashant Dixit)