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TWN Info Service
on Climate Change (Oct26/02) Loss and Damage Fund “sets aside” USD 21.6 million for Nepal crisis Kuala Lumpur, 23 Oct, (Jinghann Hong) - At its first-ever extraordinary Board meeting, convened virtually on 22 October 2026 at 8:00 a.m. Eastern Daylight Time, the Board of the Fund for Responding to Loss and Damage (FRLD) adopted a decision to provisionally set aside an additional USD 21.6 million for Nepal. This marks the first time the Fund has responded to a request for support associated with an ongoing climate-induced loss and damage event. The extraordinary meeting was convened to address a single agenda item: Nepal's urgent request for support in response to the catastrophic Bhote Koshi flash floods. In a communication to FRLD Co-Chairs Camila Minerva Rodriguez Tavarez (Dominican Republic) and Georg Børsting (Norway), the government of Nepal called on the Board to “take a special decision to respond rapidly, directly and effectively in accordance with its Governing Instrument.” [On 26 August, Nepal experienced a climate-induced ice-and-rock avalanche in one of its watersheds that generated a debris flow and major downstream flooding along the Bhotekoshi–Trishuli–Narayani river system. A letter was then sent via the Nepal FRLD National Focal Point on 31 August. At time of writing, the government of Nepal currently estimates the initial economic loss and damage from the floods to be at least USD 2.69 billion with the initial recovery and reconstruction needs processed as minimum of USD 4.71 billion. This is notwithstanding the irreparable non-economic losses of socio-cultural heritage, amongst other forms of non-economic loss and damage.] The Co-Chairs and FRLD Secretariat had received many letters from Board Members (BMs) and Alternate Board Members (ABMs) relating to Nepal’s request. The first amongst these a letter on 2 September from 8 BMs and 6 ABMs representing African States, Asia-Pacific States, and least developed countries (LDCs) formally asking for an extraordinary Board meeting under paragraph 21 of the Rules of Procedure to consider Nepal’s request. They also proposed that the Board consider and potentially agree on a provisional set-aside allocation of resources for rapid response funding to Nepal, in addition to inviting Nepal to submit a funding proposal as soon as feasible. In response, the Co-Chairs conducted consultations with both developing and developed country constituencies, after which they convened an informal Board consultation on 16 Sept. to discuss possible responses. Informed by these discussions, the Co-Chairs held two meetings with an informal drafting group in early October to work on draft decision text. Following these efforts, the Co-Chairs jointly decided to convene the extraordinary Board meeting on 22 Oct. to formally consider Nepal's request. The extraordinary Board meeting, which lasted just over two hours and resulted in the swift adoption of the decision text following interventions by BMs and ABMs, who began with expressions of deep condolences and solidarity with the government and people of Nepal. See below for key highlights from interventions. After adoption of the decision text, ABM Maheshwar Dhakal (Nepal) expressed his heartfelt appreciation, saying that the meeting “represents more than a financial decision” as it offered “recognition of suffering, respect for dignity and hope that Nepali people are not alone in their darkest hour.” Dhakal also underlined the significance of the meeting being held immediately ahead of the UNFCCC COP31 [to be held early next month], stating that it provided an opportunity to demonstrate that the FRLD is "not merely a finance mechanism, but a tangible expression of international solidarity with people and countries suffering the devastating impacts of climate change wherever they occur." He further affirmed Nepal's commitment to translating this solidarity into concrete results through a well-designed project proposal, effective implementation and reporting of the results, so that the knowledge products will be useful to the Board in the future.” The decision adopted The adopted decision expressed “…solidarity with the people and the Government of Nepal” and recalled “that the purpose of the FRLD is to assist developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage associated with the adverse effects of climate change, including extreme weather events and slow-onset events.” The Board decided to “(a)…provisionally set aside an additional USD 21.6 million, including USD 1.6 million for oversight fee… from the available commitment authority subject to the Board consideration and approval of a funding request as referred to in paragraph (b) below.” It also decided to “(b)…pilot, during the start-up phase of the FRLD, an approach allowing a new submission of a funding request under the Barbados Implementation Modalities (BIM) outside of the submission period established pursuant to decision B.7/D.3.” It also invited “the FRLD National Focal Point for the Government of Nepal, to consider submitting a funding request, in response to paragraphs (a) and (b) above, for consideration and approval by the Board.” The Board further decided that “that any additional submission of a funding request pursuant to the process referred to in paragraph (b) above shall be subject to a further decision by the Board, taking into account the overall implementation of the BIM and the available commitment authority” and requested “the Secretariat to assess the lessons from the Board’s response to this event for the FRLD’s long-term model, while noting that the response is without prejudice to the design of the long-term model.” Key highlights from interventions Recalling that the BIM already allows support in response major developments related to extreme weather events and slow onset events, Antoine Bergerot (France) acknowledged that national circumstances change significantly and that a country may wish to submit substantially different request reflecting the new need and priorities. [The BIM is the start-up phase of the Fund with an initial allocation of USD 350 million]. In that, Bergerot said that “The current framework does not provide for new submissions after the call for proposals was called. And so, I think this is precisely the possibility that the draft decision would allow us to pilot.” He also commented that this situation does reflect current the start-up phase of Fund and so presents itself as “an opportunity to learn and adapt”. Stating support for adopting the decision, he remarked the decision does strike a “balance” and encouraged Nepal, as it prepares a new funding request, if it wishes to do so, to focus building on projects already existing as this would be a good opportunity to accelerate the delivery of the intervention of the Fund. David Kaluba (Zambia) requested to hear from the FRLD Secretariat on their efforts thus far in reaching out to Nepal, specifically on “how they understand the extent of challenge or the problem,” so that the Board could understand how much information has been collected, which in turn will inform the decision or “solution” that the Board is making. Additionally, Kaluba wanted to understand the mechanics of what went into the drafting of the decision text. Recognising that Nepal has been waiting for a response from the Board for almost 2 months, Leona Hollasch (Germany) considered that it was “necessary for the Board to take this time to consider the request” as the draft decision to be tabled was “a very challenging balance”. She explained, on the one hand, there is the firm wish to facilitate support to Nepal, and therefore, there is a need for pragmatism and flexibility, especially during the BIM phase of the Fund that should allow for testing and learning. On the other hand, the Board also has the responsibility to protect the integrity, transparency, and fairness of the FRLD. Hollasch underlined that the established pilot would not set the precedent for the further operationalization of the long-term model of the Fund but hoped “to be able to draw important lessons learned from the entire process to date, especially on the benefit of national response systems for rapid responses to crises, as well as how recovery actions can contribute to increasing resilience in future, and how to ensure that the FRLD works complementarily to humanitarian assistance efforts.” Jan Dusík (European Union) clarified that “this approach that we have taken is a unique approach that is complementing the orderly implementation of the BIM; and what is proposed here is in line with our understanding that this is not to prejudge them on one hand, but on the other hand is to provide a learning for the development of the long-term model of the Fund, which is also something that is urgently awaiting our attention.” Dusík also added that it would be good to have a joint communication coming out of the Board about the decision that has been taken at the consideration to reflect the “spirit of one Board responding to this specific request”. Taguchi Kazuho (Japan) said that he supported this outcome, reiterating that this response to Nepal is exceptional and does not prejudge the design of FRLD’s long-term operational model. He agreed that looking ahead in the future, regarding rapid disbursement modalities, that the Board would need to advance discussion on this issue in the coming Board meeting as an integral part of long-term model. He also said that the FRLD has potential to play catalytic role and highlighted the need also to elaborate on procedures on collaborating with wide variety of resources, including private and philanthropic organisations. Sumaya Hamdan (Sudan) underscored that this extraordinary Board meeting is adding to the “learning”, and that “I hear a lot on [how] this shouldn’t really set precedence – I see it as a good thing, adding to our learning, adding to what we will built on for long-term model.” Tomas Pérez (Costa Rica) emphasised that loss and damage are no longer a future concern but a reality many will face today. Recognising the significance of extraordinary meeting as an “important institutional milestone”, Pérez put forward three important objectives of the decision: first, that it allows the Fund to respond to Nepal’s urgent request in a manner consistent with its mandate and with the BIM; second, that it enables a pilot approach on how the Fund can respond more effectively to urgent requests in the future; third, that it provides valuable lessons that should inform the development of the Fund’s long-term operational model. He stressed that the decision was not only about responding to Nepal's immediate needs, but also about “continuing to build the institution of what we want the Fund to become.” He further underscored that the true measure of the Fund would lie not in the procedures the Board creates, but in its ability to stand with vulnerable countries when they need support most. Ali Tauqeer Sheikh (Pakistan) said that expedited approval [for Nepal’s funding request] should be in between meetings rather than at B.10 in mid-Dec, as the government and people of Nepal cannot wait any longer. He also wanted confirmation that Nepal’s existing request and the wider pipeline are unaffected in BIM, and that the commitment authority figure to be circulated, stating that “the decision draws on a commitment authority that no document reports” and that decision B.8/2 requests the Secretariat to calculate and present available commitment authority prior to each Board meeting. Further, he said that the lessons from this pilot feed the long-term model and its work on rapid disbursement at B.10. In response to Jan Dusík (EU) who said that “we are open for learning, but not in setting precedent”, Sheikh cautioned against “defining the boundaries of learning." Sheikh also expressed concern that the draft decision text circulated to the Board was narrower than the proposals discussed in the 2 September letter submitted by his seat and others. While acknowledging the decision to set aside USD 21.6 million, Sheikh questioned the basis for the amount, stating that he did not understand why it had been set at that level rather than a higher or lower figure. In his view, “We are predetermining need based on BIM allocations. We are saying it is a one-time Nepal-only window, a sentiment many developing countries have raised their voice to. It gives no timeframe for review or approval; B.10 is far away, as I mentioned.” In addition, he regretted that the final text omitted requests for a Secretariat briefing on needs assessments and for information on coordination with the Green Climate Fund's glacial lake project and other relevant funding arrangements. Sheikh also stated that it was difficult for BMs to agree to hypothetical allocations in the absence of a clear timeline. Adao Soares Barbosa (Timor-Leste) supported the draft text on behalf of the LDCs, noting that there 1500 people have lost their lives, and 5000 people who remain missing. Saying “these are real things we need to think about; this is real loss and damage we need to address together,” Barbosa also emphasised on the need to deliver and that the FRLD could learn from practice that it will have with Nepal. Walter Schuldt (Ecuador) said that the outcome may not have fully reflected the aspirations and ambitions of some members but nevertheless represented a text that could be brought forward for the Board's consideration. On the issue of lessons learned, Schuldt echoed the views expressed by several members that the Board should not place limits on the learning process and cautioned against placing undue emphasis on the “non-precedence”. Ibila Djibril (Benin) said that he was happy to approve the decision text. Martin-Emilio Vogel (Sweden) said that it was important that the Fund could support within the mandate and rules of Fund, and that this would send a strong signal to the Fund’s operational capacity. On further work, he said that it was important that work on the Fund can complement and work coherently with other multilateral finance institutions and humanitarian actors, not to replace but rather complement other sources of climate finance. Tamim Alothimin (Saudi Arabia) recalled that he was among those calling for early action in response to Nepal's request. He stressed that the Board had a clear mandate to act, noting that paragraph 6 of the Governing Instrument places climate-related emergencies within the Fund's scope. He also pointed to the eligible activities adopted by the Board at B.7, which include activities that complement humanitarian action and early warning efforts. On that basis, he expressed support for the adoption of the proposed decision. He further expressed hope that the resources would reach Nepal as quickly as possible through a country-led process coordinated by the country's national authority. Looking ahead, Alothimin offered two reflections for the Board's future work. First, he said the experience could help inform the development of a rapid disbursement modality that would be available to all developing countries, particularly those most vulnerable to the adverse effects of climate change. In this regard, he welcomed further discussions and initial thinking on such an arrangement. Second, he emphasized that the Fund's ability to respond to emergencies, both now and in the future, would depend on the availability of adequate resources. He recalled that the obligation to provide financial resources to developing countries rests with developed country Parties who have the responsibility to do so under Article 4.3 of the UNFCCC and Article 9.1 of the Paris Agreement. Alothimin also referred to paragraph 12 of the COP28 Dubai decision, which urges developed countries to take the lead in providing financial support to the Fund. Haya Al Ali (United Arab Emirates) also stressed that the Fund's ability to fulfil its mandate depends on the availability of adequate and predictable resources. In this regard, she encouraged continued efforts to strengthen resource mobilization and welcomed contributions from all partners toward the Fund's objectives. At the same time, she underscored the importance of converting pledges into timely disbursements, particularly by developed countries, in line with their responsibilities under the Convention and the Paris Agreement. Ensuring that pledged resources reach the Fund in a timely manner, she said, is essential to strengthening its capacity to respond to the growing needs of developing countries. Al Ali also highlighted three considerations for the Board's future work. First, on the timing of the Fund's response, she encouraged consideration of an expedited process for reviewing and advancing Nepal's funding request, including, where procedurally feasible, between scheduled Board meetings rather than waiting until B.10. In her view, the Fund's response should reflect the urgency of the circumstances facing the affected country while remaining consistent with established governance requirements. Second, regarding the availability and allocation of resources, she stressed the importance of ensuring that the proposed provisional set-aside would not prejudice Nepal's existing requests under the BIM framework or adversely affect the broader pipeline of eligible developing countries seeking support. She therefore called for clarification from the Secretariat on the Fund's available commitment authority, including the relationship between the proposed allocation and the existing allocation envelope, to support informed decision-making and effective Board oversight. Third, on the Fund's longer-term operational arrangements, she encouraged the Secretariat to draw on lessons from the Nepal experience and present relevant considerations at B.10, particularly with respect to rapid disbursement mechanisms, simplified access procedures, and more predictable response arrangements. She said the experience of responding to Nepal should help strengthen the Fund's capacity to address future climate-related emergencies, without prejudging the eventual design of a longer-term operational model. Kirsty McNichol (Australia) welcomed the clarification that the USD 21.6 million provisionally set aside for Nepal would be additional to the existing 50% allocation for Small Island Developing States (SIDS) and LDCs under the current USD 350 million BIM framework. She also welcomed the decision in Australia’s capacity as COP31 Presidency of Negotiations, noting that it sent a positive signal regarding the Board's progress and the Fund's growing ability to respond to loss and damage associated with the adverse effects of climate change. Isaac Glassie-Ryan (Cook Islands) stated support on the exceptional response to the Nepal’s urgent needs within the learning context of the BIM and emphasized the importance of ensuring this decision does not prejudge the modalities and arrangements that will be developed under the Fund’s long-term model. He called for clarification on the long-term access modalities, as “in light of the expected overshoot of 1. 5 degrees Celsius, climate driven disasters will only intensify, disproportionately affecting the most responsible and increasing the significant demands on this Fund.” Cassie Moll (New Zealand) said that Nepal's request had underscored the importance of having a rapid response mechanism within the Fund's longer-term operational model. Moll also noted her understanding that the USD 21.6 million provisionally set aside for Nepal would be additional to, and would not affect, the existing 50% allocation for SIDS and LDCs within the current USD 350 million BIM framework. She further emphasized the importance of a coordinated and unified approach by the Board following the meeting to help provide clarity, maintain confidence in the Fund's processes, and demonstrate the Board's shared commitment to those affected. Tosi Mpanu Mpanu (Democratic Republic of Congo) reaffirmed that the scale of devastation that we are seeing globally shows the type of funding and support gap that this Fund needs to and can address. He expressed support for the proposed decision and said he looked forward to engaging meaningfully at B.10 on the development of the Fund's longer-term operational modalities. Responding to concerns, Co‑Chair Tavarez (Dominican Republic) explained that the informal drafting group had sought to identify a meaningful way for the Board to respond to Nepal's request while recognizing that the Fund does not yet have a dedicated rapid disbursement modality, in that the Fund lacks specific templates, assessment methodologies and procedures for rapid disbursement. As such, there was “an acknowledgment and an agreement that we needed to do that within the context of existing modalities, which is the BIM, which is why the language reads that way.” Tavarezadded that any proposal submitted by Nepal would be subject to the same technical assessment criteria that apply under the BIM framework. Looking ahead, Tavarez expressed hope that “as we go into long-term model, while not directly on rapid disbursement modalities, it is on starting to clarify what the long-term access modalities will be.” In this context, references to not prejudging were not on prejudging lessons learned from this process, but rather to avoid prejudging Board discussions at B.10 on the long-term modalities. As for the “gathering lessons” language in the decision text, Tavarez considered it “safeguarding” in that the language “made sure that we are gathering lessons for the rapid disbursement modalities, while […] safeguard the Board discussion on the long-term model and all of the access modalities.” On the issue of the funding set-aside, Tavarez confirmed that the amount earmarked for Nepal would be additional to resources already allocated under the BIM framework and was not intended to affect the remainder of the BIM funding pipeline. Regarding timelines, she noted that as Nepal's request would still need to undergo the [Secretariat’s] assessment process before being submitted to the Board for consideration, the Board could not prejudge either the time required for Nepal to prepare its proposal or the duration of the assessment process, which was why the decision did not include a specific timeline for Board consideration. The FRLD Secretariat, represented by Ibrahima Cheikh Diong, clarified that its engagement with the government of Nepal had included a high-level event held on the margins of the UN General Assembly (UNGA) in New York, where Nepal shared its experience and challenges. On Nepal's existing funding request under the BIM, Diong informed the Board that the Secretariat had been in contact with the government to revise the funding request. Once amended, the proposal would be resubmitted to the Secretariat and continue through the ongoing BIM review process. He emphasized that, as with all countries seeking support from the Fund, the process was ongoing and the Board would consider the matter at B.10 as planned. On complementarity and coordination, Diong said that the Secretariat had engaged with partners involved in the response effort in Nepal to better understand where support from the Fund could add value and complement existing assistance on the ground. Addressing questions on commitment authority, Diong underscored that the conversion of pledges into cash contributions had progressed and indicated that the Secretariat would provide the Board with an update on the latest status of contributions and commitment authority at B.10. In the meantime, he confirmed that the Fund's available commitment authority would allow the Board to set aside the amount proposed in the decision. Diong also noted that the Secretariat was working closely with the government of Nepal as host of the eleventh Board meeting of the FRLD (B.11), which is currently scheduled to take place in Kathmandu from 17 to 19 March next year.
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