KATHMANDU, Oct. 23: The Board of the Fund for Responding to Loss and Damage (FRLD) has agreed to set aside approximately $20 million in emergency support for Nepal following the devastating Bhote Koshi floods of August 26, marking the first time the international climate fund has moved to respond to a specific disaster.
However, climate activists and civil society organisations at home and abroad have warned that the amount is only a fraction of Nepal’s estimated losses and damage, calling for a substantial increase in the Fund’s resources and faster support for climate-vulnerable communities.
The FRLD Board, at its first-ever extraordinary meeting held virtually on October 22, agreed to set aside approximately $20 million for Nepal following the devastating Bhote Koshi floods of August 26. It also agreed to pilot a mechanism through which Nepal can formally seek the funding, alongside a separate $1.6 million oversight fee.
The decision represents the first time the Fund, established at the UN climate conference in 2022 and made operational in 2023, has moved to respond to a specific disaster. Nepal is also the first country to formally request its support in an acute emergency.
However, campaigners say the breakthrough must become the beginning of a much larger effort to mobilise climate finance, rather than a one-off response that leaves vulnerable communities struggling to rebuild their lives.
“We welcome the historic decision, but let’s be clear with the facts: this is not enough, and we have to scale up the Fund,” said Prayas Adhikari, a climate activist who also addressed the virtual Board meeting.
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According to Adhikari, the $21.6 million package, including the oversight fee, covers only around 0.45 percent of Nepal’s estimated losses and damage from the Bhote Koshi disaster, even before accounting for non-economic loss and damage (NELD), such as loss of lives, cultural heritage, social networks and community identity.
“We have to continue our campaign and demand that the Fund be filled, upholding the call for $1 trillion per year,” he said, arguing that without a substantial increase in resources, the Fund’s mechanisms would remain ineffective in supporting countries and communities facing escalating climate impacts.
Nepal’s government has estimated the disaster-related losses and damage at a minimum of $2.69 billion, while recovery and reconstruction needs stand at at least $4.71 billion. These figures underline the enormous gap between the resources provisionally earmarked by the Fund and the assistance required to rebuild damaged infrastructure, restore livelihoods and support displaced families.
International campaigners have echoed Adhikari’s concerns, arguing that Nepal’s case exposes the wider failure of global climate finance to match the scale and urgency of the crisis.
Harjeet Singh, global convenor of the Fill the Fund campaign and founding director of the Satat Sampada Climate Foundation, said the decision was historic but should not become a one-off response. He called for a permanent rapid-response system capable of delivering support within days rather than months.
“Nepal needs billions to rebuild, and this Fund is responding only in millions,” Singh said, pointing to the gap between the needs of vulnerable countries and the resources made available by wealthy nations.
Tasneem Essop, executive director of Climate Action Network International, also welcomed the decision but warned that the Fund remained severely underfunded. She said the response had become possible only after sustained pressure from civil society and vulnerable countries.
Essop urged developed countries to fulfil their financial commitments, noting that pledges on paper could not rebuild homes or restore livelihoods. The Fund needs its outstanding pledges converted into actual money and fresh contributions to respond effectively to escalating climate impacts.
Liane Schalatek, associate director of the Heinrich Böll Foundation in Washington, said the decision demonstrated that the Fund could adapt its procedures to urgent needs. However, she cautioned that its limited resources continued to constrain its ability to respond to disasters whose costs run into billions.
She called for the rapid operationalisation of emergency response and direct community support mechanisms, alongside new financial commitments from developed countries, preferably at COP31 in Antalya, Türkiye.
Civil society groups have also stressed that the funding must reach affected people, particularly marginalised communities. Jocelyn Perry of Refugees International called for a simplified direct-access window through which community organisations, including informal and unregistered groups, could receive small grants for locally led recovery.
Lien Vandamme of the Center for International Environmental Law said the decision must move beyond symbolic solidarity towards meaningful climate justice and reparations. She argued that countries least responsible for climate change should not continue to bear its greatest costs.
What happens next?
Despite the Board’s decision, the money is not yet available for immediate disbursement. Nepal must submit a detailed funding proposal, which will require approval before the funds can be transferred. The government therefore needs to prepare a credible, transparent and time-bound plan identifying priority communities, urgent recovery needs and mechanisms to ensure that assistance reaches those most affected.
The Fund must also establish a standing emergency response mechanism so that future disaster-hit countries do not have to wait weeks for extraordinary meetings and political negotiations. Campaigners say predictable procedures, faster decisions and accessible financing should become standard features of its operations.