UN Climate Fund Votes to Help Nepal, a Historic Step Far Short of the Need

A United Nations fund to help developing nations pay the costs imposed by climate change voted Thursday to allocate money for Nepal as the country recovers from devastating flooding in August.

It was a historic step for the fund—the first time it has allocated money to a vulnerable country in an immediate response to climate impacts. But that also highlighted the severe limitations it faces.

It was 2022 when nations agreed to create the Fund for responding to Loss and Damage. The aim was for wealthy nations to contribute money that would flow to developing countries to cover irreversible economic losses caused by climate change. The fund has yet to disburse any money.

The disaster in Nepal, where flooding unleashed by a landslide and glacial collapse killed some 1,500 people, with more than 5,000 still missing, was exactly what the fund was meant to address. Several members of its board recognized this during a live-streamed virtual meeting Thursday that was called specifically to consider a request for support from Nepal.

“Loss and damage are no longer a future concern,” said Tomás Soley Pérez, representing Costa Rica. “They are a present reality for many vulnerable countries. Today it is Nepal. Tomorrow it will be any one of our countries.”

Yet while the outcome was widely praised by government representatives and civil society groups, many said it underscored the fund’s weakness and inability to meet its mandate.

The decision by the board, composed of 26 representatives from governments around the globe, did not actually provide the money, $20 million, but merely allocated it—Nepal must now formally apply and have its request approved. Assuming that final step is taken, which could come at the next board meeting in December, the amount distributed would represent less than 1 percent of the initial economic loss and damages from the flooding, which the Nepali government said is at least $2.69 billion. Another $4.71 billion is needed for initial recovery and reconstruction, the government said.

Harjeet Singh, global convenor of the Fill the Fund campaign and founding director of the Satat Sampada Climate Foundation in India, said the vote came only after civil society groups and developing nations launched a relentless campaign pressing the board to take immediate action. Even with this success, he said, Nepal is unlikely to receive any money until next year at the earliest.

Ali Tauqeer Sheikh, representing Pakistan on the fund’s board, called during the meeting for his colleagues to move faster, and criticized the lack of a schedule for the money to flow.

Despite the shortcomings, many people who have supported the fund praised the board’s decision. Raju Pandit Chhetri, lead climate finance negotiator for the least-developed countries at the U.N. Framework Convention on Climate Change, said in a statement: “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.”

As of March, 27 countries had pledged $822 million to the fund. The largest amount has come from the United Arab Emirates, which pledged $100 million. Actual contributions were only $630 million, and some of that has yet to be transferred in. The United States contributed $17.5 million in 2024, before the Trump administration withdrew from the Paris climate agreement.

“We don’t have sufficient money, that’s the heart of the problem,” Singh said. He added that wealthy countries have been delaying the disbursement of money and “will continue to delay it because the moment that fund is empty, there’s pressure to fill it again.”

While many developing nations called for this more rapid response to Nepal to serve as a model for the fund to take swift action, representatives of some wealthy countries, including Germany and Japan, said the vote should not set a precedent for future emergency funding outside the board’s standard process.

So far, 119 countries have sent 176 requests to the fund, seeking a total $2.8 billion in support. The board is expected to consider its first funding decisions beyond the emergency money for Nepal at its next meeting in December, with up to $350 million available. 

How the board will choose among the requests, with only a fraction of the needed money to spend, Singh said, is “the billion-dollar question.”

Toward the end of Thursday’s meeting, the board heard from Maheshwar Dhakal, a representative of Nepal, who thanked his peers for their support and stressed the severity of what people in his country were experiencing.

“In some of the hardest-hit communities, entire settlements have been wiped out, leaving no survivors to report who has perished or who has survived,” Dhakal said. He added that the vote represented a powerful example of solidarity and hope, saying, “behind these numbers are human lives.”

Inside Climate News reporter Bob Berwyn contributed to this article.