Nepal’s negotiators hailed the $21.6 million grant from the UN’s Loss & Damage Fund for the Trisuli Valley disaster on 26 August, but it was approved reluctantly, represents only 0.4% of the cost of recovery and reconstruction, and there are strings attached.
The Fund for Responding to Loss and Damage (FRLD) this week provisionally approved the grant to Nepal for relief, rehabilitation and reconstruction two months after the flood catastrophe. It was announced in the run-up to a global climate summit (COP31) in Türkiye that starts 9 November.
Although Nepal is the first beneficiary of this scheme set up by the United Nations Framework Convention on Climate Change (UNFCCC) during a previous climate summit in Egypt’s Sharm El-Sheikh in 2022, it came after three full decades of lobbying by developing countries for climate justice.
Nepal’s Finance Minister Swarnim Waglé and Environment Minister Gita Chaudhary wrote to the fund five days after the flood in August, seeking urgent assistance for a disaster they said was triggered by climate breakdown. Prime Minister Balendra Shah then made an impassioned speech at the UN General Assembly last month, calling for climate justice and solidarity.
Nepali officials have hailed the $20 million grant as a result of effective diplomacy and intense lobbying with the international community. However, some members of the FRLD Board at its extraordinary meeting on 22 October reportedly expressed reservations about the grant to Nepal, saying it should not set a precedent for pending claims by other countries to the Fund.
MILESTONE OR MILLSTONE?
“This landmark decision reflects the spirit of multilateral cooperation, climate justice and collective responsibility towards countries vulnerable to the adverse impacts of climate change,” said Maheshwar Dhakal of Nepal’s Ministry of Forests and Environment, who is currently serving with the FRLD from the Least Developed Countries (LDC) Group.
“It is not only a significant milestone for Nepal but also a powerful message of hope and solidarity for developing countries,” he added.
Although Nepal has tried to put a brave face on the grant, $1.6 million of the $21.6 million will go for administrative costs, and the FRLD will have to approve a detailed proposal for where Nepal wants to spend the money. Rehabilitation and reconstruction will cost $4.7 billion, so the grant is only 0.4% of what is needed to rebuild.
Nepal’s Manjeet Dhakal is lead adviser to the LDC Chair on climate change, and says we should not expect the international community to accept all of Nepal’s demands, but added: “The fund was established for a purpose like this. And for the first time it has made a decision for our country, it’s symbolic and has long-term relevance in terms of setting a precedent.”
Only 1,500 remains of victims of the flood have been recovered, but at least 5,000 people are still unaccounted for. More than 60,000 people were directly affected by the flood, 15,000 of them children. Twelve operating and under construction hydropower plants generating 1,000MW were damaged or destroyed.
Climate skeptics have argued that the cascading disaster on 26 August was a result of geo-tectonic factors, and the heavy death toll and damage was because of recent settlements and infrastructure building along a vulnerable river valley, and cannot be entirely blamed on global warming.
In an interview with Nepali Times, Manjeet Dhakal disputed this: “We have enough resources and information such as World Weather Attribution strongly linking the floods to climate change and global warming.”
He says the Nepal government now needs to use its own rapid assessment of the damage, package them and submit a plan on utilising the fund for effective rehabilitation and reconstruction.
The Loss & Damage Fund operates through mechanisms like the Green Climate Fund (GCF) which in Nepal it works with accredited agencies like the Alternate Energy Promotion Centres (AEPC), the National Trust for Nature Conservation (NTNC) and NIMB bank for disbursement.
But experts say that ultimately it should be the National Disaster Risk Reduction and Management Authority (NDRRMA) that should lead the process because there may be bigger and more frequent Himalayan floods in future as the atmosphere warms.
“The $20 million was a limited fund for the short term, but our future preparedness needs serious consideration because there will be more and bigger disasters,” warns watershed scientist Madhukar Upadhyay. “Our strategy shouldn’t be to ask for money every time there is a disaster, it will never be sufficient and the funds are shrinking. We need to strengthen the capacity of local communities to deal with future disasters.”
The Nepal disaster will be front and centre of discussions at COP31 in Türkiye, and it will be an opportunity for its delegation to push the agenda of the vulnerability of mountain countries.
The United Nations Environment Programme (UNEP) released its Emissions Gap Report 2026: The Point of Return timed for the summit, warning that average global temperature would rise to 2.6°C above pre-industrial levels during this century. It said greenhouse emissions needed to be reduced by 18% by 2030, 45% by 2025 and 69% by 2040 to limit warming to 1.5°C.
“We are unlikely to hold the 1.5°C limit because the proposal to reduce fossil fuel dependence has been unpopular at recent COPs,” says Upadhaya, alluding to the United States and other countries backtracking on emission targets.
A 2.6°C rise would be catastrophic for the Himalaya which scientists say will then lose two-thirds of its remaining ice-cap, as glaciers shrink and the snowline moves up the mountain. If that happens, the Trisuli Valley flood will have been just a rehearsal for even bigger disasters to come.
High Asia is called the ‘Third Pole’ because it has the third largest volume of fresh water stored as ice, after the Arctic and Antarctica. If these ice caps melt, models show increased flow on Himalayan rivers until 2060 and steadily declining water volume thereafter for the 2 billion people who live downstream in Asia.
Says Manjeet Dhakal: “Despite economic downturns and geopolitics, the grant for Nepal shows that the international community is still committed to climate action. But it will not be enough to meet the consequences of a 2.6°C rise in global temperatures this century.”