Nepal Gets $20 Million From UN Loss and Damage Fund After Floods

Nepal will receive $20 million from the United Nations climate Loss and Damage fund after the floods that tore through the Bhotekoshi and Trishuli region on August 26, the government said late on Thursday. The board of the Fund for Responding to Loss and Damage, known as the FRLD, agreed the money at the first extraordinary meeting in its history, held on Thursday, October 22. It is the first time the fund has set aside money for any country, and Nepal is the first country to formally ask it for help in an acute emergency.

The August flood killed more than 1,400 people and more than 5,000 people are still missing, according to the National Disaster Risk Reduction and Management Authority. About 60,000 people from about 15,000 families were directly affected. The water damaged roads, bridges, schools and 13 hydropower plants, and the damage has been estimated at about $2.69 billion. Early estimates put the cost of recovery and reconstruction at about $4.71 billion.

A first payment, and a small one

The $20 million, about NPR 3 billion, is real money for the families who lost homes and land. It is also less than 1 percent of what the flood cost. Twenty million dollars is the maximum a country can request in a single application to the fund, and Nepal will not receive it at once. The government must first present a proposal, and the board must approve that proposal before any money moves. There is no firm timeline for the process, and the fund has not yet disbursed money to any country.

Camila Minerva Rodriguez Tavarez, a co-chair of the board, called the outcome truly historic after the virtual meeting. Harjeet Singh of the Satat Sampada Climate Foundation, who has campaigned to fill the fund, called the decision a landmark first step and a sign of how far the fund still has to go.

How Nepal asked

Agriculture, Forests and Environment Minister Gita Chaudhary and Finance Minister Swarnim Wagle wrote jointly to the fund on August 31, less than a week after the flood, asking for fast support for the affected communities. Board members from the least developed countries, African states and Asia-Pacific states then pressed for the extraordinary meeting, backed by letters from other groups and by civil society campaigners who kept up the pressure for seven weeks.

Prime Minister Balendra Shah used his first speech to the United Nations in September to warn that Nepal's disaster should be read as a warning to the world. He blamed climate change for the flood and pointed out that Nepal's own emissions are negligible.

Why the fund exists

The fund was established at the COP27 climate talks in 2022 and made operational at COP28 in 2023, after years of argument by developing countries that are among the least responsible for climate change and among the most exposed to its damage. Governments have pledged about $822 million to it so far. Critics say that total is far too small and that the fund's payment process was built in a way that did not match the speed of a real disaster. Nepal's case is the first test of whether the fund can answer an emergency while the emergency is still shaping people's lives.

For the families in the flood zone, the test is simple. The money has been set aside. What they still do not have is a date for when it will reach them.