Loss and Damage Fund: How It Works and What Nepal Needs to Know
The Loss and Damage Fund (FRLD) operates at the programme level through accredited entities, not by giving cash directly to households. This article explains how allocations work, what activities qualify, and how to track whether Nepal receives funding — without relying on unverified 2026 board decisions or invented document references.
The Fund for responding to Loss and Damage (FRLD) — often called the Loss and Damage Fund — was established by the COP28 decision (Decision 1/CP.28) in December 2023. It is not a household‑level compensation scheme. It does not accept applications from individuals or communities affected by floods, landslides, or drought. The fund operates at the programme level: money flows to accredited entities that design and implement projects approved by the fund's board.
What the Fund Is — and What It Is Not
The governing instrument (Decision 1/CP.28, Annex) sets out the fund's legal basis, governance rules, and the roles of the board, the trustee, and the secretariat. The World Bank serves as the interim trustee under a hosting agreement signed in 2024. The fund's board later selected the Philippines as the host country for the secretariat; this was not decided in the COP28 decision itself.
The fund's own communications make clear there is no application window for individuals or households. Any suggestion that affected families can "apply" or "claim" money directly from this fund is incorrect. The fund works through accredited entities — typically international organisations, development banks, or national institutions that meet fiduciary standards — which submit funding proposals for board approval.
How Allocation Decisions Move Through the System
The sequence documented in the fund's governance framework runs roughly as follows: the board meets, reviews funding proposals submitted by accredited entities, takes a decision, and then instructs the trustee to transfer resources to the accredited entity. The trustee holds the funds and executes transfers based on board decisions. The recipient is the accredited entity that submitted the proposal, not a government ministry by default.
For Nepal to receive an allocation, an accredited entity would need to develop a proposal aligned with the fund's criteria, secure board approval, and then manage implementation. Board decisions — when published on the fund's website — show the project title, the accredited entity, the amount approved, and the intended outcomes. Those decision pages are the primary public record of any allocation.
What an Allocation Can Cover at Programme Level
Approved funding can be used for activities that address loss and damage: rehabilitation of infrastructure destroyed by extreme events, restoration of ecosystem services, support for livelihoods that have been permanently disrupted, and technical assistance for risk assessment and planning. The governing instrument draws a line between "addressing loss and damage" (programmatic actions) and "compensating for loss and damage" (direct financial compensation), and the fund's mandate covers the former. The fund's policy documents also exclude general budget support, routine development expenditures, and direct cash transfers to individuals.
Scale and Status of the Fund
Pledges announced at COP28 and subsequent sessions total several hundred million US dollars, with a portion deposited with the World Bank as interim trustee. The board has begun reviewing proposals, but as of late 2026 no Nepal‑linked project has appeared in published board decisions. The first allocations have gone to projects in particularly vulnerable regions; the board's meeting reports and decision pages are the authoritative source for which projects have been approved.
Nepal's Engagement So Far
Nepal's national adaptation plan and its updated nationally determined contribution both flag loss and damage as a priority. The government has engaged through the Least Developed Countries (LDC) Group and participated in the Transitional Committee process that shaped the fund's design. Nepal is not a board member, so it does not vote on allocation decisions.
Domestic climate‑finance tracking in Nepal relies on budget tagging by the Ministry of Finance and reporting through the Climate Change Council's annual climate finance reports. Those systems capture domestic and international flows but do not yet have a dedicated tag for the FRLD because no flows have been recorded.
How to Track Whether Nepal Receives an Allocation
Anyone who wants to monitor whether Nepal receives FRLD funding can watch three public sources:
- Board decision pages — search the fund's website for "board decisions" and filter by country or accredited entity.
- Project registry — lists approved proposals with implementing entities and budgets.
- Nepal's annual budget documents and the Ministry of Finance climate finance reports — tag externally funded programmes; searching for "Fund for responding to Loss and Damage" plus "Nepal" will surface any recorded flow.
No single portal consolidates this information; the trail is assembled by cross‑referencing these sources.
What Remains Unknown for Nepal
The following are not publicly available as of late 2026: the list of accredited entities actively developing proposals for Nepal, the timeline for the next board meeting where a Nepal proposal could be considered, and whether Nepal has nominated a national designated authority to interface with the fund. The fund's secretariat has not published a country‑specific pipeline. Any claim about imminent funding, specific amounts, or designated recipients is speculative until it appears in a board decision or an accredited entity's public disclosure.
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