UN climate disaster fund moves to provide US$20mil aid for Nepal

On Thursday, the UN's climate loss and damage fund made its first significant move, agreeing to provide Nepal with US$20 million in aid following devastating floods in August. The funds were triggered by a climate-related ice and rock avalanche that killed over 1,400 people and left more than 5,000 missing. This is the first time the fund has set aside money for any country, marking a crucial test of its credibility.

The decision was made at the fund's first extraordinary meeting since its launch in 2022, with no objections raised. Co-chair Camila Minerva Rodriguez Tavarez announced following the virtual meeting that the decision had been adopted. However, the decision does not mean that Nepal will immediately receive the funding, which is equivalent to less than 0.5% of the government's US$4.78 billion estimate for reconstruction.

To receive the aid, Nepal must first present a proposal, which will then need to be approved by the fund's board. There is no set timeline for the process. The creation of this fund to respond to loss and damage has been a significant achievement for developing countries, receiving applause at the UN climate conferences in 2022 and 2023 (COP27 and COP28).

Despite its significance, the fund has faced criticism due to the modest pledges from governments – totaling US$822 million to date – and a disbursement cycle disconnected from climate disasters. As of now, no money has been disbursed.