Loss and Damage Fund approves $20 million for Nepal; proposal still requiredLoss and Damage Fund ले नेपाललाई २० मिलियन डलर स्वीकृत गर्‍यो, प्रस्ताव पेस गर्न बाँकी

On 26 August, an ice-and-rock avalanche in a Nepali watershed triggered a debris flow and major downstream flooding along the Bhotekoshi–Trishuli–Narayani river system. The floods caused extensive damage and loss of life.

Agriculture, Forests and Environment Minister Gita Chaudhary and Finance Minister Swarnim Wagle wrote to the fund on 31 August seeking urgent assistance for flood-affected communities.

Of the $21.6 million provisionally set aside for Nepal, $1.6 million will go toward oversight costs, leaving $20 million in potential assistance.

At its first extraordinary meeting, the Board agreed to pilot an approach under its existing Barbados Implementation Modalities that lets Nepal seek funding for a specific disaster outside the Fund's regular application window. The Board said the allocation was constrained by the Fund's available financial resources.

Nepal is the first beneficiary of the Fund, which has yet to disburse money to any country since its establishment in 2022.

Some board members at the 22 October meeting reportedly expressed reservations about the grant, saying it should not set a precedent for pending claims by other countries to the Fund.

Questioning the amount, Ali Tauqeer Sheikh, Pakistan’s representative on the FRLD Board, said at the Fund’s meeting, "I still have not understood the reason for $21.6 million."

The Board said it would "assess lessons" from Nepal's case for its long-term model. It stopped short of treating the exceptional decision as a permanent rapid-response mechanism.

According to Nepali Times, the grant is only 0.4% of what is needed to rebuild.

"We are yet to receive formal communication from the fund. Once it arrives, we will consult the relevant agencies and prepare a proposal," said Om Prakash Bhattarai, an undersecretary at the Climate Desk of the Ministry of Finance.

Maheshwor Dhakal, an alternate member of the Fund's board who heads the Climate Change Management Division at the Ministry of Forests and Environment, said, "The funds will be mobilized according to Nepal government’s priorities, with the aim of ensuring 100 percent reaches the local level."

Dharmaraj Upreti, chief executive of the National Disaster Risk Reduction and Management Authority, identified infrastructure, housing and early-warning systems as potential areas for investment.