UN loss and damage fund earmarks money for Nepal after August floods
It is the first time the climate fund has set aside money for one country, but the sum is a tiny share of Nepal's estimated losses.
Nepal has been provisionally allocated US$21.6 million by the Loss and Damage Fund under the United Nations climate convention to help it recover from the Bhotekoshi floods in August, The Hindu reported.
According to the newspaper, the Fund had never before earmarked money for one country to repair harm caused by climate change. Its Board agreed the allocation at an extraordinary meeting on Thursday, October 22.
The disaster began on August 26. An ice-and-rock avalanche, which The Hindu attributes to climate change, sent debris and floodwater down the Bhotekoshi-Trishuli-Narayani river system.
The sum covers only a sliver of what Nepal says it has lost. Its own assessment puts economic losses at $5 billion, and the government estimates it will need at least $4.71 billion for initial recovery and reconstruction. Of the $21.6 million, $1.6 million goes to oversight fees. The Fund pays these to the bodies that run its projects, which can be UN agencies, multilateral banks or national institutions.
Nepal made its request on August 31. In a letter to the Board's co-chairs, Finance Minister Swarnim Wagle and Gita Chaudhary, the Minister for Agriculture, Forests and Environment, urged it to "take a special decision to respond rapidly, directly and effectively". They wrote that Nepal, a least developed country, adds almost nothing to global emissions while suffering worsening climate effects. Board members representing Africa, the Asia-Pacific and least developed countries then asked for the extraordinary session, and members from other regions, developed countries among them, sent letters backing it.
The Fund was created at COP27 in 2022 to assist developing countries exposed to climate change in dealing with economic and non-economic losses. Pledges from countries, mainly developed nations, exceed $820 million, of which $342 million is meant for the start-up phase. Demand is far higher: 119 countries have lodged 176 requests seeking roughly $2.8 billion.
The Hindu said it could not immediately obtain an official figure for the cash the Fund holds. Whether Nepal is paid depends on donors delivering their pledged money on time, the newspaper said.
Ajay Mathur, a former Director General of the International Solar Alliance, described the allocation as a "landmark operational step". He pointed out that it came to under 0.5 per cent of Nepal's estimated reconstruction bill. He said the money would flow only once Nepal had cleared further project proposals, which he warned could hold up relief, and suggested the Fund release its support straight away.
The 31st UN climate conference, COP31, is due to open in Turkey next month.
This report is based on reporting by The Hindu: UN climate damages fund earmarks $20 million to Nepal for August disaster.
