Nepal has become the first country to receive an emergency allocation from the United Nations’ climate loss and damage fund after deadly flash floods devastated parts of the Himalayan nation, The Independent reports.
The fund’s board agreed on Thursday to set aside $20 million for Nepal, marking the first time the Fund for Responding to Loss and Damage (FRLD) has activated its emergency procedures to respond to a specific climate disaster.
However, the allocation represents less than 1% of Nepal’s estimated $4.7 billion reconstruction bill following the August disaster, which caused widespread destruction and left thousands of people missing.
Nepal’s government confirmed the allocation on Thursday, with its Ministry of Agriculture, Forests and Environment saying the funding would help address severe damage caused by climate-related disasters.
The country must still submit a funding proposal under the fund’s Barbados Implementation Modalities and complete the required approval process before the money can be disbursed.
The $20 million allocation is currently the maximum amount the fund can provide for a single disaster under its initial funding arrangements.
The disaster began on August 26, when part of a mountain collapsed near Nepal’s border with China’s Tibet region, triggering devastating flooding. About 1,500 people were reported killed, while more than 5,000 remained missing, according to the report.
The disaster affected around 60,000 people from 15,000 families and caused extensive damage to roads, bridges, schools and 13 hydropower plants.
Official estimates put the losses at approximately $2.7 billion, while the broader reconstruction bill has been estimated at more than $4.7 billion.
Nepal submitted its request to the loss and damage fund in August, less than a week after the disaster.
Maheshwar Dhakal, a senior official at Nepal’s climate and environment ministry, acknowledged that the allocation was small compared with the scale of the destruction.
However, he told the Associated Press that the decision sent an important message about international support for countries vulnerable to climate change.
By the end of September, Nepal had received around $102 million from domestic and international donors and was working with India, China and multilateral development banks to secure additional assistance.
The fund’s emergency procedures are designed to accelerate assistance, potentially reducing the process from six to eight months under normal rules to six to eight weeks.
The board was not scheduled to meet until December but convened its first extraordinary meeting after eight developing-country members requested an urgent session.
The fund currently holds $822 million in pledges, but only around $350 million is earmarked for disbursement. It faces 180 applications from developing countries seeking a combined $2.8 billion, according to The Independent.
The board is expected to consider additional funding requests at its next meeting in December.
Harjeet Singh, global convenor of the Fill the Fund campaign, described the decision as historic but warned against treating it as an isolated response.
He said Nepal’s experience highlighted the gap between the scale of climate-related losses and the financial assistance available to vulnerable countries.
“Nepal needs billions to rebuild, and this fund is responding only in millions,” he said.
Singh also criticised the delays involved in securing emergency assistance, arguing that countries facing climate disasters should not have to endure prolonged procedures to access support.
Climate campaigners have warned that countries suffering the consequences of global warming often have to rely on loans to finance recovery, adding to their debt burdens.
Arnab Chaudhary of Nepal’s Aalawya Foundation said Nepal was investing in climate adaptation, mitigation and resilience but remained heavily dependent on external financing.
He said the country received $6 in loans for every $1 it received as a grant, arguing that debt repayments could divert resources from healthcare, education and livelihoods.
Nepal’s Prime Minister Balendra Shah raised the issue at the United Nations General Assembly in September, saying his country was paying a heavy price for a crisis it did not create.
A World Weather Attribution analysis published that month found that rising temperatures had thinned regional glaciers and thawed frozen ground that helps hold mountain rock together, weakening the slope that collapsed.
Dikshya Subedi, founder of the youth group Youth Action For Sustainable and Eco Nepal, said communities in the affected Rasuwa and Nuwakot regions continued to face severe hardship.
She said homes had been washed away, villages remained buried under mud and many residents lacked the support needed to rebuild.
The funding decision comes ahead of the next United Nations climate talks, scheduled to begin in Turkey next month, where climate finance for countries affected by disasters is expected to be a major issue.
Savio Carvalho, head of campaigns and networks at 350.org, called on wealthy nations to deliver greater financial support at the talks, as development assistance budgets have come under pressure.
The Organisation for Economic Co-operation and Development reported a 23% fall in official development assistance from major donors in 2025, according to The Independent.