A United Nations fund set up to help vulnerable nations cope with climate‑related disasters is facing a major financing crunch, with a US$2.8 billion gap between current resources and funding requests as its board meets in Manila, Philippines this week.
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The Fund for Responding to Loss and Damage (FRLD), headquartered in the typhoon‑prone Philippines, began accepting applications on 15 December last year under its Barbados Implementation Modalities (BIM) pilot phase.
The scheme offers grants of US$5 million to US$20 million for developing‑country projects, with governments also able to seek direct budget support for emergency measures such as temporary housing for displaced people after extreme events.
The start‑up phase, formally branded the BIM in recognition of the host of the earlier board meeting, had originally aimed to disburse funds by end‑June 2026. That target has slipped to the end of the year because of the high volume of requests and the need to finalise procedures for project screening and approval.
The FRLD, created under the United Nations Framework Convention on Climate Change (UNFCCC) at COP28 as a dedicated loss and damage finance mechanism, currently has just US$250 million available for this initial round, underscoring how far existing resources fall short of rising needs as climate impacts intensify.
Average demand per application was US$15.9 million, with Asia Pacific requesting the second‑largest share. Image: FRLD
As the ninth FRLD board meeting, held from 8 to 10 July at the Asian Development Bank headquarters, co-chair Richard Sherman of South Africa said the BIM funding call, open from December 2025 to June 2026, drew roughly US$2 to 3 billion in requests.
Average demand per application was US$15.9 million, with Africa accounting for the largest share (US$1.4 billion across 81 requests), followed by Asia Pacific (US$751.1 million, 49 requests), Latin America and the Caribbean (US$611.6 million, 42 requests), and Eastern Europe (US$54.3 million, 4 requests).
The board is set to consider the first four funding proposals, from Haiti, Nigeria, Jamaica and Côte d’Ivoire, which together amount to US$77.4 million, nearly one-third of the BIM start‑up allocation.
Richard Sherman, FRLD co-chair representing South Africa, said in a press briefing ahead of the opening of the meeting that the board will discuss a resource mobilisation strategy to “fully address the needs of developing countries” and convert pledges made at COP28 in Dubai into binding agreements, allowing money to flow to approved projects.
Campaigners warn that without new pledges, the FRLD could run out of money by 2027. They are calling for the first replenishment to target at least US$50 billion a year between 2027 and 2031, in new, additional, public and grant‑based finance from wealthy, high‑emitting nations, ramping up to at least US$400 billion annually by 2035.
Sherman said the board will also examine how to scale support beyond the current envelope of around US$20 million per project, strengthen technical assistance for project preparation, and advance long‑pending policies on observer participation and accountability to UNFCCC bodies.
Civil society groups, meanwhile, said that the FRLD must establish mechanisms for direct budgetary support to developing countries and a dedicated funding stream for direct community access, so resources can reach frontline communities, civil society and Indigenous Peoples quickly and with national ownership.
