Loss and Damage Fund approves $20 million grant for Nepal’s flood recovery

Kathmandu, October 23

The Loss and Damage Fund, established to address climate-related losses and damages, has approved a $20 million grant for Nepal to support relief, rehabilitation and reconstruction in communities affected by devastating floods in the Bhotekoshi and Trishuli river basins.

The Ministry of Agriculture, Forests and Environment announced the decision in a statement on Thursday, saying the funding would support families and communities affected by the floods that struck on August 26.

The disaster has claimed more than 1,500 lives, while over 5,000 people remain missing, according to the ministry. More than 60,000 people from approximately 15,000 households have been directly affected.

Preliminary estimates put the economic damage caused by the floods at around $2.7 billion, equivalent to Rs 407.7 billion. Reconstruction costs are estimated at approximately $4.7 billion, or Rs 709.7 billion.

Nepal’s request receives international backing

To accelerate assistance to flood-affected communities, Finance Minister Dr Swarnim Wagle and Agriculture Minister Geeta Chaudhary made a special appeal to the fund’s board on August 31.

Following the request, formal and informal discussions took place in several rounds among board members representing developed and developing countries, least developed countries, small island developing states, and regional groups from Asia-Pacific, Africa, Latin America and Western countries.

A special board meeting held on October 22 finalised the decision to provide assistance to Nepal, said Dr Maheshwar Dhakal, joint secretary at the ministry.

Dhakal, who also serves as the ministry’s spokesperson, coordinated Nepal’s engagement with the fund and facilitated the process.

Nepal will now prepare and submit a proposal to the fund under the Barbados Implementation Modalities process to access the approved financing.

The ministry also announced that the fund’s 11th board meeting will be held in Kathmandu from March 17 to 19, 2027.

Historic step for climate finance

Dhakal, Nepal’s national focal point to the fund and an alternate board member, described the grant approval as a landmark development in the country’s efforts to secure international climate finance.

“There could hardly be a more important and historic decision in Nepal’s climate finance history,” he said, adding that the approval also marked a new chapter in the history of the Loss and Damage Fund itself.

He welcomed the international community’s decision to prioritise the severe human and economic losses caused by flooding in the Bhotekoshi and Trishuli river basins.

The grant is expected to contribute to recovery efforts in affected communities, although Nepal must complete the proposal process before the funds can be disbursed.

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