Nepal isn’t the only disaster-struck country waiting for money from the global climate Loss and Damage Fund

In August 2026, Nepal experienced a catastrophic flood triggered by the collapse of a glacier in the Himalayas. The disaster killed over 1,400 people, destroyed riverside communities, and damaged more than a dozen hydropower dams, cutting off about 10% of Nepal’s electricity. The flood was described as a 'Himalayan tsunami' by Nepal’s Foreign Minister Shisir Khanal, who linked it directly to climate change caused by global greenhouse gas emissions. Nepal, which contributes minimally to climate change, is now seeking compensation from the global Loss and Damage Fund to help cover the estimated $4 billion to $5 billion needed for recovery, nearly 10% of the country’s national economy.

The Loss and Damage Fund was established during the 2022 U.N. climate conference to provide financial support to developing countries affected by climate change disasters. It aims to compensate nations for losses and damages caused by climate impacts, such as floods, storms, or rising sea levels, which they did not cause. The fund operates on a voluntary contribution basis, meaning wealthy countries are not legally obligated to donate. As of June 2026, the fund has received pledges totaling $820 million, but only about $250 million to $300 million has been delivered. The U.S. withdrew its support in 2025. Despite requests from at least 119 countries totaling $2.8 billion, the fund has not yet disbursed any money.

Global temperatures have risen significantly due to greenhouse gas emissions, primarily from burning fossil fuels. This warming has accelerated the melting of glaciers and ice sheets worldwide. In the Himalayas and Hindu Kush mountains, glaciers are losing ice at double the rate since 2000, destabilizing slopes and creating glacial lakes prone to sudden outburst floods. The U.N. Environment Program reported in September 2026 that the planet is now on track to warm by at least 1.5 degrees Celsius above pre-industrial levels, a threshold set by the Paris climate agreement to avoid severe climate impacts. Nepal’s flood is a direct consequence of these changes.

Nepal has requested $20 million from the Loss and Damage Fund to assist with recovery efforts. This amount is far below the $4 billion to $5 billion the country estimates it needs to fully rebuild infrastructure, restore hydropower capacity, and support affected communities. The request is symbolic, representing Nepal’s demand for justice and accountability from major greenhouse gas emitters. The fund’s board has not yet approved any disbursements, despite urgent appeals, including an emergency meeting request in September 2026. The board’s next meeting is scheduled for December 2026, but no timeline for action has been confirmed.

The Loss and Damage Fund is designed to distinguish climate compensation from traditional humanitarian aid or charity. Vulnerable countries, like Nepal, argue that funding from the Loss and Damage Fund acknowledges their right to compensation for harm caused by climate change, not as a form of charity. However, wealthy nations have resisted labeling contributions as liability or responsibility for climate damages. The fund’s establishment avoids assigning legal blame, as contributions are voluntary. If the fund disburses money to Nepal, it would set a precedent for future claims, potentially influencing international climate justice efforts.

The Loss and Damage Fund has faced criticism for its slow progress. Despite receiving requests from 119 countries totaling $2.8 billion, the fund has not yet approved any disbursements. Analysts suggest that delays may be intentional, as wealthy nations avoid taking on legal or financial responsibility for climate damages. The fund’s board, responsible for approving requests, has only considered four funding proposals as of June 2026, none of which were approved. The board is under pressure to act quickly, especially after Nepal’s disaster, but no clear timeline for disbursements has been established.