The Loss and Damage Fund Opens Its First Call: $250 Million for 2025 and 2026, in Grants of $5 Million to $20 Million

The Fund for responding to Loss and Damage, created by agreement at COP27 in Sharm el-Sheikh in 2022 and operationalised at COP28 in Dubai, has launched its first call for funding requests. The call was announced at COP30 in Belém, Brazil, under what the fund calls the Barbados Implementation Modalities, a start-up phase named after the Barbados meeting of the fund's board at which the approach was agreed. According to the fund, $250 million has been allocated for 2025 and 2026 under the modalities.

The fund supports developing countries that are particularly vulnerable to the adverse effects of climate change in responding to economic and non-economic loss and damage. Unlike most climate finance, which supports mitigation, such as renewable energy, or adaptation, such as flood defences, loss and damage finance addresses harm that has already occurred or cannot be avoided by adaptation. Pledges to the fund since COP28 have totalled several hundred million dollars, from countries including the United Arab Emirates, Germany, France, Italy, the United Kingdom, Japan and others.

Pakistan suffered further severe floods during the 2025 monsoon, with the National Disaster Management Authority reporting 1,006 deaths by late September. Whether loss and damage funding is used for energy reconstruction will depend on country priorities and on the fund's criteria. Under the start-up modalities, requests come from developing country governments, which identify the loss and damage they want to address and the entities that will implement the response. The size range of $5 million to $20 million per request suggests the fund is aiming to spread its first allocation across a number of countries, rather than concentrating it in a few large grants.

The loss and damage fund is one part of the international climate finance architecture. The United States, which made a pledge to the fund under the previous administration, has since withdrawn from the Paris Agreement and rescinded its international climate finance plan. At COP30, negotiators discussed adaptation finance, the roadmap toward $1.3 trillion and other finance issues.