Cash only: how the loss and damage UN fund will pay countries

By Ivan Couronne
Belem, Brazil (AFP) Nov 11, 2025

A hard-won UN "loss and damage" fund to help vulnerable countries recover from the devastating impacts of climate change is finally about to come to life after years of tough negotiations.

The mechanism was agreed at the COP27 conference in Egypt in 2022 after wealthy countries finally caved to years of pressure from developing nations.

The fund launched its first call for project proposals on Monday at COP30 in Belem, Brazil.

The initial package totals $250 million, with grants expected to be disbursed from mid-2026.

Eligible countries will be able to apply for between $5 million and $20 million per project.

The mechanism provides only grants, not loans, to help address the harm caused by storms, floods, droughts and rising sea levels.

Vulnerable countries hailed the fund's creation as recognition of the historical responsibility of wealthy nations for global warming, although contributions remain voluntary.

But activist Harjeet Singh, founding director of the Satat Sampada Climate Foundation, said the fund is starting with "a fraction of the scale required."

"It has no genuine access for frontline communities, and it has completely failed to function as a rapid response mechanism," he said.

Speaking to AFP in Belem, the fund's co-chair, French official Jean-Christophe Donnellier, said it cannot yet offer near-immediate support in the first 24 to 48 hours following a disaster, as some NGOs have urged.

However, he stressed that the facility will fill a critical gap in existing climate finance by supporting longer-term recovery and reconstruction in communities hit hardest by climate-related losses.

QUESTION: Why can't the fund immediately assist countries like Jamaica that have just been ravaged by a hurricane?

ANSWER: "We are not going to provide humanitarian response; this is clear in our statutes. There are entities that do this very well. We want to be in the next phase: maintaining activity, sustaining populations, organizing necessary population relocations to cope with climatic events, whether violent or slow, launching reconstruction programs."

QUESTION: Do you want to one day be able to respond quickly to these disasters?

ANSWER: "We're no longer talking about 24 hours, but perhaps 15 days. The only way to do this effectively, intelligently, understandably, and truly meeting the need is to prepare in advance. This is what we call pre-arranged financing. This means we have planned in advance what we will disburse, and that, we can do very quickly."

QUESTION: What types of projects is the fund specifically looking to finance?

ANSWER: "It could be pre-arranged financing or immediate operations, if coastal borders need reinforcement or transportation routes need elevation. ... It could also be packages of $100 million where we contribute our $20 million in cash."

QUESTION: How significant is the risk of corruption in project selection? And do you think this risk is underestimated by your critics?

ANSWER: "Developed countries are willing to give money, and citizens of developed countries are willing to give money, but only if they are sure it won't be misused either locally or internationally. There are many issues related to terrorism financing, money laundering, etc. We can no longer tolerate as much as we have in the past. Our citizens wouldn't accept it. They are right, and this is a perspective NGOs need to develop, and some have. ... But some tend to want to pit the good guys against the bad guys. This is a tragic mistake."

QUESTION: The fund has received $790 million in pledged contributions from countries, mainly European nations. Will China ever contribute to the fund?

ANSWER: "I am almost certain that China will contribute one day. I'm not saying it will be this year, but I am almost sure they will do it."