Inside the loss and damage fund’s first year — and what comes next

When Ibrahima Cheikh Diong took the helm of a new United Nations fund to help vulnerable nations cope with the worst effects of climate change last year, the institution existed mostly on paper. Within weeks of his appointment, Diong was on a plane to the Philippines, where the fund’s board is based, for his first board meeting — then to the U.N. Climate Change Conference, COP29, in Baku, Azerbaijan. “I was two weeks on,” recalled Diong, the former head of the African Union’s climate insurance agency, Africa Risk Capacity. “No staff, just by myself. I came to COP29 in Baku and realized right away that the expectations were so high.” It was, he admitted with a laugh, “a what-have-I-gotten-myself-into” moment. But it also marked a turning point. “Being in this role, you realize it’s bigger than all of us,” he told Devex. “It’s not about us — it’s about the countries we’re supporting.” One year later, at COP30 in Belém, Diong returned with a small but growing secretariat — and a fund that was finally operational. On Monday, the opening day of the summit, the Fund for Responding to Loss and Damage launched its first official call for proposals, a milestone toward getting resources to countries facing loss and damage from climate extremes, including wildfires, flooding, and lower-onset phenomena such as sea level rise. The fund launched with about $800 million in voluntary pledges from wealthier countries — far short of the hundreds of billions that low- and middle-income countries say they will ultimately need. “Over the years, during successive COPs, the issue of loss and damage was treated as something impossible, something that would never happen,” said Elizabeth Thompson, a member of the fund’s board, during the launch event. For years, richer nations balked at the idea, worried that a loss and damage fund would signal liability for their historically high greenhouse gas emissions and open the door to unbounded financial commitments. “To see it now becoming operational — it couldn’t have been imagined,” said Thompson, who is also Barbados' extraordinary ambassador responsible for climate change. The Barbados push That outcome was far from guaranteed. At a meeting in Barbados in April, board members and Executive Director Diong spent long hours negotiating the details of the fund’s first full-year operational work plan covering 2026, including which countries would be eligible and how much would be allocated to the initial work plan. “It was not easy,” Thompson said. “It came to the point that on the day before the meeting would end, we had no consensus, and I said to my colleagues on the board, I am now prepared to lock you in this room until you come to a decision.” “You cannot be too technical when people are actually dying.” --— Ibrahima Cheikh Diong, executive director, Fund for responding to Loss and Damage The tactics seemed to work: by the next day, they had an agreement. The result, known as the Barbados Implementation Modalities, or BIM, set aside $250 million in grant financing. Under BIM, low- and middle-income countries particularly vulnerable to climate change will be able to submit proposals during a six-month application window beginning in December. Funding is expected to start flowing before the end of 2026, said Diong, who has also held senior positions at the World Bank and the Senegalese government. In multilateral terms, this is all happening at lightspeed. But for communities already facing climate disasters, it’s still too slow. And the fund’s current approach, which requires countries’ national focal points to submit proposals under BIM, has drawn criticism from some members of civil society as being too government-centered. “As we sit in Belém, devastating climate impacts are hammering Jamaica and the Philippines. They need help now,” said climate activist Harjeet Singh. “Yet this 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.” The fund does have plans in the future to open up funding to civil society groups via smaller grants, Diong said. The decision to establish a loss and damage fund at COP27 in Sharm el Sheikh, Egypt, was widely seen as one of the biggest achievements of that year’s gathering. A year later, at COP28 in Dubai, countries negotiated how to make it a reality. The Fund for Responding to Loss and Damage was created to channel support to vulnerable nations already bearing the brunt of climate change impacts. But that $800 million in early pledges will need to multiply several times over if the fund is to make a dent in financing the effects of climate disasters. After all, between 2000 and 2019, the world suffered $2.8 trillion in loss and damage from climate change — around $16 million every hour, according to a 2023 analysis from Nature. Now, as Diong looks ahead, the focus turns to what comes next: building out the fund’s secretariat, securing long-term resources, and navigating the geopolitical realities that will shape its future. Nuts and bolts So how exactly does the fund work? Its 26-member board is drawn from countries that agreed to the 2015 Paris climate agreement —12 from high-income nations and 14 from low- and middle-income ones — with members serving three-year terms. While two countries offered to host the legal entity that houses the board, the Philippines was ultimately selected. The secretariat itself, however, operates out of the World Bank in Washington, D.C., under the bank’s financial intermediary funds system — independently governed funds that receive administrative and fiduciary support from the bank, such as the Adaptation Fund and the Global Agriculture and Food Security Program. In practice, that means the secretariat is in D.C., while the board convenes in the Philippines at least twice a year. For now, the secretariat is a small team of nine people organized into five departments: programming and country engagement; governance and board affairs; finance and budget; monitoring and evaluation; and resource mobilization, partnerships, and communications. “Our intention is to have a secretariat of about 25 or 26 people,” Diong said, noting that the board has approved funding to recruit the remaining staff by the end of 2026. “Our intention is to be lean and mean, so we don't spend all the money on overhead — we spend the money on the countries.” “These fundamentals are an experiment for the first four years,” he added. “We’re basically building the plane as we fly. But the reality is we’re getting a sense of urgency — the needs of the country. We can’t afford to wait and say we’re going to get everything perfect.” ‘Our doors are now open’ Getting this all off the ground was, as board cochair Richard Sherman put it, an example of “operationalizing global solidarity.” A major piece of that is ensuring the process stays country-led and demand-driven rather than supply-driven. Diong said low- and middle-income country governments will determine what to bring forward, and the fund will ensure that the requests fit within their national strategies, and don’t duplicate other funding already flowing to them. All LMICs are eligible to apply, though the fund intends to prioritize countries most at risk. “For example, the SIDS and LDCs — we’re allocating 50% of the money for them because they’re most vulnerable,” he said. Starting next month, countries can begin submitting project proposals once the window opens, using the template and terms of reference posted online. Funding will be disbursed as grants — a deliberate decision, Diong noted, to make support more accessible and equitable. “Countries made it very clear at this stage that we want this to be grant only,” he said. “You don’t have to borrow money to fix the problem you’re not responsible for.” The level of pent-up demand was evident: “Country representatives have been knocking on our doors,” Sherman said. “Hopefully our doors are now open.” More than a drop in the ocean? Outside observers have not been shy about pointing out the scale problem. “We welcome the FRLD’s call for proposals — but $250M is a drop in the ocean,” the Loss and Damage Youth Coalition said on X this week. “Frontline communities need hundreds of billions, not millions, to recover with dignity.” Inside the fund, no one disputes that. At the launch event Monday, Thompson issued a familiar plea: “Fill the fund.” All contributions are voluntary. As of June 2025, pledges totaled about $788 million, with France as the largest contributor at $111 million and Germany close behind at $98 million. The United States’ withdrawal from the fund in 2025 just after President Donald Trump took office — after having pledged $17.5 million — was symbolically significant but financially limited. Diong’s response to concerns about U.S. disengagement was measured. “We don't want anybody leaving the fund but this fund is not against one country. It's for the countries we're trying to support,” he said. “You have 28 contributors. Yes, one left — but 27 have stayed. And that's the story, in my view, that's important.” But the fund will not reach the scale countries need without new sources of predictable finance. According to Diong, the board’s long-term resource mobilization strategy will consider it all: “Grants are one thing but at the same time, what is out there? There's philanthropy. There are levies. There is other funding that we can mobilize. And I think the board wants to look at all those options and say … what is that we can rely on to mobilize the billions that the fund requires?” FRLD will unveil a new resource mobilization strategy before its next replenishment in 2027, Diong said. As for bringing in the private sector, Diong is holding off for now. “I can see a role of the private sector in this,” as product offerings grow, he said. Discussions are also underway about whether private-sector representatives should someday join civil society as observers at board meetings. The next two years will set the fund’s trajectory, and other climate funds are helping smooth the path. As Diong put it, “all the other climate funds are helping us … you're the new kid on the block, how can we help you to make sure you don't repeat the same mistake that we made.” But even as FRLD grows, its remit is only one part of a much larger ecosystem of tools that countries need to face climate change. Insurance, contingency finance, early-warning systems, long-term recovery support — all of these have to work in concert if countries are to withstand both rapid disasters and slow-onset climate impacts. Diong learned this firsthand in his previous role leading African Risk Capacity, where he watched climate disasters unfold that triggered none of the finance mechanisms countries had paid for. In Zambia, for example, El Niño-driven losses failed to activate an insurance payout despite obvious hardship on the ground. The lesson stayed with him: Countries need a mix of instruments, and rigid thresholds do not always match reality on the ground. As he put it, “You cannot be too technical when people are actually dying.”