The establishment of the Fund for Responding to Loss & Damage (FrLD) was established at COP27 in November 2022. It was initially set up for a period of four years. A decision on whether the FrLD will be converted into a permanent fund will be taken at COP33 in late 2028.
Objectives and modalities
The aim of the FrLD is to support particularly vulnerable countries in addressing economic and non-economic loss and damage caused by the impacts of climate change. This includes costs for restoration, rehabilitation and reconstruction during and after disasters, covering costs arising from slow-onset effects of climate change, and the development of preparedness plans. The fund aims to fill gaps not covered by other, existing financing options. It is also important that the priorities are to be defined by the countries themselves in a country-led approach.
In its governance structure, a secretariat was established in 2024 to manage the fund’s operations; it is based at the World Bank. The fund is governed by a Board based in the Philippines. Of its 26 members, 12 seats are allocated to industrialised countries and 14 to developing countries. Germany holds one seat and is represented by the BMZ. In 2026, Norway and the Dominican Republic serve as co-chairs.
Funding from the FrLD is open to all developing countries that are particularly affected by climate change and have ratified the United Nations Framework Convention on Climate Change (UNFCCC). It is therefore not limited to countries eligible for Official Development Assistance (ODA). The Fund uses the Barbados Implementation Modalities (BIM) to regulate its financing arrangements. An initial allocation of 250 million US dollars was originally earmarked for this purpose, which has since been increased to 342 million US dollars. At least half of this is to be reserved for the Least Developed Countries (LDCs) and Small Island Developing States (SIDS). Initially, the FrLD will primarily provide grants and highly concessional loans. In future, this may be supplemented by other financing instruments.
The Fund provides for several options to access funding. National governments can either receive direct budget support through direct access or collaborate with institutions accredited by the Adaptation Fund (AF), the Green Climate Fund (GCF) or the Global Environment Facility (GEF), as well as other multilateral development banks (MDBs) and international financial institutions (IFIs). In addition, arrangements are to be developed to facilitate access for local and indigenous communities, as well as rapid disbursement mechanisms in the event of a disaster.
Current developments
The first call for funding applications will run from December 2025 to June 2026. The first funding decisions are expected to be made in December 2026. A replenishment of the FrLD is planned for 2027, which is currently still in the preparatory phase.
Funding volume and Germany’s contribution
By March 2026, the FrLD received pledges totalling approximately 820 million US dollars, although 218 million of this has not been backed up through binding contracts. The 27 donors include the United Arab Emirates (UAE), France, the UK and Spain, the European Union (EU) as a supranational organisation, and the Wallonia region as a subnational actor.
Germany, alongside the UAE, is the largest donor to the FrLD. At COP28, Germany pledged US$100 million from the BMZ budget for the start-up phase which has been fully disbursed. However, Germany has so far earmarked only 150 million euros for the first formal replenishment of the fund from 2027 onwards. (as of October 2026)
Further information on the FRLD:
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