Is 9th Board meeting ‘make-or-break’ for L&D Fund?

The 8th Board meeting (B8) of the Fund for Responding to Loss and Damage (FRLD or the Fund) held last April was the first meeting since the launch of its pilot funding program at COP30. This program, the Barbados Implementation Modalities (BIM), aims to give USD250 million of grants to developing countries to enable them to address climate-related losses and damages.

After three days of the meeting, the outcomes produced were modest at best. 

Among the most notable decisions is the adoption of a country support system, which would give an additional USD7.5 million for 30 countries a year for capacity-building in accessing the Fund. Another is the adoption of the framework for operationalizing direct budget support that will enable national governments to directly access resources under the BIM.

However, critical aspects of BIM operationalization remain undecided – namely, the results management framework for assessing if projects effectively and transparently use their allotted funds, and the assessment methodology for all proposals. 

With less than two months before the deadline for BIM proposal submissions, the pressure is on the Board and Secretariat to finish the BIM puzzle and make it fully operational. It also makes B9 on 8-10 July in the Philippines a defining moment for the Fund, with critical issues to be decided on.

On BIM 

It is expected that the first round of approved proposals will be announced at B9. As of B8, there were 10 country submissions totaling nearly USD166 million in the pipeline, with most of the proposals from Least Developed Countries and Small Island Developing States. These numbers are expected to increase as the deadline draws closer.

However, several issues must be addressed regarding the conduct of the pilot program. As both the assessment methodology and the results management framework are not yet adopted and will be decided around the time of B9, the BIM risks being run with a fragmented approach across its various phases. It could also lead to country-level resources and capacities being wasted on revisions without clear metrics in place and delayed disbursements.

Another challenge is on the capacity of the Secretariat in managing and evaluating an expected high volume of BIM proposals in such a short period of time and providing support to developing countries under country support systems, whose call for proposals will also happen at B9. While an independent and expanded Secretariat is already in place, their capacity will be tested in the next few weeks amidst growing demand for assistance from developing countries.

On stakeholder engagement

Another critical agenda at B9 is on finalizing policies on non-Party-stakeholder engagement. These are centered on two separate policies: on engagement with Active Observers, and on consultative forums and other engagement modalities.

In recent months, representatives of the nine UNFCCC Observer constituencies – including Indigenous Peoples, women, and children and youth – and the Secretariat have been engaging in consultations about the development of these policies. They also have been sitting in Board meetings, delivering interventions and bringing voices of the most vulnerable communities to formal discourse.

Several challenges under this agenda must also be resolved by the time of B9. Among these are: defining and conducting the “co-convening” broader stakeholder consultations by the Secretariat and Observers, per decision in B6 last year; and getting groups outside of UNFCCC Observer constituencies involved in this process, especially with the Fund’s current limited current.

Outside of these two draft policies, ensuring that “bottom-up” approaches, which is one of the criteria for BIM projects, are genuinely implemented is also a critical indicator of whether vulnerable communities directly benefit from the Fund. Observers have been advocating to strengthen the BIM’s monitoring process by institutionalizing community-led tracking and reporting of projects.  

Long-term future

Yet the most notable call from civil society groups directly ties to another major agenda of B9: the long-term resource mobilization for the FRLD. As of B8, more than USD822 million has been pledged by developed countries, which is way off the USD400 billion being called by said groups to properly meet the needs of vulnerable countries and communities.

And not all of the current pledges are even readily-disbursable. At B8, FRLD Executive Director Ibrahima Diong stated that without further contributions, it could exhaust its capital by 2027. This makes the agenda on long-term resource mobilization and preparing arrangements for the first replenishment cycle even more critical.

It must be mentioned that the current USA leadership is also pressuring the World Bank, the Fund’s interim Trustee, to scrap all climate-related endeavors as early as this June. This casts even more concern about its future, especially on the BIM.

On a more positive note, two modalities being called for by developing countries and civil society groups will be discussed in the next meeting. Modalities for rapid disbursement, especially during times of climate-related disasters, and small grants that could potentially be directly accessible by communities would bring the Fund closer to what many believe it is intended to be.

For any climate finance mechanism in its early years, the next meeting is expected to be more important than the last. But given this loaded agenda for B9, it is fair to wonder if this marks a “make-or-break” moment for the FRLD in terms of its credibility as a mechanism that fills in the gaps of the global climate financing landscape.   

But as one Board member said in Livingston, we need to trust the Secretariat to do its duties. To add, we also need to expect the Board itself to make urgent yet diligent decisions. We need to demand developed countries and fossil fuel corporations to pay up to the Fund.

The decisions to be made in July could make, to paraphrase a famous quote, a few small steps for the BIM and one giant leap for the future of the Fund.

illuminem Voices is a democratic space presenting the thoughts of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

Track the real‑world impact behind the sustainability headlines. illuminem’s Data Hub™ offers transparent performance data and climate targets of companies driving the transition.