‘We cannot accept another slow, bureaucratic climate fund’

A call for proposals has been issued for the Barbados Implementation Modalities (BIM), the pilot phase of the Fund for Responding to Loss and Damage (FRLD), at 30th Conference of Parties (COP30) to the United Nations Framework Convention on Climate Change in Belém, Brazil.

Established at COP27 in Sharm el-Sheikh in 2022, the fund is still being operationalised, with its board meeting every few months. Despite seven board meetings so far, civil society observers say they are dissatisfied with both the pace and the direction of progress. Down To Earth spoke to Lidy Nacpil, coordinator of the regional network Asian Peoples’ Movement on Debt and Development (APMDD), about the BIM launch and the future of the FRLD.

Akshit Sangomla (AS): The Philippines was hit by two typhoons in early November. In the same week, the call for proposals under the BIM, the start-up phase of the FRLD, was launched. How significant is this for the Philippines and other developing countries?

Lidy Nacpil (LN): The fact that we now have a loss and damage fund and that its pilot phase is being launched is important for the Philippines and for many countries extremely vulnerable to climate impacts. But those of us engaging closely with the FRLD are really disappointed.

First, the amounts under discussion are extremely, ridiculously low. When the FRLD was set up, developed countries made initial pledges, but these were tiny compared with the scale of needs. Today, total pledges amount to less than $800 million, and actual delivered finance is only a little over $300 million. For the pilot programme, they are speaking of just $250 million being available.

For a middle-sized country hit by a major typhoon, this is nowhere near enough. And this pool is supposed to cover all developing countries. Half of the amount is to be reserved for the most vulnerable groups, the Least Developed Countries (LDCs) and Small Island Developing States (SIDS). The Philippines does not fall under those categories, even though we are a nation of many small islands and so, are highly vulnerable.

We are also disappointed with decisions made about the operational modalities during the board meeting in Manila in July 2025. The main modality chosen is a standard project-proposal process: countries submit proposals, which are then processed and eventually approved. This can take several months at best. That is not what we need from a loss and damage fund.

Countries experiencing climate-related disasters need rapid response. Some loss and damage such as from slow-onset impacts can be anticipated. But most of what we are facing now requires immediate support. We pushed hard for rapid response to be the main modality. Several board members agreed, but the board still adopted the slower, project-based approach. Even if they manage to shorten approval times to three months, that is still far too long for loss and damage.

So we are dealing with too little money and the wrong modality. And it is frustrating because this is a fund civil society fought for over many years. Without that fight, there would be no FRLD. Yet what we are getting is not really useful.

Still, we are not giving up. We have launched the “Fill the Fund” campaign, and we will continue pushing for a real rapid-response modality. BIM is only a pilot, and we do not want it setting the precedent for how the fund will operate in the long term.

AS: Are there positive signs at COP30 for filling the fund? Have any new pledges come in or discussions taken place?

LN: It is too early to tell. We hope to step up the pressure in the coming days and trigger some response. This does not require multilateral negotiations, wealthy countries can unilaterally decide to pledge and deliver more.

We are using the COP space not to secure a negotiated outcome on loss and damage, but to send strong political messages to rich governments: Do your job, face your responsibilities. Whether it is a single announcement from one country or a bilateral conversation, we want movement — but I am not very optimistic. It may take months of sustained pressure before they respond. This is not the first time we are raising these concerns.

We are also urging governments of the Global South to “stiffen their spines”, be firm and have more political will to speak loudly and strongly about what our people need. A lot of geopolitics and power dynamics are at play here. Many hesitate to speak strongly because they rely on rich countries for aid, loans or investment, and do not want to “rock the boat” too much. So we must pressure our Global South governments too.

AS: The World Bank is involved in meetings of the FRLD. How are you working to ensure the debt burden of vulnerable countries does not worsen?

LN: This is one of the central problems in climate finance. There is too little finance, and what little exists mostly comes as loans. That contradicts the principle of climate finance. Climate finance is an obligation of rich countries acknowledging their historical responsibility. It is not aid, not charity and it certainly should not be loans that we must repay.

I am not saying loans should be abolished entirely. But loans should not be counted as climate finance, especially not for adaptation and loss and damage. Loans are the wrong instrument entirely for these areas. Governments should not be borrowing for adaptation or loss and damage. How would they generate revenue to repay? It would penalise our people several times over.

Perhaps in the case of renewable energy systems, loans might seem justifiable because the electricity generated can be sold and not given away for free. 

We have been campaigning for a long time against the idea that loans constitute climate finance. We have argued this within the Green Climate Fund (GCF) and now within the Fund for Responding to Loss and Damage (FRLD). We do get into these debates about financial instruments, risk registries and investment modalities for these funds.

AS: How satisfied are you with the board’s progress? When do you expect a fully operational FRLD?

LN: We are deeply disappointed. We are not happy at all with the progress so far, particularly with some of the major decisions taken. There is a great deal the current board could do to democratise the FRLD’s processes. This concerns not only civil society participation but also ensuring genuine country ownership.

One of the first operational decisions was on who can access the fund; the accreditation issue. The board opted for the quickest route: Automatic accreditation of all entities already accredited under the GCF, the Asian Development Bank, the United Nations Development Programme and the World Bank. These institutions are majorly international financial bodies and large private banks. Most are not national or local entities from the Global South.

What we are heading towards is a repetition of an already unjust situation, where international public and private institutions enjoy greater access. A significant portion of the money will inevitably go towards the administrative costs of these international bodies. Meanwhile, those who are actually facing climate losses on the ground will have very limited influence over the design and implementation of projects.

We will not have much influence over decisions regarding the design and implementation of projects and programmes on the ground. Although the GCF has a policy to strengthen direct access for national entities in the Global South, progress so far has been incremental. 

It is not impossible for government agencies or community groups to secure direct access, but achieving this will require more substantial changes in how policies are formulated and applied. These changes must ensure that communities are treated as principal recipients of FRLD funding, rather than secondary beneficiaries.