The 5th meeting of the Board of the Fund for Responding to Loss and Damage (FRLD) convenes on April 8th in Barbados for its fifth session. This meeting is pivotal as it aims to bring greater clarity to the trajectory of the fund. In the lead-up to this meeting, a proposal for a start-up phase was shared for delegates to consult as it will be one of the key agenda to this 5th board meeting. Decisions made during this meeting will respond to critical questions regarding the full operationalisation of the fund, but will also set the tone for its long-term direction. We acknowledge the significant progress achieved from B.1 to B.4 in advancing the Fund’s operational framework and welcome the board’s commitment to disburse funds swiftly. We remain fully mobilized to ensure that the decisions made in B.5 reflect the priorities and ambitions of the vulnerable communities, which this Fund is designed to serve.
Ahead of B.4, we shared key messages as a coalition delineating our expectations. This was shared in the context of a disappointing outcome of COP29 where climate finance decisions fell woefully short of expectations. B.4 was a good starting point to show clear ambition for the fund. Among our expectations, were: the fund has to be disbursed in early 2025, pledges have to be turned into contributions, and the board follows a bottom-up country-led approach for the disbursement of the fund to be inclusive, equitable, and respond to the needs of each country.
Similarly, the Loss and Damage Youth Coalition (LDYC) shared key learning points from the Loss and Damage Youth grant-making council on access modalities which could serve as a strong foundation for reflections on the operationalisation of the Fund for Responding to Loss and Damage. Among other details, we raised the Board’s attention to heavy administrative requirements, misplacement of funding priorities, and rigid processes which will dilute the fund’s main purpose to be accessible to vulnerable communities.
As we approach this fifth board meeting, it is encouraging to see that several of the priorities we have consistently raised are starting to take shape, and some of these concerns are highlighted in the start-up phase proposal.
First, it is encouraging to see in the start-up phase proposal that the board remains committed to a country-driven approach that places national decision-making at the heart of the Fund’s early operations. The proposal rightly recognizes that affected countries themselves should define their needs, set their priorities, and determine the best pathways for disbursement. The fund should be aligned with the national climate plans and should be complementary to existing national initiatives to fight against climate change.
The start-up phase is subjected to a span of two years (2025 – 2026) and it is essential to emphasise the programmatic approach and the rapid disbursement via direct budget support for addressing the long-term and immediate impacts of climate change. Although readiness support is important, there should be a clear line of synergy with the Santiago Network on Loss and Damage (SNLD) work since the gap of strengthening country-led programmatic approach is a clear mandate of the SNLD under the Warsaw International Mechanism on Loss and Damage (WIM). In addition, the separation of the two institutions in terms of capacity support for the country will strengthen the efficiency of both institutions as well as their role within the funding arrangement of the fund for responding to loss and damage.
In terms of the resource allocation as stipulated in para 60 of the Governing Instrument, we welcome the initiatives of having a floor of allocation for the SIDs, and LDCs, however, even in the start-up phase there is a need to consider the needs and priorities of other vulnerable developing countries, the best available science and the safeguards against overconcentration since the start up phase should do the best to consider the point that can ensure a strong pillar of the fund.
On the funding modalities (V, para 52), we are encouraged to see that grants are the proposed and recommended option as a primary financial instrument in the start-up phase. However, we are concerned to see that the instruments are proposed to include concessional loans, guarantees, equity and other instruments in the subsequent phase(s). It is crucial to centralise that the fund should be financed in the form of grants. Hence, we remind the board that the fund should come in the form of grants in all disbursement phases to ensure that support to vulnerable countries does not come with the burden of debt as it is unacceptable for the most vulnerable countries and communities. The proposal for the start-up phase to avoid duplication and rigidness and that innovation and flexibility to be the key is rightly mentioned. We also value the importance of constant feedback, and inclusivity of communities throughout the process as the fund is designed to respond to their needs.
We appreciate the consideration of direct access for countries and access through accredited entities should be according to the country’s needs. The Board must explicitly prioritize simplified access procedures for smaller entities and avoid an over-reliance on intermediaries whether through UN agencies or International organizations that can dilute the responsiveness of the Fund to be fit for purpose within the national circumstance, policies, and programmatic approach.
However, while the proposal for the start-up phase lays some important groundwork for the early disbursement of the fund, and announces promising future for the fund, there remain critical gaps where decisive action from the Board is essential as early as B.5 to finalise a robust start-up phase.