Nepal secures $66 million in climate funding following devastating floods

Nepal is set to receive $65 million in international climate funding, including a $21.6 million grant for communities affected by devastating floods and around $45 million for three climate adaptation projects, as the country faces mounting recovery costs and growing climate risks.

The $21.6 million grant was approved by the Fund for Responding to Loss and Damage (FRLD) to support relief, rehabilitation and reconstruction in areas affected by flooding in the Bhotekoshi River basin. “In response to the Bhote Koshi flash floods, in a resounding show of support, the Board of the Fund for responding to Loss and Damage (FRLD) has provisionally set aside USD 21.6 million from its available commitment authority for Nepal,” said FRLD in its press statement. 

FRLD, established under the United Nations climate framework, is one of the newest international climate finance mechanisms, established to help developing countries and vulnerable communities respond to the economic and non-economic losses and damage caused by climate change, including climate-related disasters.

The decision followed a formal request from the Nepalese government and was approved at a first-ever extraordinary special meeting of the fund’s board.

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Nepal will need to submit a dedicated project proposal outlining how the grant will be used. The government plans to coordinate with relevant ministries, disaster management authorities and local governments to identify priorities, including food security, rural infrastructure and livelihood recovery.

The grant marks a significant step in mobilising international support for Nepal, although it represents only a small fraction of the estimated damage and reconstruction costs.

The government’s rapid damage and needs assessment estimates that recovery and reconstruction will require over $4.7 billion. 
It affected over 60,000 people from around 15,000 households, with nearly 1,500 deaths and over 5,000 people missing. 7,570 private homes and about 4,800 commercial establishments were damaged, while infrastructure accounts for roughly three-quarters of the estimated recovery bill.

Three climate adaptation projects receive $45 million

In a separate development, the Adaptation Fund has unanimously approved three climate adaptation projects proposed by Nepal, providing a combined $45 million to strengthen environmental protection and community resilience.

The projects include $9.93 million for the Green Koshi Project, which will protect ecosystems and promote nature-based climate solutions in the Koshi region. The National Trust for Nature Conservation (NTNC) will implement the initiative.

A further $30 million has been approved for a project to strengthen flood and landslide early-warning systems across the Hindu Kush Himalayan region. Implemented by the International Centre for Integrated Mountain Development (ICIMOD), the initiative aims to improve forecasting capabilities and help vulnerable communities prepare for disasters.

The third project, worth approximately $5 million, will support locally led climate action in Lumbini Province. Implemented by UN-Habitat, it will promote nature-friendly initiatives designed to build resilience at the community level.

The Ministry of Forests and Environment said the approval of all three projects was an important achievement, particularly given intense global competition for limited climate adaptation funding.

Least Developed Countries express solidarity

Nepal has also received international support following the adoption of the 2026 Dili Ministerial Declaration on Climate Change at a meeting of ministers and representatives from the Least Developed Countries (LDCs) in Timor-Leste.

The declaration, endorsed by 44 countries, expressed solidarity with Nepal over the loss of life and infrastructure damage associated with a recent glacier-rock avalanche in the Himalayan region and subsequent flooding.

The LDC group highlighted the disproportionate impact of climate change on vulnerable countries that contribute relatively little to global greenhouse gas emissions but face severe consequences from climate-related disasters.

The declaration called for increased financial assistance to help vulnerable nations adapt to climate change and address losses and damages. It also emphasised the need for predictable, grant-based funding that countries can access more easily.

The group said climate finance needs identified in LDC climate plans exceed US$1 trillion and urged developed countries to make substantial progress towards providing at least $120 billion annually in adaptation finance by 2035.

It also called for stronger measures to address climate-induced displacement and the growing risks posed by floods, landslides and damage to critical infrastructure.