Loss and Damage Fund Board operationalizes country support system

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Kuala Lumpur, 30 April (Jinghann Hong) – The eighth meeting of the Board (B.8) of the Fund for responding to Loss and Damage (FRLD) held on 22-24 April 2026 in Livingstone, Zambia, has decided to operationalize the country support system under the Barbados Implementation Modalities (BIM), thus marking an important step towards enabling wider access to the Fund for more countries during its initial start-up phase.

The Board meeting which saw opening remarks by Credo Nanjuwa, the Provincial Minister for Southern Province, also took another key decision on operationalizing direct access through direct budget support via national governments.

[This article focuses on the country support system (CSS) and the issues under contention. A further article will follow.]

Chaired by the newly elected Co-Chairs, Georg Børsting (Norway) and Camila Minerva Rodriguez Tavarez (Dominican Republic), the Board considered a number of substantive agenda items, including reports from the FRLD Secretariat, the interim Trustee (the World Bank), and Board committees on budgetary and risk matters. With regard to operationalizing the BIM, five key agenda items were scheduled: the pipeline status report; the assessment methodology; modalities and a risk management framework for operationalizing direct access through direct budget support via national governments; the results measurement framework; and the oversight fee policy.

Two additional agenda items were proposed: one on matters related to the Hosting Agreement and Trustee Agreement, proposed by Richard Sherman (South Africa) and another on the risk management framework for the BIM, suggested by Jan Dusík (European Union). It is learnt that the inclusion of the former item is strongly supported by developing country Board members, given the varying interpretations of the FRLD Governing Instrument and the decisions adopted at COP 28 in Dubai in 2023 in this regard.

During the adoption of the agenda, Board members agreed that the matter proposed by Sherman be adopted as a standalone agenda item, while the issue of the risk management framework be addressed under the Board’s updated workplan. Following discussions on matters related to the Hosting Agreement and Trustee Agreement were held in closed-door sessions that were neither accessible to observers nor streamed via webcast.

On funding requests in the FRLD pipeline, the Secretariat’s presentation as displayed on the screen reports that, as of 3 April 2026, 10 funding requests had been submitted under the BIM, with a total requested budget of USD 165.9 million. Of these, 7 requests originated from least developed countries (LDCs) and small island developing States (SIDS), accounting for USD 116.4 million in total. In terms of regional distribution, 5 requests were from Africa, 3 from Asia-Pacific, and 2 from Latin America and the Caribbean. Regarding access modalities, 9 requests were submitted through access entities to the FRLD funds, and the other one was submitted under direct access through the direct budget support modality via a national government.

On the status of the FRLD Trust Fund resources, the interim Trustee reported that of the total pledges and contributions amounting to USD 822.06 million, only USD 422.09 million had been received in cash. Following the earlier allocation of USD 250 million for the BIM, the Fund’s gross commitment authority stood at USD 182 million. Subsequent discussions on financing throughout the Board meeting were punctuated by concerns from developing country Board members over delays in converting pledges into binding contribution agreements and into disbursed resources.

Country support system

At its seventh Board meeting, the FRLD Board had requested the Secretariat to develop a proposal for a CSS under the BIM to support the operationalisation of paragraph 47 of the Governing Instrument, which states that the FRLD “may provide support for activities relevant to preparing and strengthening national processes and support systems. This may include support for developing proposed activities, projects and programmes, such as planning activities for addressing loss and damage; estimating financial requirements for implementing loss and damage activities; and establishing national loss and damage finance systems.”

Guidance and feedback from the Board were provided during consultations held in advance of B.8, with further deliberations taking place during the informal meeting on 21 April 2026. After receiving additional feedback on the second day of B.8 when this agenda item was opened, the Co-Chairs returned with a draft decision on the final day of the Board meeting.

Ensuing negotiations on the decision exposed continuing divisions within the Board, with developed country members seeking tighter Board oversight over CSS approvals and more involved collaboration with the Santiago Network on Loss and Damage, while developing country members pressed for a more responsive and efficient Fund capable of addressing urgent loss and damage needs. (Highlights of the exchanges over these issues are set out below.)

The Board at the Livingstone meeting, agreed to operationalise the CSS under the BIM. The adopted decision provides that the scope of the CSS under the BIM will include the following activities:

–  (i) Funding request development for FRLD;

–  (ii) Setting up systems and capacities for enabling access; and

–  (iii) Institutional strengthening and capacity-building of national ministries (including national focal points) and national access entities for implementation.

The Board also approved an annual funding envelope of USD 7.5 million for the CSS, with a cap of up to USD 250,000 per country, subject to annual Board approval of available commitment authority. Countries shall use the same access modalities as adopted for the BIM under previous Board decisions, while the interim trustee, the World Bank, will be used for the management and disbursement of CSS grants.

The decision also requests the Secretariat to develop detailed operational modalities for the CSS for consideration and adoption at the FRLD Board’s next meeting (B.9), including the funding cycle, funding criteria, additional access modalities, oversight fees, monitoring, reporting and evaluation requirements, as well as terms of reference for calls for CSS requests and templates.

The Board also requested the Secretariat to launch the call for CSS requests at B.9. The Secretariat is further requested to capture learnings from the implementation of the CSS under the BIM to inform the development of CSS for the long-term.

[Note: The draft decisions are restricted documents displayed on screen during Board’s consideration and final adoption by the Board. The adopted decisions are not yet published online.] 

Approval for CSS requests

The issue of the delegation of authority to the Secretariat/Executive Director for approval of the CSS requests emerged as a key point of contention. Developed country members largely sought to retain Board control over approvals and limit delegated authority to the Secretariat.

Taguchi Kazuho (Japan) stated that “We spend, allocate a significant amount to these countries. So, it is better that the Board reserves, or is somehow involved in the final decision of the approval.”

Lorelei Lankester (France) suggested “a non-objection procedure, for instance, of decisions taken in between meetings” in order to find an equilibrium between creating a delegatory process and the need to be demand-driven.

Antonella Baldino (Italy) said that “This [the decision-making authority delegated to the Secretariat or the Executive Director] would need to be clearly anchored in a Board-defined exact allocation criteria, including transparent hand pre-agreed parameters.” She added that “particular attention should be given to cost efficiency across the delivery chain, including fees paid to intermediaries, with the objective of maximizing resources.”

In response to this, Sherman (South Africa) pointed out that under the Green Climate Fund (GCF) Board—on which he said many of the same developed country members also have seats, with the exception of the EU— over or just under USD 1 billion in support to developing countries has been delegated to the (GCF’s) Executive Director without an accountability framework. He contrasted the USD 250,000 under discussion at the FRLD with the total envelope of up to USD 7 million per country over four years under the GCF Readiness and Preparatory Support Programme.

Stating bluntly as to what he described as the lack of commitment by developed country members to support loss and damage, Sherman called on the Board to “mandate the Secretariat to do what’s necessary”, to “stop trying to micromanage the Secretariat” and to “give faith to our Secretariat”.

In the draft decision text, a compromise was made where authority was delegated to the Executive Director/FRLD Secretariat for the approval of CSS requests, subject to an accountability framework to be adopted by the Board at its ninth meeting.

However, during textual negotiations on the draft decision, Kazuho proposed adding the phrase “[subject to…] as well as a short no-objection procedure by the Board between Board meetings,” to which Sherman requested that the text be bracketed, noting that such a procedure did not exist and that “there’s an inherent contradiction between the delegation [to the Secretariat/Executive Director] and coming back to the Board.”

Sherman also proposed including a reference to paragraph 22(i) of the Governing Instrument in order to clarify that the FRLD Board already had the mandate and authority to establish an accountability framework, requesting developed country Board members to “please stop trying to renegotiate the Governing Instrument”.

The proposed no-objection procedure was eventually dropped and replaced with language confirming that the Board’s zero-tolerance policy on prohibited practices, together with relevant procedures of the Trustee Agreement, would apply to the CSS.

After much deliberation, the final decision text on this issue reads:

“(f) Decides that authority will be delegated to the Executive Director/FRLD Secretariat for the approval of country support system requests, subject to the adoption by the Board of an accountability framework in accordance to paragraph 22(i) of the Governing Instrument for delegating authority to the Executive Director to approve country support system projects, to be considered by the Board at the ninth meeting.

(g) Confirms that the zero tolerance for prohibited practices adopted by the Board in decision B.8/D.X at its eighth meeting and the relevant procedures of the Trustee Agreement, including paragraphs 5.02 and 5.06, will apply to the country support system.”

Collaboration with the Santiago Network

Another contentious issue pertained to the proposed role of the Santiago Network in relation to the CSS, with developing country members expressing the view that the two bodies [FRLD and Santiago Network] are complementary institutions with separate mandates, while developed country members pushed for deeper operational linkages under the banner of complementarity and coherence.

Prior to B.8, the Secretariat had been requested to further explore opportunities for collaboration between the FRLD CSS and the Santiago Network. The Secretariat’s paper presented four initial options:

– Option 1: Using experts under the Santiago Network’s OBNEs (organisations, bodies, networks and experts);

– Option 2: Santiago Network as a disbursement agent;

– Option 3: Santiago Network managing the review of CSS requests;

– Option 4: Santiago Network managing the full CSS operations.

Developing country members expressed strong reservations over any arrangement that would outsource the Santiago Network to operate the FRLD CSS. Ruleta Camacho-Thomas (Antigua and Barbuda) said, “the Santiago Network is something different.” Madeleine Rose Diouf (Senegal) similarly stated, “There’s no need for the Secretariat of the Santiago Network, or for the Santiago Network to manage this fund. We think, at the country level, this can be done in order to really respond to national needs.”

In contrast, several developed country members argued for further exploration of collaboration. Kajsa Nåtby (Sweden) made a request for the Santiago Network Secretariat to “present here in this meeting now, so that we can be informed by that before taking this decision [on the CSS].” Jan Dusik (EU) stated that “the most logical option that is available is the Santiago Network,” supported extending cooperation not only for projects under the current BIM call but more broadly.

Sherman (South Africa) stressed that the FRLD and Santiago Network are “two separate bodies with two distinct mandates and two different boards.” He recalled that the matter had already been discussed at the Board’s fifth meeting in Barbados, where the Board had mandated the Secretariat to undertake further work, which was then presented to the Board at its seventh meeting in Manila. Sherman pointed to paragraph 35(n) of the Governing Instrument, which mandates the FRLD Secretariat to coordinate with the Santiago Network to ensure cooperation, complementarity and coherence, and expressed, “I’m not quite sure why we need to continue going on and on and on about the discussion.”

The discussion took another turn when the Co-chairs’ pre-prepared draft decision text revealed a proposal for further engagement between the Co-chairs of both institutions, in addition to an operational relationship between the Secretariats of the two bodies. The initial text reads:

“(i) Requests the Co-Chairs of the Board to engage with the Co-Chairs of the Santiago Network Advisory Board to identify options for complementarity and coherence between the FRLD country support system and the operations of the Santiago Network and to provide an update to the Board at its ninth meeting;

(j) Also requests the Secretariat of the FRLD to continue engaging with the Secretariat of the Santiago Network on the basis of their ongoing partnership, including to work on complementarity and coherence between the FRLD country support system and the operations of the Santiago Network and to report to the Co-Chairs on relevant developments in advance of the ninth meeting of the Board;”

Sherman reiterated that paragraph 35(n) of the Governing Instrument had already made it clear that matters of complementarity and coherence fall within the responsibility of the Executive Director and Secretariat, rather than the political level of Co-chairs or the Board. He proposed deletion of paragraph (i), or failing that, to bracket language ‘identify options for complementarity and coherence between the FRLD country support system and the operations of the Santiago Network’.

Diouf (Senegal) supported deleting paragraph (i), echoing that the issue of complementarity between the Santiago Network and the CSS is something that has to be dealt with at the country level.

Lorelei Lankester (France) said that it was her understanding that the Santiago Network had already assisted some countries in developing funding proposals, citing Vanuatu’s experience as one from which the FRLD Board could benefit through further feedback. As such, “we think that requests formulated in that paragraph (i) would help us understand what the Santiago Network already does by supporting countries in developing funding requests for the FRLD, understanding that they could also request assistance from the CSS.”

Yolando Velasco (Philippines) observed that there is a “whole universe of institutions” that engage in loss and damage not limited to the Santiago Network, such as other multilateral institutions and philanthropic organisations. In the context of the CSS and the overall work of the FRLD, he proposed that this be recognised in a separate paragraph.

After much deliberation, the final decision text on this issue reads:

“(i) Requests the Co-Chairs of the Board to continue to engage with the Co-Chairs of the Santiago Network Advisory Board and to provide an update to the Board at its ninth meeting, in accordance with paragraph 14 of the Rules of Procedure;

(j) Also requests the Secretariat of the FRLD to continue engaging with the Secretariat of the Santiago Network on the basis of their ongoing partnership, including to work on complementarity and coherence between the FRLD country support system and the operations of the Santiago Network and to report to the Co-Chairs on relevant developments in advance of the ninth meeting of the Board, in accordance with paragraph 35(n) of the Governing Instrument;

(k) Also requests the Secretariat of the FRLD to develop a paper on developing partnerships with other entities that form part of the funding arrangements, …;”

The ninth meeting (B.9) of the Board of the Fund for responding to Loss and Damage will be held in the Philippines from 8-10 July 2026.