The Fund for Responding to Loss and Damage (FRLD) has unveiled its start-up phase, dubbed the Barbados Implementation Modalities (BIM), with a $250 million budget to support developing nations through 2026. The announcement, made at a three-day board meeting concluding April 10, in Barbados, marks a hard-won milestone for the UN-backed mechanism established at COP27 in 2022. Yet, with only a fraction of pledged funds delivered and mounting concerns over scale and speed, activists warn that the plan falls short of the urgent needs of vulnerable communities.
The BIM strategy prioritises national-level responses to climate catastrophes, offering grants between $5 million and $20 million for country-led projects. Governments can also access direct budget support for emergency measures, such as temporary housing for displaced populations. The focus on state-driven interventions, however, has drawn criticism from activists who advocated for direct community-level action. Harjeet Singh, founding director of the India-based Satat Sampada Climate Foundation, hailed the fund’s launch as a “long-overdue step” but stressed that “frontline communities must have direct access to resources and decision-making”.
A key decision from the Barbados meeting ensures that at least 50% of the fund’s resources will go to Small Island Developing States (SIDS) and Least Developed Countries (LDCs), a compromise after heated debates. Developed nations pushed for this binding minimum, while many developing countries preferred a less rigid target. Richard Sherman, FRLD board co-chair, called the agreement a testament to “collective, multilateral action” despite a “complicated” meeting marked by disagreements.
The fund’s financial constraints remain a glaring issue. Of the $768 million pledged by governments, only $495 million has been formalised, and just $321 million paid. This pales against the estimated $400 billion annually needed to address loss and damage in developing nations, according to the Loss and Damage Collaboration, a network of NGOs. FRLD’s executive director, Ibrahima Cheikh Diong, pledged to deliver a resource mobilisation plan by the end of 2025, but the gap between needs and resources misses ground realities.
Barbados Prime Minister Mia Mottley, addressing the board, called for bold measures to scale up funding, spotlighting taxes on aviation, shipping and fossil fuel extraction. As co-chair of the Global Solidarity Levies Task Force alongside France and Kenya, Mottley is pushing for concrete proposals by COP30 in November 2025. “Those who contributed to the problem must help solve it,” she declared, urging oil and gas CEOs to contribute or face the consequences of a warming planet. Her vision for a shipping levy, however, was dealt a blow when governments ruled that penalties on polluting ship owners would stay within the maritime sector, not climate finance.
The board also tackled the role of other multilateral funds, like the Green Climate Fund, in project delivery. A proposal for collaboration will be developed by the FRLD Secretariat. On financing, the fund will stick to grants but allow recipient countries to blend these with private or public instruments voluntarily. Activists, however, demand clarity on private sector role, insisting that local micro, small, and medium enterprises be prioritised over MNCs or polluters. “Fossil fuel companies must pay for damages, not profit from the response,” Singh said.
While the BIM launch signals progress, concerns persist about the fund’s speed and accessibility. The Secretariat has been tasked with simplifying disbursement procedures to ensure rapid aid delivery, particularly for direct budget support. Critics also note the lack of explicit mechanisms for communities to access funds directly or lead responses, with a proposed Small Grants Program deferred. With the next board meeting set to approve the first round of project proposals, the world watches to see if the fund can deliver swift, equitable support to those bearing the brunt of the climate crisis.