For the first time, the Loss, and Damage Fund have money on the table, not just promises. The real test is whether Pakistan can secure its share.
At COP30 in Belém, the long-awaited Fund for Responding to Loss and Damage (FRLD) finally moved from concept to operation. Its board approved the Barbados Implementation Modalities and opened a first call for funding requests worth roughly USD 250 million for 2025–26. Developing countries now have a six-month window, beginning mid-December, to submit proposals, typically in the USD 5–20 million range, that will serve as the Fund’s experimental pilot phase. It is genuine progress, but painfully small when compared with the scale of climate devastation faced by countries like Pakistan.
Even this USD 250 million pool will not be equally available. Significant shares are earmarked for Small Island Developing States and Least Developed Countries, leaving perhaps USD 100–150 million effectively accessible to middle-income climate-vulnerable countries. Pakistan’s climate minister has said the government will submit proposals in the USD 10–20 million range, while criticising the Fund as overly bureaucratic and thinly resourced. His challenge, “put your money where your mouth is”, captures a wider frustration: global climate finance still struggles to match political rhetoric with actual cash.
Civil society groups cautiously welcomed the FRLD’s launch but warned that the Fund risks repeating the delays it was designed to solve. “For the Fund to truly deliver, it must be more responsive to communities,” argued Brandon Wu of ActionAid USA, urging faster and more locally-driven access instead of slow project cycles. FRLD co-chair Jean-Christophe Donnellier described the launch as a “test, learn and shape” phase, language that reflects both humility about scale and the expectation of iterative improvement.
That iterative approach matters because Pakistan is not negotiating from an abstract position. The country remains one of the most climate-vulnerable in the world: the 2022 mega-floods affected 33 million people and inflicted losses measured in tens of billions of dollars. Its macroeconomic room for manoeuvre is constrained; Pakistan has engaged with the IMF’s Resilience and Sustainability Facility and negotiated programme reviews that provide limited climate-linked financing (in the order of USD 1–1.4 billion under RSF modalities), while the World Bank has offered multi-year development finance packages that begin to map pathways for larger investments. These instruments matter politically, they signal fiscal discipline to donors and markets, but they do not replace the grant-based, rapid relief and restitution that Loss & Damage is meant to deliver.
The political fault line running through Belém is now familiar: developing countries demand grant-first, rapid, locally accessible finance, while many donors and multilateral actors emphasize safeguards, results frameworks and governance, requirements they argue are necessary to ensure transparency and effectiveness. That tension explains why the FRLD’s first disbursements are deliberately cautious even as headlines trumpet the Fund’s operational launch. Tasneem Essop of Climate Action Network captured the stakes succinctly: “After thirty years of negotiations, people want proof that climate governance still serves them.” The proof will be whether money reaches people and communities on timelines that matter, not whether it clears up a dozen bureaucratic hurdles.
For Pakistan, the immediate question is tactical: how to convert a modest, experimental funding window into a strategic advantage. There are three practical imperatives.
First, readiness and bankability. Donors fund projects they can understand and monitor. Pakistan must offer a pipeline of fully costed locally-anchored proposals aligned with the BIM parameters: rapid-response housing, climate-resilient agriculture, and urban risk-reduction for flood-prone cities. Three to five well-scoped projects in the USD 5-20 million-range would make Pakistan a credible applicant, and counter claims that bottlenecks result from poorly prepared requests. Public investments in NDC 3.0 and the World Bank Country Partnership Framework provide co-financing and credibility.
Second, local access and institutional architecture. Pakistan’s strongest negotiating point is the urgency of devolved access. FRLD modalities allow national access and accredited intermediaries, but slow accreditation and centralised review risk delaying funds for communities. A national Local Access Facility—combining provincial implementation, a lean FRLD Readiness Unit in MoCC/Finance, and accredited international fiduciary partners, would convert the Fund’s pilot phase into a scalable national instrument. Aligning national and provincial policies, as FRLD board member Ali Tauqeer Sheikh recommends, would further improve funding prospects.
Third, diplomatic and financial diversification. Pakistan should treat the FRLD call as leverage, not the sole solution. Bilateral pledges, MDB blended facilities, philanthropic funding, and sovereign green instruments like green bonds or sukuk can be combined with FRLD grants to de-risk larger investments. Recent IMF engagements and multilateral credit lines demonstrate macroeconomic credibility and can help unlock blended finance, scaling projects from tens of millions into infrastructure-grade resilience.
The FRLD’s launch is a milestone, not a cure. Pakistan must act with tactical clarity: lodge well-prepared requests, build a national delivery mechanism, and convert modest grants into transformational co-financing. Waiting for replenishments would be slow and politically fraught. At COP30, rooms will echo with talk of “justice” and “historic responsibility,” but outside, lives, and livelihoods are immediately at risk. Pakistan’s advantage is twofold: moral legitimacy from recent catastrophe and the ability to demonstrate readiness through concrete, bankable projects and domestic instruments that attract blended finance.
The Fund’s first USD 250 million is tiny compared with planetary losses, but it is also a testing ground. Success will be measured not by speeches or photo-ops, but by whether families’ roofs are rebuilt, farmers’ crop insurance paid, and city drainage retrofitted within months. If Pakistan translates negotiating credibility into institutional preparedness and packaged projects, it will not merely be a claimant at COP30, it will be a model for how vulnerable countries turn small initial windows into lasting financial architecture for resilience.
The writers Nameer Urfi is a climate consultant at Carbo-X (Private) Limited and Ebadat Ur Rehman Babar is a researcher at the Sustainable Development Policy Institute (SDPI)
© 2025 SDPI. All Rights Reserved Design & Developed by NKMIS WEB Unit
