For years, the global conversation on climate change has been about what might happen. But for many countries and communities, the "future" has already arrived in the form of recurring floods, rising seas and droughts. The question is no longer only how to stop climate change and how to reduce its risks, but how to survive its impact.
In 2022, the world made a historic promise by establishing the Fund and the Funding Arrangement for Responding to Loss and Damage (FRLD). Now that promise is moving from political commitments to operational delivery. With the launch of the Barbados Implementation Modalities (BIM), the first funding cycle has officially begun and countries are preparing their loss and damage funding requests. Here is why this moment matters – and why "learning by doing" is our most important strategy.
Fast track Loss and Damage actions – Barbados Implementation Modalities (BIM)
The Barbados Implementation Modalities provide the operational framework for the FRLD. Designed as a grant-based mechanism with a bottom-up and country-driven approach, the BIM seeks to respond flexibly to diverse national loss and damage contexts. The first call for funding requests will accept submissions until 15 June, with the FRLD Board currently finalizing the last decision parameters at its 8th meeting in Livingstone, Zambia 22–24 of April. Everything going to plan, the FRLD Board will then greenlight the first set of funding requests in July of this year.
The BIM is not merely a financing window. It represents a pioneering model in how loss and damage can be addressed in a structured and sustainable manner. The Secretariat’s emphasis on “learning by doing” reflects an understanding that countries face vastly different loss‑and‑damage contexts and require tailored interventions.
With vision: Climate information for Loss and Damage
But how can countries now get started and submit actions under the BIM? One critical area for countries to seek support from the FRLD is to build up climate information systems, data and modelling to address loss and damage and to inform relevant interventions. Climate risk analytics can help identify emerging hotspots for loss and damage, assess the likelihood and impacts of extreme events and slow-onset events, and strengthen the evidence base for prioritizing response and recovery measures.
By integrating climate projections with socioeconomic and exposure data, modelling can also support forward-looking assessments of potential losses and damages, helping governments and partners design more targeted and effective interventions. Strengthening national capacities in this area will be essential to ensure that funding decisions under the FRLD are grounded in robust evidence and aligned with country priorities. Crucially, information systems need to be embedded in national systems to create countries' own authoritative agencies for loss and damage information.
Expanding the toolbox: The role of risk finance
Addressing loss and damage also requires a diverse set of policy and financial instruments. All proposals must align with the FRLD’s eligible activities of funding and initial funding criteria; however, the appropriate mix will vary across countries, depending on exposure, institutional capacity and development priorities. Effective responses may combine measures that strengthen governance systems, enhance financial preparedness and support recovery and reconstruction processes.
Within this broader toolbox, climate risk finance represents a particularly relevant component and thus might feature in the funding requests by countries under the BIM. While humanitarian response and adaptation are essential, they cannot fully address the additional financial volatility created by recurrent climate shocks. Pre-arranged financial mechanisms – such as contingency funds, insurance solutions, and risk-layering strategies – can provide rapid liquidity following disasters, reducing reliance on emergency appeals or disruptive budget reallocations.
As discussions on the Fund’s broader policy on financial instruments are expected in 2027 (FRLD/B.7/12), including consideration of additional modalities, ensuring coherence between grant-based support and other potential financial tools will be important for maintaining strategic consistency.
From the first cycle of projects to lasting impact
The first operational funding cycle of the FRLD is therefore more than an administrative milestone. It is a formative learning phase that will shape how the Fund evolves. Early decisions and implementation experiences will influence not only the effectiveness of individual projects, but also the Fund’s broader operational policies and instruments. Responding to loss and damage is an emerging field, and countries are at the beginning of gaining practical experience, for example through setting up information systems or pre-arranged financing mechanisms. From the perspective of the FRLD Secretariat, capacity constraints might be a defining feature of the first phase. As a relatively small team, the Secretariat is likely to face a high volume of funding requests within a limited timeframe, meaning there is less room for detailed and overly technical feedback.
In this context, “learning by doing” is not simply a guiding principle, but a practical necessity: it enables the Fund and its partners to test approaches, generate evidence, and refine operational practices in real time. If approached with strategic intent, this process can help establish a model of loss and damage finance that is not only responsive in the short term, but also increasingly structured, predictable and embedded within national systems over time. It will also create the evidence base to further refine the Fund’s operational policies as the Fund matures and becomes a permanent feature of the international climate finance architecture.
