The World Bank’s Board of Executive Directors has approved the institution's role as interim secretariat host and trustee for a fund aimed at addressing loss and damage caused by climate change. This decision follows an agreement reached by 198 countries during COP28 to establish financial support for nations most affected by climate impacts.
Since COP28, the World Bank has been working to operationalize the Fund as a financial intermediary fund (FIF) for an interim period of four years. Today's approval marks a significant step towards making the Fund functional, in collaboration with the Board of the Fund for Responding to Loss and Damage.
"The World Bank welcomes the Board’s decision and the role of the new Fund in providing both much-needed support and hope to poor and vulnerable people and communities in countries hardest hit by climate impacts," stated a representative from the World Bank.
The Fund Board will operate independently from the World Bank, with its own governance structure responsible for determining key priorities such as financing decisions, eligibility criteria, and risk management policies. The Fund is expected to become operational in the coming months. As Trustee, the World Bank will not engage in fundraising or funding allocation decisions, nor will it be involved in project identification, preparation, appraisal, implementation, or monitoring. Implementing entities and direct access recipients will be solely accountable for fund usage concerning fiduciary, environmental, and social aspects vis-à-vis the Board of the Fund.