Policy Brief

Download PDF

Allocating international loss and damage finance through national climate funds: prospects for African LDCs

Bonn: German Institute of Development and Sustainability (IDOS)

DOI: https://doi.org/10.23661/ipb6.2025

The new loss and damage funding framework under the United Nations Framework Convention on Climate Change (UNFCCC) emphasises the importance of channelling support through national systems and mechanisms. This approach could prove particularly challenging for African least developed ountries (LDCs), which have been prioritised for support. These countries remain confronted with major challenges to access and utilise international climate finance, especially through direct access. National climate funds (NCFs) can have a potential role in delivering  international loss and damage finance to African LDCs that is in line with their national priorities. NCFs can be defined as entities mandated to finance the implementation of national climate strategies and to manage and/or coordinate domestic and international sources of climate  finance. NCFs can enhance the institutional capacities of countries by supporting the development of loss and damage strategies, facilitating access to international funding, aligning resource allocation with local priorities, and ensuring the effective tracking of loss and damage finance.  This Policy Brief explores the role of NCFs in the evolving global loss and damage finance architecture with a focus on African LDCs. We examine the design features of five NCFs against criteria for assessing their relevance to support measures that address loss and damage. The  studied NCFs are: the Benin National Fund for Environment and Climate, Ethiopia’s Climate-Resilient Green Economy Facility, Burkina Faso’s Intervention Fund for the Environment, the Mali Climate Fund and the Rwanda Green Climate Fund. Key policy messages
• Despite that only a limited number of African LDCs have established NCFs, these demonstrate their potential to channel loss and damage funding, especially for environmental rehabilitation and climate-resilient recovery efforts. Particular strengths relate to their role in priority sectors  for climate change adaptation and in relation to biodiversity loss, drought, land degradation and desertification.
• Existing NCFs in African LDCs have inadequate mandates and capacities to manage the complex funding needed for loss and damage. An emerging issue is their presently limited role in linking climate and disaster risk finance.
• The NCFs of African LDCs can be instrumental to promote coherence and complementarity with other funding sources at the national level. Countries must establish comprehensive legislative, policy and regulatory frameworks to define the institutional roles of NCFs in loss and damage response, supported by international funding to strengthen their institutional capacities.

Washington Onyango Kanyangi is a Research Associate at the Africa Research and Impact Network (ARIN).
Assouhan Jonas Atchadé is a Research Associate at the Regional Center of Excellence on Sustainable Cities in Africa (CERViDA), the University of Lomé, Togo, and at ARIN.
Joanes Atela is Executive Director of ARIN.
Charles Tonui is Engagement and Policy Dialogue Coordinator at ARIN.

About the IDOS author

Aleksandrova, Mariya

Climate risk governance

Further IDOS experts

Baydag, Melis

Political Science 

Bergmann, Julian

Political Science 

Brandi, Clara

Economy and Political Science 

Dang, Vy

Political Science 

Dippel, Beatrice

Comparatist 

Donnelly, Aiveen

Politcal Science 

Ekoh, Susan S.

Environmental Research 

Erforth, Benedikt

Political Science 

Fuhrmann-Riebel, Hanna

Economy 

Furness, Mark

Political Science 

Goedeking, Nicholas

Comparative Political Economy 

Grimm, Sven

Political Science 

Hackenesch, Christine

Political Science 

Hagenström, Paul

International Relations 

Kativu, Saymore Ngonidzashe

Geography 

Keijzer, Niels

Social Science 

Koch, Svea

Social Science 

Lehmann, Ina

Political Science 

Löpelt, Sarah

International relations and Sustainability policy 

Malerba, Daniele

Economy 

Mathis, Okka Lou

Political Scientist 

Never, Babette

Political Scientist 

Pegels, Anna

Economist 

Rodríguez de Francisco, Jean Carlo

Ecological economics 

Srigiri, Srinivasa Reddy

Agricultural Economist 

von Haaren, Paula

Development Economics 

Wagner, Niklas

Climate & Knowledge Sociology 

Yi, HyunAh

Energy and Environmental Policy