Cyclone-ravaged Sri Lanka set to apply for ‘loss and damage’ funding

In the aftermath of Cyclone Ditwah’s devastating impact, Sri Lanka plans to apply for payment from the U.N.’s newly implemented loss and damage fund, designed specifically to help climate-vulnerable developing countries cope with severe, unavoidable climate change impacts.
Ditwah, a tropical cyclone that caused direct damage estimated at $4.1 billion, equivalent to about 4% of Sri Lanka’s GDP, hit infrastructure and livelihoods, while intangible losses such as impacts on social systems and ecosystem services remain harder to quantify.
Accessing the Fund for responding to Loss and Damage (FRLD) will require rigorous climate attribution and institutional capacity, experts say, noting that Sri Lanka must scientifically demonstrate the extent of losses directly attributable to climate change and strengthen governance, legal frameworks and coordination to secure the funding.
The FRLD remains under-resourced, with an initial allocation of $250 million, far below the tens to hundreds of billions needed annually, prompting calls for quicker, direct funding mechanisms to support urgent rebuilding and climate resilience.

COLOMBO — Veteran environmental activist Hemantha Withanage of Sri Lankan NGO the Center for Environmental Justice has been a regular presence at United Nations climate conferences for years, repeatedly calling for compensation for countries in the Global South severely impacted by climate change-related disasters.
At each of these conferences of the parties, or COPs, Withanage and like-minded activists have pressed wealthy, high-emitting nations to accept responsibility for the damage caused by human-induced climate change to establish a fund to cover what’s known as loss and damage.
These long-standing demands turned deeply personal this year. Sri Lanka is now preparing to become one of the first countries to seek assistance from the newly established Fund for responding to Loss and Damage (FRLD), following the devastation caused by Cyclone Ditwah in late November. The cyclone killed at least 650 people, left around 200 missing, and triggered widespread destruction across the island.
“I never imagined that my own country would be among the first applicants to the fund,” Withanage said.

Climate activists who long campaigned for the creation of a loss and damage fund are pushing for increased financial contributions to support countries facing the impacts of climate change. Image courtesy of Asian Peoples’ Movement on Debt and Development (APMDD).

Assessment on physical damage
A report by the World Bank Group’s Global Rapid Post-Disaster Damage Estimation (GRADE) puts the direct physical damages from the cyclone at $4.1 billion, equivalent to about 4% of Sri Lanka’s GDP. According to the report, infrastructure including roads, bridges, railways and water supply networks account for the largest share of losses, at $1.735 billion, severely disrupting connectivity. Damage to residential buildings and household contents is estimated at $985 million, while agriculture losses total $814 million, threatening food security and rural livelihoods. Schools, hospitals, businesses and industrial facilities, many of them located along rivers and floodplains, account for another $562 million in damage, interrupting essential services and local economies, the report adds.
Sri Lanka has been struggling to recover from its 2022 economic crisis, when the country was compelled to declare bankruptcy amid a severe foreign-exchange shortage.
“Ditwah damage would be a major economic shock for the country unable to absorb on its own,” said Sunimal Jayathunga, additional secretary at the Ministry of Environment and former head of the Climate Change Secretariat.
He said the government has begun preparations to apply to the loss and damage fund as the fallout from Ditwah’s impact continues to unfold.
“The Ministry of Environment has initiated the process by bringing together relevant agencies, and we aim to submit the application as early as possible,” Jayathunga told Mongabay.
He noted the $4.1 billion figure captures only direct physical damage, and doesn’t include losses to ecosystems, cultural heritage or social well-being, which are far harder to quantify. “If those were included, the real cost would be much more,” he said.

The direct economic impact of Cyclone Ditwah is estimated at around $4.1 billion, according to an assessment by the World Bank Group’s Global Rapid Post-Disaster Damage Estimation (GRADE). Image courtesy of Aerial Vids SL Drona.

Call for applications
The idea for the FRLD was agreed to at the COP27 climate talks in Sharm el-Sheikh, Egypt, in 2022, after nearly three decades of negotiations under the U.N. Framework Convention on Climate Change (UNFCCC). At COP30 this year in Belém, Brazil, the fund moved into early implementation, opening its first call for applications with an initial allocation of about $250 million.
The fund is designed to support countries facing irreversible climate impacts — such as extreme weather events, sea-level rise and slow-onset disasters — that can’t be addressed through mitigation or adaptation efforts alone.
Ranga Pallawala, a climate change policy expert at SWITCH-Asia, an EU-funded program to promote the clean energy transition in Asia, cautioned that accessing the fund will be far from straightforward for Sri Lanka.
“Climate change undoubtedly intensified the power of Cyclone Ditwah, but Sri Lanka will need to establish what proportion of the damage is directly attributable to climate change, as opposed to natural climate variability,” Pallawala told Mongabay. Such attribution, he said, requires rigorous scientific and economic analysis.

Intangible losses caused by Cyclone Ditwah such as impacts to social systems and ecosystem services remain much harder to quantify. Image courtesy of Aerial Vids SL Drona.

Climate attribution
Sri Lanka has experienced severe floods in the past, notably in 1947 and 1957, highlighting its natural exposure to extreme weather. However, Pallawala said global warming has increased both the frequency and intensity of such events, making climate attribution essential for any loss and damage claims. Producing assessments that meet international standards often requires expertise in climate science, disaster economics and environmental accounting capacity that many developing countries lack. As a result, Sri Lanka may need technical support through mechanisms such as the Santiago Network, universities or U.N. agencies, he said.

Percentage of direct damage caused by the Cyclone Ditwah. Map courtesy of the World Bank.

Sisira Madurapperuma, director of preparedness and climate action at the Thailand-based Asian Disaster Preparedness Center (ADPC), said securing climate finance depends not only on evidence, but also on institutional strength.
“There are several international climate funds such as the Green Climate Fund, the Adaptation Fund and now the loss and damage fund, but to access them, countries must have strong governance, legal frameworks, transparency and coordination with fiscal and monetary authorities,” he said.
Madurapperuma added that any recovery funds disbursed to Sri Lanka under the FRLD should be used to rebuild infrastructure better, not simply restore what was lost.
“Sri Lanka must accept that similar extreme events will recur due to climate change more frequently. Rebuilding in a hurry, as before, will only lead to repeated losses,” he said.

Cyclone Ditwah-induced floods and landslides damaged more than 4,000 houses, causing an estimated $985 million in losses to homes and their contents. Image courtesy of Aerial Vids SL Drona.

Climate-resilient construction
While climate-resilient construction is likely to cost 10-20% more, Madurapperuma said it would work out far cheaper over the long term compared to repairing infrastructure after every disaster.
Some resilience measures, he noted, will require additional investment. For example, hospitals can place critical and expensive equipment on higher floors to protect them from floods. He pointed to Japan, which is frequently hit by earthquakes and tsunamis, as a model for resilient design, and urged Sri Lanka to learn from global best practices.
The FRLD opened its application window in mid-December and will accept submissions until June 2026. Jayathunga from the Ministry of Environment said formal evaluations are expected to begin only in July 2026, meaning funds may not be disbursed until early 2027.
“Critical infrastructure and livelihoods have already been affected, so the country cannot afford to wait that long,” he said, adding that Sri Lanka is likely to seek interim support from institutions such as the International Monetary Fund, the World Bank and the Asian Development Bank.

This map shows the damages incurred due to Cyclone Ditwah, which impacted all 25 districts of Sri Lanka. Image courtesy of the World Bank.

Weak framework
Climate justice advocate Harjeet Singh warned that the FRLD, while historic in nature, remains deeply under-resourced. The fund received pledges of around $817 million but has initially allocated only $250 million to address the first call for funding requests — far less than the tens to hundreds of billions required annually by climate-impacted nations.
“We also need mechanisms that allow countries hit by climate disasters to access finance quickly,” Singh said. “The current framework is too slow and cumbersome.”
He added the lack of new pledges at COP30 was disappointing, noting that contributions remain far below the requirement to meet escalating climate-related losses.
He also said funds should be channeled directly to governments, rather than primarily through U.N. agencies. “When money is routed through intermediaries, significant portions are lost to handling fees. That money should instead go directly toward rebuilding communities,” Singh said.
Civil society representatives, including Withanage, continue to press for rapid scaling-up of the fund, enabling it to meet the real and growing needs of countries on the climate change frontlines.

Banner image: Damage to infrastructure including roads, bridges, railways and water supply networks accounted for the largest share of the estimated $4.1 billion in losses as a result of Cyclone Ditwah in Sri Lanka. Image courtesy of Aerial Vids SL Drona.