Prime Minister Balendra Shah told the United Nations General Assembly that Nepal needs grant-based financial support rather than new loans to rebuild following a catastrophic glacial flood that killed at least 1,450 people and damaged an estimated 10 percent of the nation’s gross domestic product.
Weeks after a glacier collapse near the border with China sent flash floods tearing through mountain valleys, the fiscal and human toll facing Nepal continues to mount. At least 1,450 people have been confirmed dead, and search operations remain underway for thousands of individuals still listed as missing following the late August disaster. Addressing world leaders in New York, Prime Minister Shah warned that vulnerable nations must not shoulder crushing debt to recover from disasters they did not cause.
When a climate-driven disaster destroys infrastructure of a poor country, the answer cannot simply be another mega loan or a patchwork of small grants,
Shah said. We need adequate grant-based support from the world.
Reconstruction Costs and the Debt Dilemma
Authorities are presently considering whether to pursue loans or grants to pay for rebuilding property and infrastructure ruined by the August 26 Bhotekoshi floods, with total expenses projected to reach billions of dollars. The National Planning Commission has launched a Post-Disaster Needs Assessment (PDNA) to calculate the full scope of destruction and recovery costs, with the final report anticipated in five weeks to serve as the foundation for an upcoming donor conference.
Rasuwa, Nuwakot, Dhading, and other districts suffered immense devastation when a massive glacier collapse on Mt Langtang Lirung’s northern slopes triggered floods that left 1,377 people confirmed dead, 5,326 missing, and 6,827 injured. Following the incident, a Rapid Damage and Needs Assessment (RDNA) evaluated public and private property losses at exceeding Rs400 billion. Initial evaluations indicate that roughly 32,933 people have been impacted, with 7,570 houses damaged or completely destroyed. According to officials, the final figures calculated through the PDNA could rise by at least 30 percent, pushing the government’s required funding to $4-5 billion. To cover these rebuilding expenses, authorities are now looking beyond conventional development partners to include wealthy philanthropists and prominent billionaires.
Friction at the UN Loss and Damage Fund
According to reports, a Nepalese government official stated that their funding request to the specialized United Nations Fund for Responding to Loss and Damage—which addresses extreme weather tied to human-induced climate change—will incorporate a rapid science review. This review concludes that unusually high temperatures in July and August played a role in destabilizing a region already vulnerable to geological hazards. Nepal has submitted a request for US$20 million, which is the highest limit accessible, to assist in covering immediate recovery expenses and preparing for future climate-related events. Nevertheless, the nation is one of 119 currently awaiting a ruling from the fund regarding financial assistance for climate damages and losses. Applications began to be accepted at the end of 2025, and so far, four have been considered by the fund’s board.
Proposing a Regional Resilience Pact
Beyond immediate financial relief, Prime Minister Shah proposed a climate alliance with neighboring India and China, urging action to protect the fragile Himalayan ecosystem after catastrophic flooding across the region.
Glaciers and floods do not travel with stamps and passports,
Shah told world leaders at the United Nations General Assembly in New York. As an urgent first step, we propose that we establish the Himalaya Climate Resilience Mechanism, led by Nepal, India, and China, so the Himalayas become a laboratory of international cooperation.
During Thursday’s session at the United Nations General Assembly, Shah appealed for international assistance in the form of grants to aid the Himalayan country in recovering from the glacial flood responsible for at least 1,450 fatalities. Speaking in New York four weeks after mountain communities were struck by the disaster, Shah noted that Nepal’s rebuilding and recovery expenses are calculated at roughly 10% of its gross domestic product, while maintaining that vulnerable nations should not be compelled to assume additional debt to recover from severe climate disasters. Advocating for enhanced collaboration among Nepal, India, and China regarding climate resilience, he called for the swift creation of a Himalayan framework to monitor glacial lakes, share satellite data, improve early-warning systems, and coordinate cross-border disaster management. The Nepalese prime minister characterized the flood—stemming from a glacier collapse near the Nepal-China border—as a stark warning of escalating climate change risks that destroyed homes, schools, roads, bridges, and livelihoods, thereby halting the nation’s development trajectory.
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