A month after the catastrophic floods that struck Nepal, the country faces a potential surge in national debt. The 26 August debris flow from Langtang Lirung buried villages, altered river courses and killed more than 1,400 people. Scientists attribute the event’s likelihood to climate change, and the finance minister has warned that the death toll could exceed that of the 2015 earthquake.
Government damage estimates reach $4.8 bn ($3.6 bn), about 11 % of GDP. Nepal, which emits only about 0.1 % of global greenhouse gases, has called for grant‑based compensation as climate justice. The Loss and Damage Fund, created at COP27, has secured only $822 m in pledges, with $456 m paid, and a $20 m withdrawal cap per country, leaving a large gap that experts say will be financed through public debt.
Debt Justice analysis shows similar patterns elsewhere. Mozambique’s Cyclone Freddy lifted public debt by roughly $1.4 bn above IMF forecasts, and Pakistan’s 2010 floods pushed debt up by $36–71 bn over a decade. Nepal’s national debt has already risen from Rs 1.43 trillion in 2019/20 to nearly Rs 3 trillion, and the Asian Development Bank warns the floods will weigh on GDP.
Campaigners argue that wealthy nations must provide immediate, interest‑free debt suspensions and grant‑based relief. They call for reforms to the G20 debt‑relief framework and UK legislation to cancel unjust debts, emphasizing that climate‑induced disasters should not force low‑income countries into unsustainable borrowing.
