Least Developed Countries Fund

Least Developed Countries Fund

Summary

The Least Developed Countries Fund (LDCF) was established at the 7th Conference of the Parties of the UN Framework Convention on Climate Change (UNFCCC) in 2001 (COP7) to meet the adaptation needs of least developed countries (LDCs). Specifically, the LDCF has financed the preparation and implementation of National Adaptation Programmes of Action (NAPAs) to identify priority adaptation actions for a country based on existing information. LDCF is active in sectors including water, agriculture and food security, health, disaster risk management and prevention, infrastructure and fragile ecosystems. It also supports the implementation of National Adaptation Plans (NAPs), and the Least Developed Countries work programme under the UNFCCC. The Global Environmental Facility (GEF) administers the LDCF as a specialised trust fund and serves as a basis for programming resources.

Basic Description

Name of the Fund Least Developed Countries Fund (LDCF)
Official Fund Website http://www.thegef.org/gef/ldcf
Date Created
Date fund proposed: 2001
Date fund made operational: 2002
Proposed Life of Fund Undetermined.
Objectives The LDCF aims to address the needs of the currently 44 Least Developed Countries (LDCs), which are particularly vulnerable to the adverse impacts of climate change. A primary focus of the LDCF has been to support the preparation and implementation of National Adaptation Programmes of Action (NAPAs) – country-driven strategies that identify the immediate adaptation needs of LDCs, as well as the implementation of National Adaptation Plans (NAPs) and support for the LDC work programme under the UNFCCC. The LDCF’s main objectives, as outlined in the GEF Programming Strategy, are to:

  1. Reduce vulnerability and increase resilience through innovation and technology transfer for climate change adaptation
  2. Mainstream climate change adaptation and resilience for systematic impact
  3. Foster enabling conditions for effective and integrated climate change adaptation.

These objectives guide the LDCF’s efforts to enhance adaptive capacity, integrate adaptation into broader development policies, and create supportive environments for effective climate change adaptation.
Financial inputs and fund size As of November 2024, the cumulative pledges to the Fund amount to over USD 2.3 billion, with USD 2.2 billion paid into the LDCF trust fund.
The contributing countries are: Australia, Austria, Belgium, Canada, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Qatar, Romania, Slovenia, Spain, Sweden, Switzerland, United Kingdom and United States.
The contributions from donor countries are included as official development assistance (ODA).
Activities Supported The LDCF supports the preparation of National Adaptation Programmes of Action (NAPAs), which enable LDCs to identify priority activities addressing their urgent and immediate needs to adapt to climate change. Beyond preparation, the LDCF also finances the design, development, and implementation of adaptation projects on the ground based on NAPA priorities, as well as the implementation of adaptation actions under National Adaptation Plans (NAPs).
The fund targets sectors that are central to livelihoods and national development, including water resources, agriculture and food security, health, disaster risk reduction and prevention, and climate-resilient infrastructure. A significant portion of LDCF-supported projects also contributed to land degradation reduction and biodiversity management, reflecting the fund’s emphasis on ecosystem-based adaptation and sustainable development co-benefits.

Administrating Organization

Secretariat or Administrative Unit LDCF is administered by the GEF. The GEF Secretariat is based in Washington D.C. and is led by a Chief Executive Officer (CEO)-Chairperson, who is appointed for a four-year term (renewable once) by the GEF Council. The Secretariat has a staff of approximately 75 professionals and is divided into three administrative units: the Programmes Unit, the Policy, Partnerships, and Operations Unit and the Front Office (http://www.thegef.org/staff).
The GEF Secretariat is responsible for coordinating and overseeing the implementation of GEF programmes, ensuring that policies are effectively executed in collaboration with GEF Agencies. It facilitates interagency meetings to promote effective cooperation among these agencies. Additionally, the Secretariat coordinates with the secretariats of international environmental conventions for which the GEF serves as a financial mechanism, including the Convention on Biological Diversity (CBD), UNFCCC, Stockholm Convention on Persistent Organic Pollutants, United Nations Convention to Combat Desertification (UNCCD), and Minamata Convention on Mercury. It reports directly to the GEF Assembly and Council, implementing their decisions and providing regular progress updates.
Trustee The World Bank is the permanent trustee.

Fund Finance and Access Modalities

Conditions and Eligibility Requirements Eligibility is not restricted to ODA eligible countries. All Least Developed Countries that are part of the UNFCCC are eligible.
The list of eligible countries can be found at: https://unfccc.int/topics/resilience/workstreams/national-adaptation-programmes-of-action/ldc-country-information
Accessing the Fund
Access Modalities – Before accessing LDCF financing, LDCs historically were required to prepare and submit a NAPA to the UNFCCC Secretariat. While NAPA projects remain eligible, the scope of support has expanded under the current LDCF programming strategy to include National Adaptation Plans (NAPs) and other national adaptation frameworks.
LDCF project criteria are based on UNFCCC COP guidance and include:

  1. Country ownership: projects must be nationally identified priorities with stakeholder consultation
  2. Programme and policy conformity: alignment with LDCF strategy and stakeholder involvement
  3. Financing: includes cost-effectiveness and co-financing considerations
  4. Institutional coordination and support
  5. Monitoring and evaluation

To access funding, countries must work with one of the 18 accredited GEF Agencies, which submit proposals on their behalf. A project also requires endorsement by the country’s GEF Operational Focal Point.
LDCF provides Project Preparation Grants. Projects follow this sequence:

  • Submission of a Project Identification Form (PIF)
  • Council approval of the PIF
  • CEO endorsement of the final project document
  • Internal approval by the implementing GEF Agency

Additionally, Enabling Activities – such as the preparation of NAPs or national climate reports—are eligible for support under the LDCF.
Financial Instruments – Grants (as incremental cost finance to address climate change adaptation relative to a development baseline).
Accreditation process – Initially, only UN agencies and multilateral development banks were accredited as GEF Agencies. As part of an effort to broaden the number of GEF implementation partners, 2011 a pilot programme to accredit “up to ten” new agencies was launched. Applicant entities were reviewed in a three-stage process with an independent GEF Accreditation Panel assessing whether they meet the GEF’s fiduciary standards, as well as the GEF’s environmental and social safeguards, including on gender mainstreaming. Of the initial applicants, eight have successfully completed the accreditation process and been added as fully-accredited GEF Agencies. A recent review of the accreditation approach of the GEF confirmed that no further GEF Agency expansion is planned for the foreseeable future.
Overview of implementing entities – The LDCF works through formally accredited GEF Agencies. Among them are UN agencies, multilateral and regional development banks, national government institutions, and international and non-governmental organisations.
The complete list of the 18 GEF Agencies is available at: https://www.thegef.org/partners/gef-agencies
Nature of recipient country involvement – National ownership is central to the design of the LDCF. The fund emphasises stakeholder engagement during the preparation of NAPAs and supports country-driven approaches to identifying adaptation priorities.
To receive LDCF funding, a project must be endorsed by the country where it will be implemented. This endorsement is provided by the country’s GEF Operational Focal Point (OFP), who is designated by the government and responsible for:

  • Ensuring the project aligns with national climate and development priorities
  • Facilitating GEF coordination, integration, and consultation at the country level
  • Approving project submissions before they proceed through the GEF project cycle

The GEF also designates Political Focal Points (primarily for donor countries), but for LDCF-supported projects, the Operational Focal Point is the key liaison for project development and endorsement.
The complete list of GEF Focal Points is available at: http://www.thegef.org/focal_points_list

Allocation criteria – The total LDCF contribution for a Medium-Sized Project (MSP) cannot exceed USD 5 million, following the updated threshold adopted at the 66th GEF Council Meeting in 2024. If the LDCF contribution exceeds USD 5 million, the project is considered a Full-Sized Project (FSP).
Full-Sized Projects must undergo a longer and more comprehensive review process, which includes:

  • Submission and approval of a Project Identification Form (PIF) by the SCCF/LDCF Council
  • Followed by endorsement from the GEF CEO
  • And final approval through the implementing agency’s internal decision-making process.

In contrast, Medium-Sized Projects benefit from a streamlined review process, often requiring only CEO endorsement without Council submission, allowing for greater flexibility and faster implementation.
Safeguards, Gender and Indigenous Peoples
Safeguards – The GEF Policy on Environmental and Social Safeguards applies to all GEF-financed projects and programmes, including LDCF. The Policy sets out “mandatory requirements for identifying and addressing Environmental and Social Risks and Impacts in GEF-financed projects and programmes; and for documenting, monitoring and reporting on associated measures throughout the project and programme cycles, and at the portfolio level.” Agencies need to demonstrate that they have in place the necessary policies, procedures, systems and capabilities to meet the minimum standards 1 to 9:

  1. Environmental and Social Assessment, Management and Monitoring
  2. Accountability, Grievance and Conflict Resolution
  3. Biodiversity Conservation and the Sustainable Management of Living Natural Resources
  4. Restrictions on Land Use and Involuntary Resettlement
  5. Indigenous Peoples
  6. Cultural Heritage
  7. Resource Efficiency and Pollution Prevention
  8. Labour and Working Conditions
  9. Community Health, Safety and Security.
Gender – All GEF-financed projects and programmes are subject to the 2017 GEF Policy on Gender Equality and the 2018 Gender Implementation Strategy The objective of the policy is to establish guiding principles and mandatory requirements for mainstreaming gender across GEF’s governance and operations, with a view to promoting gender equality and the empowerment of women and girls in support of the GEF’s mandate to achieve global environmental benefits.
The policy sets out mandatory requirements in four key areas:

  1. Project and programme cycle: integrating gender considerations throughout identification, design, implementation, and evaluation
  2. Monitoring, learning, and capacity development: ensuring mechanisms to track gender-related outcomes and enhance institutional capacity
  3. Agency policies, procedures, and capabilities: requiring GEF agencies to demonstrate policies, systems, and expertise to support gender equality
  4. Compliance: establishing measures to ensure consistent application of the policy and reporting on gender results.

In addition, the policy requires GEF agencies to meet seven minimum standards that support effective gender mainstreaming across their operations.
Indigenous Peoples – The GEF requires all participants to respect the principles set out in the GEF Policy on Environmental and Social Safeguards. Standard 5 of this policy addresses the rights and interests of Indigenous Peoples. When GEF-financed projects may cause adverse impacts on land and natural resources subject to traditional ownership or use, impact cultural heritage, result in the relocation of Indigenous Peoples, or affect their governance systems, the Free, Prior, and Informed Consent (FPIC) of the affected Indigenous Peoples is required.
Participants must demonstrate that they have the necessary policies, procedures, systems, and capabilities in place to ensure effective engagement with Indigenous Peoples, to provide access to mitigation and compensation where adverse impacts are unavoidable, and to establish appropriate grievance and conflict resolution mechanisms.
In addition, the GEF Principles and Guidelines for Engagement with Indigenous Peoples provide operational guidance to enhance the effectiveness of GEF-financed activities while ensuring the protection of Indigenous Peoples’ rights and the delivery of long-term benefits.
A comprehensive overview of the GEF’s strategy and engagement with Indigenous Peoples is available at: https://www.thegef.org/what-we-do/topics/indigenous-peoples

Fund Governance

Decision Making Structure As a specialised trust fund, the LDCF falls under the governance structure of the GEF. The GEF governance structure is composed of the Assembly, the Council, 18 Agencies and a Scientific and Technical Advisory Panel. Decisions on the LDCF and its sister fund, the Special Climate Change Fund (SCCF), are made by the GEF Council meeting convening as the LDCF/SCCF Council in separate sessions during GEF Council meetings. Assembly The Assembly is composed of all 184-member countries or Participants. It is responsible for reviewing general policies, reviewing and evaluating the GEF’s operation based on reports submitted to Council, reviewing the membership of the Facility and considering amendments to the Instrument for the Establishment of the Restructured Global Environment Facility. Council The GEF Council is the governing body for the GEF. The Council is comprised of 14 members from donor constituencies and 18 from recipient constituencies (a total of 32 GEF members) and makes decisions by consensus. The Council adopts and evaluates the operational policies and programmes, and reviews / approves the projects submitted for approval. The list of Council Members and Alternates can be found at: https://www.thegef.org/council_members_alternates
Agencies The GEF Agencies work with project proponents to design, develop and implement GEF projects and programmes. The list of GEF Agencies is available at: https://www.thegef.org/partners/gef-agencies
Scientific and Technical Advisory Panel (STAP) The STAP provides scientific and technical advice on policies, operational strategies, programmes and projects. It is composed by six internationally recognised experts who are supported by a global network of experts and institutions.
Accountability Mechanisms Independent Evaluation Office
LDCF impact and effectiveness is evaluated by the GEF Independent Evaluation Office (IEO). This office is headed by a Director responsible for coordinating a team of specialised evaluators. The Director is appointed by and reports directly to the Council. Further information can be found on the GEF IEO website.
A joint independent evaluation of the LDCF was completed in 2011. It highlighted the problems caused by a lack of predictable finance for the LDCF and its low levels of capitalisation. It further highlighted the need for streamlined project cycles and to make the fund easier to access. More generally, the actual inclusiveness and effectiveness of the NAPA process has been the topic of substantial critique and debate.
Since then, several evaluations have been conducted to assess and improve the LDCF’s performance:

  • 2020 Programme Evaluation of the LDCF: This evaluation provided an in-depth analysis of the fund’s relevance, effectiveness, efficiency, sustainability, and additionality over a four-year period
  • LDCF/SCCF Annual Evaluation Reports: Annual reports, such as those from 2023 and 2024, offer ongoing assessments of project outcomes, sustainability, and monitoring and evaluation practices.

Complaints Procedures

  • Local or Country-Level Dispute Resolution Systems: Individuals and communities are encouraged to first utilise local or national mechanisms to address grievances related to GEF-funded projects. These systems are often more accessible and can provide culturally appropriate resolutions
  • GEF Partner Agency Mechanisms: Each GEF Partner Agency is required to have its own accountability, grievance, and conflict resolution mechanisms. These mechanisms are designed to respond to complaints from project-affected people and communities, including concerns about potential policy non-compliance. They operate independently of the management and staff involved in project design and implementation, ensuring impartiality
  • GEF Conflict Resolution Commissioner: In addition to the mechanisms provided by Partner Agencies, the GEF has established the role of the Conflict Resolution Commissioner. This Commissioner is available to receive complaints related to GEF-financed projects and programmes, facilitating actions among relevant parties, including complainants, Agencies, recipient countries, and other stakeholders.
  • GEF Policy on Environmental and Social Safeguards: The elements of the GEF’s conflict resolution system are outlined in the GEF Policy on Environmental and Social Safeguards. This policy sets forth minimum standards for accountability, grievance, and conflict resolution mechanisms that GEF Partner Agencies must adhere to, ensuring that affected individuals and communities have access to effective avenues for addressing their concerns.
Participation of Observers and Stakeholders GEF presents itself as a country driven organisation that was “founded on the principles of collaboration and partnership”. Member countries are referred as Participants that are represented on the GEF Council by 32 Constituencies each one having a Council Member and an Alternate Council member.
In 2017, the Council approved an updated Policy on Stakeholder Engagement which sets out “the core principles and mandatory requirements for GEF agencies to meaningfully engage stakeholders in GEF programmes and projects to build on a broad base of local knowledge and expertise, and foster local engagement and ownership in support for positive global environment outcomes”. The Policy presents mandatory requirements for stakeholder engagement throughout the GEF project cycle.
Civil Society Organisations (CSOs) are considered key partners for identifying, executing and monitoring GEF programmes and projects. GEF encourages civil society stakeholders to comment on project proposals, comment on policies, support and monitor project implementation, participate in GEF events. In addition, sponsored CSOs can attend the Council Meetings to relay the voices of CSOs from the field and maintain engagement on policy issues. Sponsored CSOs are selected in consultation with the CSO network, Operational Focal Points, the Indigenous Peoples Advisory Group and the GEF Small Grants Programme.
Indigenous Peoples have their own Advisory Group. This group was established in 2012 to enhance coordination between the GEF and Indigenous Peoples. The Group’s objective is to provide “advice to the GEF Indigenous Peoples Focal Point on the operationalization and reviewing of the Principles and Guidelines for Engagement with Indigenous Peoples and to provide guidance on financing options for Indigenous Peoples”.
Since 1995, CSOs have coordinated input via the GCF CSO Network, representing 600 CSOs from 122 countries, which is supported by the GEF Secretariat administratively.
The Programming Paper for Funding the Implementation of NAPAs under the LDC Trust Fund further explicitly requires stakeholder consultation in the formulation of NAPAs and subsequent project implementation, which is supportive of a high level of local stakeholder involvement. Regarding governance, the Rules of Procedure for the LDCF/SCCF Council allow for observer participation. Specifically, any Council Member may choose to participate in the LDCF/SCCF Council or attend as an observer. This provision facilitates broader involvement in the decision-making processes of the LDCF.
Transparency and Information Disclosure The GEF Policy on Access to Information sets out the principals and mandatory requirements for the public accessibility of Council Information and fully applies to the LDCF.
The Financial Status Report contains the information on the progress of donor contributions and is available with other Council documents (SCCF/LDCF Council Meetings) at: https://www.thegef.org/council-meetings Detailed information about LDCF projects is included in the GEF project listing tool http://www.thegef.org/projects
Other Issues Raised