Objectives and approach
Building resilient economies
UN Capital Development Fund aims to increase the amount of finance available to local governments for climate change adaptation and increase private sector investment in resilience-building.
In line with our new Strategic Framework 2026-2029, we are broadening our offer to Least Developed Countries, Small Island Developing States and African Nations through the Local Climate Adaptive Living (LoCAL) Facility, which now includes a new private sector window.
LoCAL+
LoCAL+ continues to provide a standard internationally recognized mechanism that helps local government authorities in developing and least developed countries access the climate finance, capacity building and technical support they need to respond and adapt to climate change.
LoCAL+ applies principles of fiscal decentralization and effective local planning and public financial management to climate change. It combines performance-based climate resilience grants (PBCRGs), which ensure programming and verification of climate change expenditures at the local level, with technical and capacity-building support.
Performance-based climate resilience grants finance the additional costs of making investments climate resilient, and are channelled through existing government fiscal transfer systems (rather than parallel or ad hoc structures). International climate finance is channelled through national treasuries — right down to the local level. National ministries are involved in regulating the system.
LoCAL+ works directly with national partners, who are responsible for activities through each phase:
Design Phase.
A formal expression of interest from a prospective partner country launches a preliminary analysis of entry points.
Phase I: Piloting.
The first phase involves initial scoping, followed by testing in two to four local governments.
Phase II: Learning.
The second phase takes place in 5–10 percent of the local governments of a country. It involves collecting lessons and demonstrating the effectiveness of the mechanism at a larger scale.
Phase III: Scaling-up.
The third phase is a full national roll-out of LoCAL+ based on the results and lessons of the previous phases. LoCAL+ is gradually extended to all local governments, with domestic or international climate finance, and becomes the national system for channelling adaptation finance to the local level.
LoCAL, the Global Standard for Financing Local Adaptation to Climate Change
In 2022, ISO 14093:22 “Mechanism for financing local adaptation to climate change — Performance based climate resilience grants — Requirements and guidelines”, was developed using the methodology and experiences of the UN Capital Development Fund (UNCDF) and countries implementing the Performance Based Climate Resilience Grants that remain part of LoCAL+.
ISO 14093:22 is applicable to organizations such as national and subnational authorities, donors, companies, financial institutions and international organizations that are involved in implementing a country-based mechanism for channeling climate finance to subnational authorities to support climate change adaptation and resilience.
UNCDF is uniquely positioned to leverage its derisking tools to crowd in domestic finance to invest in adaptation-focused micro- small- and medium-sized enterprises (MSMEs). This work builds on UNCDF's experience with local governments, which can have an enabling and coordinating role in supporting MSME ecosystems.
LoCAL+ aims to de-risk investments in locally-led adaptation, in partnership with national development banks and local financial institutions, supporting stronger local governments to deliver resilient infrastructure. Priority green investments will include: climate-smart agriculture, renewable energy, water and sanitation, ecosystemservices, and nature-based solutions.