UNCDF in Mozambique

Advancing locally led adaptation through performance-based grants

Since 2014, Mozambique has implemented Performance-Based Climate Resilience Grants (PBCRGs) under the LoCAL Facility to integrate locally led climate adaptation into district and municipality planning and budgeting. LoCAL is currently the only mechanism in Mozambique channeling decentralized climate finance through SISTAFE, the national public financial management system, directly to local governments, where decisions on the use of funds are made at the decentralized level with active citizen involvement. Led by the – MF in close collaboration with the Ministry Planning and Development - MPD and the Ministry of Agriculture, Environment and Fisheries - MAEF, LoCAL is now active in 43 territorial units (36 districts and 7 municipalities) across 7 of the country’s 11 provinces.

To date, over $20 million has been transferred through eight PBCRG cycles, financing more than 200 climate-resilient investments including health centres, maternity wards, water supply systems, schools, and small weather stations operated by the LGs but connected to the national network and livelihood infrastructures. The remaining infrastructures for the last PBCRGs cycle in execution are expected to be delivered until June 2027. With donor support from European Union, Belgium, Sweden, Catalonia, and Switzerland, the programme has expanded in 2026 to Cabo Delgado and Sofala provinces. LoCAL also supports national policy dialogue on climate finance and decentralization, consolidating experience in 07 provinces for the 2023–2027 period.

Local development for peace consolidation – DELPAZ

Known as DELPAZ (Local Development for Peace Consolidation), the €29 million programme was launched in October 2021 as part of the European Union’s comprehensive support to consolidate the Maputo Peace and National Reconciliation Accord, signed between the Government of Mozambique and the National Resistance of Mozambique (RENAMO) in 2019.

Under the leadership of the government and with the support of the Austrian Development Agency (ADA), the Italian Agency for Development Cooperation (AICS), and UNCDF, DELPAZ aims to promote local economic development in communities previously affected by conflict in 14 districts across the provinces of Manica, Sofala, and Tete.

UNCDF worked with the Ministry of Finance and the Provincial Services of Economy and Finance to strengthen local governance capacity development interventions across the three provinces. It supported decentralized planning, monitoring and evaluation, communications and knowledge management.

With a special focus on women, youth, and demobilized RENAMO combatants and their families, DELPAZ contributes to more equitable social and economic development by supporting investments in economic infrastructure, improving access to public services, and promoting technology, climate-resilient agricultural practices, and entrepreneurship. DELPAZ officially ended its operations under the UNCDF portfolio, in December 2025.

Building Local Climate Resilience - MERCIM+

The Building Local Climate Resilience (MERCIM) programme was launched in 2019, replicating the LoCAL methodology in Gaza and Inhambane provinces and marking the start of the European Union’s collaboration with UNCDF in Mozambique. Led by the Government of Mozambique through the Ministry of Economy and Finance and the Ministry of Land and Environment, MERCIM had a budget of USD 5.5 million, co-financed by the European Union, the Catalan Agency for Development Cooperation (ACCD), and UNCDF.

From 2019 to 2022, MERCIM operated in the provinces of Nampula and Zambézia working with and through four local governments - districts, namely Memba, Mossuril in Nampula province and Mopeia and Morrumbala in Zambezia province implementing 26 climate-resilient projects that benefited more than 328,000 people, 54% of them women.

In December 2025, the European Union and UNCDF launched MERCIM+, expanding the programme to Cabo Delgado and Sofala. With a budget of USD 10 million (2026–2029), MERCIM+ will support 10 local governments and finance around 30 climate-resilient infrastructure projects benefiting approximately 500,000 people.

Across these initiatives, the United Nations Capital Development Fund continues to deploy innovative finance solutions to drive sustainable development and economic resilience in Mozambique.