The Government of the Grand Duchy of Luxembourg and the United Nations Capital Development Fund entered into a framework agreement in 2008. The agreement recognized the important role UNCDF plays in the international development system through its mandate to help the Least Developed Countries (LDCs) achieve their development goals and the Programme of Action for the LDCs. The agreement was also an acknowledgement of the essential support UNCDF offers in the elaboration of public policies in developing countries to enable decentralization and local development, as well as to build inclusive financial sectors to support LDCs to achieve their sustainable development goals.

Luxembourg and UNCDF entered into a new framework agreement in 2021 that will encompass the duration of UNCDF’s Strategic Framework 2022-2025, and operate in accordance with Luxembourg’s General Development Cooperation Strategy “The Road to 2030”, an innovative multi-stakeholder partnership approach in the framework of the 2030 Agenda, including academia, research centres, civil society as well as the private sector. UNCDF and Luxembourg will focus in particular on the thematic areas of strategies around women's economic empowerment and gender, climate, and commitment to financial innovation to support the LDCs.