Commitments from the Swedish International Development Cooperation Agency (Sida) and the Grand Duchy of Luxembourg Will Support the Last Mile Finance Trust Fund (LMF-TF)

The UN Capital Development Fund (UNCDF)—the UN’s flagship catalytic financing entity for the world’s 46 least developed countries (LDC)—secured new financial commitments for its trust fund dedicated to sustainable development for the world’s least developed countries (LDCs), which brings the total finance pool for the fund to more than USD 80 million.

Overseen by UNCDF, the Last Mile Finance Trust Fund (LMF-TF) is a multinational trust fund that pools flexible funding from donor countries to support the achievement of the Sustainable Development Goals (SDGs) in the world’s least developed countries.

The Swedish International Development Cooperation Agency (Sida) announced its financial commitment for 2023 & 2024 to the LMF-TF, amounting to USD 13~ million (SEK 138 million). Since the creation of the LMF-TF in 2022, the total contributions from Sida are valued at roughly USD 40 million (SEK 419 M).

The Grand Duchy of Luxembourg supported the LMF-TF for the second year in a row with a financial commitment of USD 1.7 million (EUR 1.5 million). Luxembourg’s funding will be directed into the Climate, Energy and Biodiversity window of the fund, specifically towards UNCDF’s work on locally led climate adaptation supported by the Local Climate Adaptive Living Facility (LoCAL). LoCAL is 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.

“Sida is very happy with UNCDF’s work through the Last Mile Finance - Trust Fund (LMF-TF), specifically the high level of innovation it has been able to foster to achieve the SDGs in the world’s least developed countries (LDCs). We believe that lightly earmarked thematic funds provides UNCDF with the ability to remain agile in relation to a rapidly changing context. We also see the LMF-TF as a great platform for different donors to come together and deliver impact at scale by leveraging UNCDF’s operations in LDCs. The focus on the poorest countries is extremely important with the current poverty levels and something of strategic importance to Sida,” said True Schevdin, Head of Unit, Global Sustainable Economic Development, Sida.

“Luxembourg contributed to the LMF-TF for the first time in 2021 and we are satisfied with this financing vehicle which proved to be highly efficient. UNCDF’s LoCAL facility is an effective mechanism for locally led climate adaptation, which is why we see a lot of demand for it from LDC’s. We believe that our contribution will help LoCAL grow even further.” – René Lauer, Director for Multilateral Cooperation.

The LMF-TF was launched in 2016 with an initial disbursement of USD 2.5 million from Sida. Since the launch of fund, the LMF-TF has grown to include nine donors with a total financing pool now exceeding USD 80 million. Today, the LMF-TF finances sustainable development across six themes: local finance, digital economy, financial innovation, women’s economic empowerment, climate/clean energy/biodiversity finance and sustainable food systems.

Results achieved under the LMF-TF in 2021 (2022 results will be released later this year) include supporting over 3 million micro-merchants with digital solutions, supporting national financial inclusion strategies in 14 countries, catalyzing over USD 4 million for local transformative investments, piloting our programme to promote inclusive economic development for women in three countries, directly raising USD 25 million for locally-led climate adaptation, and supporting partners in the sale of roughly 400,000 clean energy products in Uganda and Ethiopia alone.

As the UN’s flagship catalytic finance entity for the world’s 46 least developed countries, UNCDF administers the LMF-TF. UNCDF’s vision is for LDCs to be able to access and leverage the development impact of capital to enable sustainable and inclusive economic growth and achieve the Sustainable Development Goals. Anchored in the 2030 Agenda, UNCDF will work to achieve a future where poverty is eradicated in all its forms and dimensions, where people in LDCs live in dignity and can access finance, key services and goods through strong institutions, a vibrant private sector and diversified local economies that have a net positive impact on the environment.