LDC fund and graduation

Legal assistance paper

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Date produced: 03/12/2010

1. If an LDC graduates from LDC status to become a non-LDC developing country, can it still be eligible for funding under the LDC Fund?

2. If the answer to this question is that a Party accessing funding must be a LDC Party under the UNFCCC, are the criteria under the UNFCCC different from the general criteria for the identification of LDCs by the UN?

It does not appear that the LDC Fund, or the UNFCCC, has its own criteria for what constitutes an LDC. Therefore, any country that submits an application for funding from the LDC Fund for implementation of national adaptation programs of action, must meet the UN definition of a ‘Least Developed Country’ (LDC) at the time it makes the application.

If funds have been received by the applicant country or approved (but not been paid) as at the date of graduation, the funds will not be rescinded and will still be paid to the applicant country.

However, graduation has the following effects:

a. after the graduation date, the graduating country will not be able to make any further applications to the LDC Fund; and

b. any outstanding applications, for which funds have not yet been approved, will be discontinued and no funds will be approved.