More than 45 years of experience

Local development fund programme

Project details
Donor organisation: 
Architecture & Urban Development
Project volume: 
1,566,600 €
Value of services: 
1,566,600 €
Start of project: 
December, 2011
End of project: 
May, 2016
Project description: 

The Local Development Fund (LDF) was established by the Malawi Government at the Ministry of Finance as an Inter-Governmental Fiscal Transfer mechanism through which Local Authorities can access financial resources for their local development. The LDF was established in accordance with the Public Finance Management Act 2003, in order to facilitate and respond to local development initiatives at Local Authority and Community levels.

The purpose of the LDF was to establish a nation-wide, sustainable, standardized and transparent financing mechanism, open for financing from the Government and Cooperating Partners (CPs), through which Local Authorities (LAs) could tap into funds for local public infrastructure projects, identified in a participatory process and prioritized in the respective Urban Development Plans. The funding was disbursed through four financing windows, namely the Community, Local Authority, Urban and Performance Windows.

Main activities were:

  • Construction of local public infrastructure (a.o. housing, markets, bus depots, sports stadiums, business complexes, roads) and ensuring the sustainable operation of the latter; and

  • Strengthening of the capacities of the LAs to plan, implement and operate the public infrastructure.

Service description: 
  • Overall programme management and coordination of activities;

  • Assist in design, tendering, contracting and supervision of infrastructure projects throughout Malawi;

  • Support the LDF Technical Support Team (TST) in the implementation of the LDF Urban Window programme;

  • Co-manage the disposition fund (jointly with the TST) according to the agreement between KfW and the LDF;

  • Monitor and provide advice for improving the Urban Window procedures; and

  • Transfer know-how to the TST and LAs.


The specific objectives of the LDF were:

  • To support participatory planning and management of development resources at the local council and community levels;

  • To protect financial resources for pro-poor development activities and service delivery at LA and Community levels;

  • To facilitate the implementation ofthe Integrated Rural Development Strategy;

  • To enhance the accountability of Local Authorities to their constituents;

  • To finance capacity enhancement of local governance institutions at National, LA and Community levels.