All Principal Recipients (PRs) are responsible for supporting development of the capacity of their Sub-recipients (SRs). Capacity development of national institutions, in particular, is a core mandate of UNDP and the ultimate aim of its technical assistance. UNDP works to build the skills, knowledge and experience of SRs so that they can implement Global Fund programme activities. Capacity development of SRs can take place throughout the lifetime of the SR agreement. It should be funded through the Grant Agreement, and UNDP CO can also contribute its own resources. It should build on the priorities, policies and desired results mutually identified by the UNDP Country Office (CO) and the SR.

Based on the results of the capacity assessment, budget availability and discussions with the SR, the UNDP CO and SR should create a capacity development plan, to be annexed to the SR agreement, addressing in detail how capacity will be developed in the identified areas of weakness, and how organizational capacities will be maintained and strengthened in other areas. Special focus should be placed on capacity development of national entities that are identified as potential future PRs.

Some SRs may ask UNDP to participate in the selection of key SR staff. Following a formal request from the SR, UNDP may participate as a non-voting member of the panel in the interview and selection of SR staff.