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United Nations Department of Economic and Social Affairs Sustainable Development

United Nations Capital Development Fund (UNCDF)

1. What decisions or new strategies has the governing body of your organization taken to guide the implementation of the 2030 Agenda and the SDGs? Please provide a brief summary below, including the overarching vision of your governing body for the Decade of Action on the SDGs.

Following a year of extensive consultations with its Executive Board members and observers in 2017, the Executive Board took note of and endorsed the UNCDF Strategic Framework, 2018-2021 at its first regular session in 2018.

The Strategic Framework emphasizes that UNCDF will pursue innovative finance solutions through: (a) financial inclusion that expands the opportunities for individuals, households, and small and medium-sized enterprises to participate in the local economy, with a focus on digital financial services; and (b) local development finance that shows how fiscal decentralization, municipal finance, and structured project finance can promote local economic expansion and local climate adaptation; and c) strengthening its lending and guarantee instruments alongside its grants and technical assistance. Women’s economic empowerment is articulated across all UNCDF work.

The Strategic Framework and the accompanying Integrated Results and Resources Framework is aligned with the 2030 Agenda. By strengthening how finance works for poor people at the household, small enterprise, and local government levels, UNCDF contributes to Sustainable Development Goal-SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a broad diversity of SDGs. The Strategic Framework also responds to the Addis Ababa Action Agenda; the Paris Agreement on climate change; and the New Urban Agenda. A mid-term review of the Strategic Framework is being undertaken in 2020, which will seek to further sharpen UNCDF’s support to the Decade of Action and the area of mobilizing adequate and well-directed financing.

2. At the secretariat level, what steps has your organization taken (or will it take) in the follow-up to the 2030 Agenda and the SDGs? Please specify actions, including but not limited to the following areas:

2.1 SDG-specific strategies, plans or work programmes;

  • UNCDF is the only United Nations entity with a capital mandate and the ability to deploy loans and guarantees to both public and private entities in the last mile in LDCs. To strengthen its ability to deploy these types of instruments, UNCDF established the “Least Developed Countries Investment Platform” (LDCIP) in 2017. The LDC Investment Platform provides seed funding (through grants, reimbursable grants, loans, and guarantees) to SDG positive investments in LDCS that are deemed too small or too risky by traditional investors, with a focus on small and medium-sized enterprises and local infrastructure projects. The UNCDF investments de-risk the transactions and “prime the pump” for domestic and foreign investors to come in.
  • UNCDF’s Strategic Framework 2018-2021 is aligned with the 2030 Agenda, primarily focusing on sustainable development goals 1, on poverty eradication, and 17, on the means of implementation. UNCDF contributes to a wide diversity of other goals by identifying where innovative financing solutions can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access. At the programme level, all new programmes are aligned with at least one SDG.
  • In 2018, UNCDF adopted a Strategy on Gender Equality and the Empowerment of Women (2018-2021). The strategy aims to provide a framework for both i) strengthening programming on gender equality and driving the empowerment of women in alignment with UNCDF’s overall Strategic Framework; and ii) to continuously strengthen UNCDF’s internal approach to gender equality and empowerment of women. Overall, some 52.7 per cent of UNCDF programme expenditures in 2019 provided a significant or a principled contribution to women’s empowerment.
  • In 2019, UNCDF adopted a new strategy on “Leaving no one behind in the digital era” to expand its financial inclusion work, which is currently operating in 37 countries. This strategy outlines UNCDF’s approach to supporting digital financial inclusion and the development of inclusive digital economies and summarizes the objectives and contributions of UNCDF’s financial inclusion practice to the SDGs.

2.2 Aligning the structure of the organization with the SDGs and the transformative features of the 2030 Agenda, including any challenges and lessons learned in doing so;

UNCDF has aligned all of its programmes to the SDGs and is working to ensure integrated responses to the specific SDGs and targets to which it contributes. That said, the interconnected nature of the SDGs, especially at the target level, can make it challenging to identify one-to-one SDG linkages at the programme and activities levels.

2.3 Readjusting or updating results-based budgeting and management, including performance indicators;

UNCDF's Integrated Results and Resources Matrix for 2018-2021, which is annexed to the new Strategic Framework and runs concurrently with it, as well as the accompanying Theory of Change, are aligned with the SDGs. Together, they articulate how UNCDF's programmes and interventions will support SDG achievement and also provide the tools to monitor, measure, and report on progress.

2.4 Action to enhance support to the principle of "leaving no one behind" and to integrated policy approaches;

UNCDF's Strategic Framework and its programmes are designed to focus on the 'last mile' in LDCs, which refers to the localities, men and women; small and medium-sized enterprises; and local governments that are underserved and excluded; where development needs are greatest; and where finance flows are most scarce. The Theory of Change annexed to the new Strategic Framework details UNCDF's approach to targeting poor and vulnerable populations to reach the last mile.

UNCDF’s three practice areas are explicitly focused on the last mile and leaving no one behind:

  1. Inclusive digital economies that connect individuals, households, and small businesses with financial eco-systems that catalyze participation in the local economy, provide tools to climb out of poverty, and manage their financial lives;
  2. Local development finance that capacitates local authorities through fiscal decentralization, innovative municipal finance, and structured project finance to drive climate-resilient local economic expansion and SDG achievement;
  • Investment finance that provides catalytic financial structuring, de-risking, and capital deployment to drive SDG impact at the local level, with a focus on SDG positive SME development and municipal infrastructure projects.

2.5 Action to address the interlinkages across SDG goals and targets;

See 3.8

2.6 Others.

N/A

3. What normative, analytical, technical assistance or capacity building activities is your organization providing to support the implementation of the 2030 Agenda and the SDGs? Please provide a brief account of the activities you have organized or intend to undertake, including but not limited to the following areas:

3.1 Enhancing national implementation including by supporting the mainstreaming of the SDGs in development plans and policies or through national sustainable development plans/strategies;

As active contributors to the work of UN Country Teams (UNCTS) where it is present, UNCDF supports broader UN efforts at the policy, analytical, and capacity building levels to ensure that the SDGs and targets to which it contributes are reflected in national development plans. UNCDF is also increasing its engagement with and support to UNCTs to define last mile SDG financing strategies, and include innovative finance methods and a last mile focus in countries’ Integrated National Financing Frameworks.

3.2 Mainstreaming the SDGs in sectoral strategies, including specific SDG/target strategies;

UNCDF provides policy, analytical, and capacity building support to ensure that SDGs and targets related to its work on financial inclusion, local development finance, and investment finance are reflected in relevant sectoral strategies.

3.3 Supporting the strengthening of national institutions for more integrated solutions;

UNCDF focuses much of its work at the sub-national level, working with local governments and municipalities. However, in many countries this includes working with relevant national level authorities with responsibility for supporting sustainable development at local level. For example, in order to support local governments to access more climate finance, UNCDF is supporting partner national entities to prepare for direct access to international climate funds. In 2019, two UNCDF partners – the National Committee for Subnational Democratic Development Secretariat in Cambodia and the National Fund for Environment and Climate in Benin – were approved as direct access accredited entities of the GCF. UNCDF is also providing support to national entities in Bhutan, Mali, and the United Republic of Tanzania to achieve accreditation for the GCF to unlock financing for local climate responses.

UNCDF also has a long history of designing, implementing, and helping LDC governments scale fiscal decentralization models to empower cities and local governments to invest in local infrastructure. In doing so, it works with local governments and relevant national institutions, including ministries of finance, planning, central banks, national development banks, etc.

3.4 Data and statistical capacity building;

UNCDF uses data, diagnostics, and analyses to identify 'pain points' and unmet needs where the lack of access to finance holds back development. Specifically, through its data and analysis, demonstration effects, and advocacy, UNCDF supports policy change that leads to improved local government financing systems and legislation. In addition, UNCDF has developed data-driven diagnostics that reveal markets and trends and empower governments to define financial inclusion strategies tailored to their circumstances and needs. These tools create strong national platforms for donor coordination and private sector engagement. UNCDF will continue to deploy such approaches to build capacities and reinforcing coordination among stakeholders, especially regulators and financial service providers.

3.5 Harnessing science, technology and innovation for the SDGs;

In financial inclusion, digital innovations have revolutionized the way financial services are provided and used, and have created new business models to expand access to basic goods and services. Leveraging this digital revolution, UNCDF seeks to address a growing range of 'real economy' challenges linked to the SDGs, such as improving agriculture productivity for smallholder farmers and value chain actors, enabling access to clean energy and other basic services, and supporting micro-, small and medium-sized enterprise growth, including in such sectors such as the 'fintech' industry. These interventions especially target women and youth.

UNCDF also uses its capital tools and technical assistance to incentivize financial services providers to design and deliver client-centric product innovations using alternative delivery channels - such as rural agents, mobile phones, point-of-sales devices, and informal community groups - to reach underserved populations, especially women, youth, and smallholder farmers. UNCDF support to financial service providers and other partners seeks a demonstration impact that will help other service providers to replicate successful innovations. By creating regulatory sandboxes and physical spaces for companies to pilot smart products and delivery channels - such as innovation labs in Uganda, Malyasia, and the Pacific - UNCDF helps accelerate innovations that can reach the un-and under-banked with new services.

In local development finance, UNCDF collaborates with governments and other partners, often through multiple generations of innovations, first to create viable models and then to help them scale approaches to fiscal decentralization, project finance, and municipal finance. This can lead to increased local revenue through taxes and fees, second-round benefits through growing local economies, and improvements in the accountability of local tax collection and administration.

3.6 Multi-stakeholder partnerships;

UNCDF works with UNDP and other United Nations entities to introduce more integrated approaches to making finance work for inclusion. UNCDF collaborates with other entities where the combination of its capital tools and expertise and the sector or thematic knowledge of other organizations can help tackle last-mile exclusions and have transformative impact.

UNCDF continues to engage with international financial institutions (IFIs) to maximize replication and scale potential, including collaborating with regional banks on market development approaches in financial inclusion and ecosystems for digital payments. UNCDF seeks to partner strategically with IFIs to deploy financial instruments in ways that harness the respective comparative advantage of each entity in support of least developed countries.

UNCDF works with a wide range of private sector actors as innovators, implementing partners, and potential donors. This includes investing and partnering with financial service providers; mobile network operators; domestic banks; pension funds; small and medium-sized enterprises; foundations; and impact and other investors to expand the reach of finance in local economies. This also includes innovative collaborations with asset managers to establish two new third party managed blended finance funds to mobilize and deploy capital to SMEs and municipal infrastructure projects in LDCs.

3.7 Bolstering local action and supporting sub-national plans/strategies and implementation for the SDGs;

While the 2030 Agenda is global, it will ultimately be implemented at the local level with the participation of local governments and local stakeholders. In its local development finance work, UNCDF focuses on innovating finance models to support localities and excluded populations. In supporting LDCs to build inclusive, resilient economies, UNCDF works to transform economies by promoting service delivery, infrastructure investment, and local economic development that retains value within a local territory. UNCDF’s seed capital investments and technical assistance focuses on helping localities build local fiscal space and boost local fixed capital formation.

Working with local governments, domestic banks, and local businesses, UNCDF provides evidence-based in-country analysis that informs the local development processes in the fields of fiscal decentralization, local public finance, and own resource revenues.

To create the demonstration effects needed to support wider shifts in SDG financing, UNCDF help LDCs design and pilot financing mechanisms and business models that support locally-designed public investments and revenue-generating capital investment projects that address specific development bottlenecks.

For example, UNCDF combines its expertise in fiscal decentralization and climate finance to deploy the Local Climate Adaptive Living Facility (LoCAL) mechanism. As of 2019, UNCDF introduced and strengthened the mechanism in 14 countries, engaging with 280 local governments representing over 10 million people. The UNCDF mechanism was recognized by the UNFCCC in 2019 as a technical guidance tool in localizing National Adaptation Plans in LDCs.

In 2017, UNCDF and UN-DESA/Financing for Development Office published "Financing for Sustainable Urban Development in the Least Developed Countries". The publication is designed to promote knowledge sharing amongst stakeholders in urban finance and local sustainable development. Its prime objective is to support government officials in LDCs at the local and national levels to strengthen their urban finance frameworks.

3.8 Leveraging interlinkages across SDG goals and targets;

Through its work on finance solutions, many UNCDF programmes by design impact on a number of SDGs. For instance, investments in feeder roads can get goods to market faster, enable women to reach markets, and improve access to basic services. Similarly, access to savings and insurance can protect families against loss and medical expenses, and free them to make educational and entrepreneurial investments to transition out of poverty.

UNCDF also actively promotes access to clean energy solutions in LDCs by providing financial innovations that make clean energy technology affordable to the poor, including through digital payment solutions. Access to energy helps achieve numerous other development goals, including health, education, gender equality, economic development, agriculture development, and access to water and irrigation for agriculture activities.

3.9 Supporting policies and strategies to leave no one behind;

See answer for 2.4

3.10 Supporting the mobilization of adequate and well-directed financing;

UNCDF works to make public and private finance work for the poor. As mentioned under 2.4 above, UNCDF focuses on improving access to finance through three key approaches:

i) supporting financial inclusion and inclusive digital economies, to help connect individuals, households, and small businesses with financial eco-systems that catalyze participation in the local economy, and provide tools to climb out of poverty and manage financial lives. Strengthening financial inclusion and digital finance can also help countries mobilize domestic resources that can be used for sustainable development investments, for example through increased savings and improved tax collection.

ii) strengthening local development finance, which capacitates local authorities through fiscal decentralization, innovative municipal finance, and structured project finance to drive local economic expansion, climate-resilient infrastructure and broader SDG achievement. This includes support to local governments to increase access to different sources of climate finance. Through its LoCAL programme, UNCDF has supported 284 local governments in 14 countries for the systemic localization of the Paris Agreement, mobilizing USD 80 million in grants and technical assistance and resulting in 600 local adaptation projects.

iii) investment finance that provides catalytic financial structuring, de-risking, and capital deployment to drive SDG impact at the local level with a focus on SDG positive SME development and SDG enabling and climate resilient municipal infrastructure projects. For example:

  • UNCDF provides grants, concessional loans and guarantees for early and growth stage enterprises in LDCs that are too big for microfinance and too small for banks and development finance institutions. Enterprises in the energy, agriculture and financial sectors have been supported, enabling them to access additional commercial finance. To expand this type of early stage financing for enterprises and small revenue generating infrastructure projects, the organization is looking to establish a UNCDF managedLDC Investment Fund (on its balance sheet) capitalized with US$ 50m, as outlined in its Strategic Framework 2018-2021.
  • UNCDF has partnered with Geneva-based fund manager Bamboo Capital Partners to announce the BUILD Fund, a blended finance fund managed by Bamboo that will provide growth capital to the “missing middle” of SDG-positive businesses in the LDCs, i.e. early and growth stage companies with capital needs from $250,000 to $5,000,000. UNCDF helps prepare a pipeline of investable enterprises for this Fund.
  • In 2020, UNCDF will launch a third-party managed fund for municipal infrastructure (the International Municipal Investment Fund) in partnership with a global asset manager specializing in long-term public infrastructure projects. The targeted capitalization for this Fund is EUR 350m. UNCDF will help prepare a pipeline of viable projects for this fund and continue to provide technical assistance, policy guidance, and capacity building to municipalities.

3.11 Reducing disaster risk and building resilience;

See section 3.7 for UNCDF’s work to promote access to local climate finance for local climate adaptation and climate resilient infrastructure.

A coordinated COVID-19 response. As the full reality of COVID-19 emerges in 2020, UNCDF has moved quickly to define and roll out a support offer to assist least developed countries to respond to and recover from the pandemic. The offer is based on UNCDF’s core mandate to make finance work for the poor and to build stable and resilient local economies in LDCs.

Specifically, UNCDF provides support to countries and other actors to deal with the COVID-19 crisis by: (a) deploying digital innovations in areas such as payments, e-commerce, education, contact tracing and data harmonization; (b) channeling finance to subnational authorities to boost capacity for quick local response and recovery; and (c) injecting targeted investment funds into small and medium enterprises (SMEs) to stabilize local economies and accelerate recovery.

3.12 Supporting international cooperation and enhancing the global partnership;

UNCDF engages in and supports international cooperation and global partnerships in numerous areas relevant to its mandate and work programmes. For example:

  • The preparatory process for the Fifth United Nations Conference on the LDCs (UNLDC-V) in 2021 provides a unique opportunity to renew the global partnership for LDCs and highlight the need for new approaches to finance sustainable development in the LDCs. UNCDF is engaging closely to support OHRLLS and the preparatory process for UNLDC-V and will continue to support LDCs under the new agenda, including for smooth transition of graduating countries.
  • UNCDF engages closely in the work of the UN Secretary-General’s Global Investors for Sustainable Development (GISD) alliance, established to find ways to attract private sector capital to help finance the 2030 Agenda. Within the Alliance, UNCDF works to keep a focus on new ways to channel private sector finance to LDCs.
  • UNCDF helps raise global awareness of and foster global cooperation in the area of blended finance for the LDCs. Together with the Organisation for Economic Cooperation and Development (OECD) and other partners, it has issued global reports on this topic in 2018 and 2019. A third edition of the report is planned for 2020.
  • The World Observatory on Subnational Government Finance and Investment (SNG-WOFI) is a multi-stakeholder initiative launched in 2016 and led by OECD and United Cities and Local Government (UCLG) with support from UNCDF and other partners. The Observatory produces the largest international database on subnational government structure and finance.

3.13 Others.

4. The high-level political forum (HLPF) is the central platform for the follow-up and review of the 2030 Agenda and the SDGs. Has your organization participated in or supported the work of the HLPF? If yes, please specify your involvement in the following areas:

4.1 Supporting the intergovernmental body of your organization in contributing to the thematic review of the HLPF;

4.2 Contributing to policy/background briefs for the HLPF;

UNCDF has contributed to a number of inter-agency processes which have prepared background papers for the HLPF, including the IATF and the FfD reports. UNCDF has also supported LDC governments to prepare voluntary national reviews (VNRs) for the HLPF.

4.3 Helping organize SDG-specific events in the preparatory process;

UNCDF has organized a number of events in the run up to the HLPF on a number of different SDGs, always with an angle on how to drive more SDG finance to LDCs.

4.4 Organizing side events or speaking at the HLPF;

UNCDF has organized and taken part in a number of side events at the HLPF, specifically around financial inclusion, municipal finance, and the financing needs of LDC governments and businesses.

4.5 Supporting the VNR process.

UNCDF has developed internal guidance to support national VNR processes. As part of the Ethiopia UNCT, UNCDF has also provided financial support to the National Planning Commission to help prepare the first Ethiopia VNR.

5. How has your organization cooperated with other UN system organizations to achieve coherence and synergies in the implementation of the 2030 Agenda and the SDGs? In this regard, has your organization launched or intend to launch any joint programmes or projects in collaboration with other UN entities? Are there any results or lessons you would like to highlight that might help improve the design and impact of such efforts? Has your organization participated in any of the following coordination systemwide mechanisms or any other relevant platform - CEB, UNSDG, EC-ESA Plus, regional coordination meetings, UN-Energy, UN-Water, UN-Ocean, IAEG, IATT? Please specify which and indicate any suggestions you may have about improving collaborations within and across these mechanisms/platforms.

UNCDF looks to UNDP as its primary partner on SDG implementation. The synergies between UNDP and UNCDF are designed to bring maximum benefit to LDCs. UNCDF local finance solutions and subnational focus are a natural counterpart to UNDP’s global presence and upstream policy advice. Both entities share the overarching objective of eradicating poverty and reducing inequalities and exclusions. At the programmatic level, UNCDF has some 26 joint initiatives with UNDP.

In addition, UNCDF collaborates with other entities where the combination of its capital tools and expertise and the sector or thematic knowledge of other organizations can help tackle last-mile exclusions and have transformative impact. Partnerships currently underway or being planned include:

(a) UNDP and UN Women, on unlocking capital for women's economic empowerment and entrepreneurship;

(b) UNDP to expand financial inclusion in the Pacific;

(c) The Food and Agriculture Organization, on agriculture finance;

(d) The International Fund for Agricultural Development, on remittances;

(e) UN-Habitat and the Department of Economic and Social Affairs, on municipal finance in secondary cities in LDCs;

(f) UN Women, on women and girls' access to, usage of, and control of benefits from financial services; and

(g) UNHCR on a technical assistance fund for introducing digital financial solutions that benefit forcibly displaced populations and host communities.

UNCDF contributes actively to a number of UNDG working groups, especially those on sustainable development, sustaining peace and strategic financing. UNCDF also takes part in ECESA+ meetings; OHRLLS working groups on LDCs; and is an active contributor to the FFD IATF led by DESA.

In 2020, UNCDF is engaging closely with numerous other UN entities in preparing proposals for the Joint SDG Fund window on financing for sustainable development. UNCDF, with its unique capital mandate and ability to deploy loans and guarantees, is being called on to support many UN Country Teams to formulate joint programme proposals that include innovative financial solutions to support municipalities, PPPs, and SMEs.

6. How has your organization engaged with stakeholder groups, both in supporting implementation at the country, regional and global levels, and within your own organization? If yes, please provide main highlights, including any lessons learned. If your organization has established any multi-stakeholder partnerships to support the implementation of the 2030 Agenda and the SDGs, please describe them and how their performances are being monitored and reviewed.

UNCDF engages with a wide range of partners, public and private, in its work at the global, regional, and country levels. At the global level, for example, UNCDF is partnering with peer networks (CGAP, UCLG, Cities Alliance etc) and impact investment firms to create vehicles for directing SDG-positive finance to LDCs. At the regional level, UNCDF helps groups such as the Association of Southeast Asian Nations, the Southern African Development Community, the West African Economic and Monetary Union, and the Pacific Small Island Developing States to expand the reach of financial inclusion, including through multi-country approaches to remittances, data and analytics, and refugees. At the national level, UNCDF works with government entities as well as private sector partners, such as mobile network operators and SMEs, to make finance work for the poor. Lessons include that well-designed partnerships can take advantage of the unique skills and technologies that different entities can bring to the table, bringing maximum benefit to poor households. For example, through working with mobile network operators, UNCDF is able to leverage technological innovations such as digital delivery channels to reach increased numbers of low-income clients, expanding their access to affordable clean energy and formal savings products.

7. Has your organization organized any conferences, forums or events designed to facilitate exchange of experience, peer and mutual learning in connection with the SDGs? If yes, please provide a brief summary, below and include lessons learned and gaps identified based on the outcomes of these events. Please also include any events you want to organize in the coming years.

UNCDF has organized and continues to organize a large number of events at the HQ, regional, and country levels to support peer learning, South-South exchanges, and lessons sharing with funding and implementing partners. These conference and events relate to UNCDF''s practical experience in making finance work for the poor, and will continue in the years ahead, with a strong focus on digital finance, municipal finance, and the application of blended finance in LDCs.

8. Is there any other information you would like to share, including annual reports of your organization and any impact assessment or evaluation reports? If yes, please use the space below and attach the document(s). Please also use this space to provide any other information, comments or remarks you deem necessary.

UNCDF’s annual reports can be found here: https://www.uncdf.org/annual-reports

9. In your view, what should strategic directions look like for the UN system in support of the 2030 Agenda and SDGs in the Decade of Action? What key elements should they include and what major challenges should they address?

Overall, the UN development system, especially at the country level, must be able to clearly identify where and how it will contribute to key SDGs where progress is falling short. This should include identifying gaps in the UN's capacities and abilities to deliver and how it will work or partner with other public and private entities to ensure those gaps are filled.

As highlighted in one of the ten identified cross-cutting areas for more and faster action during the Decade of Action, it will be essential to mobilize adequate and well-directed financing towards those areas and SDGs where progress is too slow. This is a main priority for UNCDF.

The UN has a critical role to play through its relationship with governments to identify and address gaps so that financing works for inclusion, including through the development of Integrated National Financing Frameworks. The UN system should not only analyze and accompany the move from "billions to trillions", but also has an important role to actively help to unlock those trillions.

The UN can also help governments coordinate, track, allocate, and account for these sources of financing so that they are working together effectively to meet the SDGs; to tap those sources that may not be productively working toward positive SDG achievement (e.g., excess liquidity in domestic banks, domestic pension funds); and to redirect (through concessional and blended finance and other innovative approaches) financial flows for greater transformational impact.

This means the UN itself needs the right financing skills and expertise to be able to accompany greater flows of finance into investments that are SDG-positive. To this end, the UN should draw on existing finance capacities and experiences within the UN development system and build additional strategic capacities as needed, while avoiding duplication.

One specific area where more effort is needed is to support SDG finance to flow to “last mile” actors, especially in LDCs, including individuals and households, local governments and MSMEs, which are not being served by domestic and international providers of capital due to their low risk tolerance, need for larger scale projects and a lack of appropriate financing instruments. The risk, therefore, is that increases in financial flows for SDG achievement will continue to entrench exclusions at the country and sub-national levels, contrary to global ambitions to leave no one behind. 

The UN system could play a stronger role in delivering innovative financing models that seek to reduce barriers to investment, including providing catalytic concessional finance solutions and technical support that help to lower investment-specific risks, create confidence in local economies, and demonstrate the viability of investing in developing countries to both public and private partners. 

10. Please suggest one or two endeavours or initiatives that the UN system organizations could undertake together to support the implementation of the SDGs between now and 2030.

  • Convene and drive development of innovative financial de-risking instruments to catalyze greater private flows, as well as greater investments by Development Finance Institutions, into under-capitalized SDG-related sectors, subnational regions, and also in support of promoting access to essential technology.

    - For example, the UN could work collaboratively to establish an SDG investment fund for LDCs that would provide early-stage concessional loans and guarantees for income-generating projects (climate resilient infrastructure, etc.) and SDG-positive small and medium-size enterprises that currently face challenges in accessing finance, in order to help make them become bankable and investment ready. The UN system could collectively support development of a pipeline of projects that could be candidates for accessing capital from such a fund. A technical assistance facility could also accompany the fund to further help make projects investment ready and bankable.
     
  • Explore other innovative sourcing of finance, including through a voluntary SDG tax, attracting voluntary contributions from listed corporations, and supporting the issuing of SDG bonds.
ECESA Plus Member
UNCDF
Year of submission: 2020