United Nations Capital Development Fund (UNCDF)
1. Responding to the multiple crises, has the governing body of your organization taken any decisions or adopted any new strategies to enhance effective delivery of sustainable, resilient, and innovative solutions and to reinforce the 2030 Agenda for Sustainable Development and poverty eradication?
At its First Regular Session in 2022, the Executive Board of UNDP/UNFPA/UNOPS took note of the UNCDF Strategic Framework 2022-2025. The Strategic Framework sets out a new mission for UNCDF to serve as a “UN catalytic financing entity for the least developed countries”, acting as a hybrid organization in providing a combination of capital deployment (designing and deploying SDG financing solutions) and complementary technical assistance and policy advice. Overall, the strategy sets out to support LDCs in achieving the sustainable growth and inclusiveness envisioned by the 2030 Agenda for Sustainable Development and the Doha programme of action for the LDCs by contributing to three inter-linked outcomes:
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Catalyse additional private and public flows of capital.
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Strengthen market systems and financing mechanisms.
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Accelerate inclusive, diversified, green economic transformation.
Under this Strategic Framework, 2022-2025, UNCDF will seek to realize its full potential by fulfilling its overall financing mandate with capital deployment, financial advisory services and capital catalyzation. This will be matched with development expertise across five priority areas: the well-established flagship areas of (a) inclusive digital economies; and (b) local transformative finance; and in the emerging areas of (c) women’s economic empowerment; (d) climate, energy, and biodiversity finance; and (e) sustainable food systems finance.
2. In the past year, has your organization organized any intergovernmentally mandated conferences, forums or events that contributed to the achievement of the SDGs, or in the process of planning and organizing any such mandated events to be held next year?
N/A
3. In the past year, has your organization published or planned to publish any analytical work or guidance note or toolkits to guide and support the implementation of SDGs at national, regional, and global levels? Please select up to three to highlight, especially those that address interlinkages among the SDGs.
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Resource Name |
Local Government Finance is Development Finance (Volume II) |
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Relevant SDGs (list all relevant goals) |
SDGs: 1, 8, 9, 10, 11, 13 |
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Publishing entity/entities |
UNCDF |
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Target audience |
National and local governments in LDCs, international development organizations, and donors |
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Description (max 150 words) |
UNCDF's commitment to advancing the Malaga agenda leads to the production of the second volume of "Local Government Finance is Development Finance." This publication is based on the third Malaga conference discussions and outcomes, with an update of the first volume's content, featuring recent case studies from countries at the forefront of operationalizing the Malaga policy agenda. |
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Language(s) |
English |
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Website (if applicable) |
https://www.uncdf.org/article/7589/local-government-finance-is-development-finance |
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Resource Name |
IDES (Inclusive Digital Economy Scorecard) |
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Relevant SDGs (list all relevant goals) |
SDG1, SDG2, SDG3, SDG4, SDG5, SDG7, SDG8, SDG9 |
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Publishing entity/entities |
UNCDF (built with support from UN-DESA, UNCTAD, UNDP, and other non-UN organizations) |
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Target audience |
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Description (max 150 words) |
The Inclusive Digital Economy Scorecard (IDES) is a strategic performance and policy tool designed to help countries monitor and understand the status of their digital transformation, with a view to helping them make it more inclusive. The IDES identifies the key market constraints hindering the development of an inclusive digital economy and helps governments to set the right priorities with public and private stakeholders, to foster accelerated development of a digital economy that leaves no one behind. |
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Language(s) |
English (website) with tool availability in both French and English. |
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Website (if applicable) |
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Resource Name |
Toward accelerating climate finance: forging a new partnership between the Global South and the Global North |
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Relevant SDGs (list all relevant goals) |
SDG 13 and 17 |
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Publishing entity/entities |
Think7 Japan 2023 (UNCDF was one of the lead co-authors) |
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Target audience |
G7, Member States |
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Description (max 150 words) |
Economywide decarbonization is essential for achieving the climate goals set in the Paris Agreement. This will require deploying and scaling up green infrastructure and technologies. While finance flows toward climate action—both mitigation and adaptation—have been increasing, the rate of increase has been much slower compared to the rate of growth of required investment, leading to a growing climate finance gap. Emerging market and developing economies (EMDEs) and least developed countries (LDCs), in particular, have seen significant gaps in both mitigation and adaptation. Further, in a majority of developing countries, public finances are strained, inflation is high, and debt is mounting due to the pandemic and volatile geopolitical conditions. This compounds the problem, especially since EMDEs and LDCs will witness rapid growth and need increased investments. The policy brief looks at ways to address this gap and the role of Group of Seven countries in supporting this journey. |
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Language(s) |
English |
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Website (if applicable) |
4. In connection with the 2023 SDG Summit, the United Nations development system announced 12 High-Impact Initiatives where transformative progress is possible despite challenging global circumstances. Please share if your organization is contributing to any of these High Impact Initiatives and how various actors are being rallied behind them to mobilize further leadership and investment to bring progress to scale.
UNCDF is currently exploring formal engagement in and contributions to some of the High-Impact Initiatives relevant to its work, and it is contributing in many different ways towards their broader aims, for example:
Digital Public Infrastructure
Through its Inclusive Digital Economies practice area, UNCDF supports a significant number of least developed countries to develop inclusive digital economies, including to build open digital ecosystems and digital infrastructure. For example, the Inclusive Digital Economies Scorecard (IDES) currently assesses some 25 countries the level of development of the digital economy and its main components: enabling policy environment, digital infrastructure and payments, innovation ecosystem, and customer skills. The IDES was developed by UNCDF supported by a reference group of like-minded organizations (GSMA, EU, UNDP, UNCTAD, UN-DESA and ADB) and governments in four least developed countries.
Food Systems Transformation (Transforming food systems for a sustainable world without hunger)
In partnership with WFP, FAO, IFAD, UNCDF co-leads the Resilient Local Food Supply Chains Alliance. This country-led and multistakeholder alliance emerged from the UN Food Systems Summit in 2021. The alliance, co-led by WFP, FAO, IFAD, UNCDF, and AUDA-NEPAD, advocates for building resilient local food supply chains through local, national, and regional actions. It supports countries in their efforts to enhance the resilience of local food supply chains, aligning with their priorities for food systems transformation. To implement these objectives, the Alliance has established a Steering Group and four task forces, including Finance and Investment, to drive impactful actions.
Local2030 Coalition (Pushing key transitions and achieving the SDGs by 2030)
UNCDF collaborates with UN-Habitat in the SDG Cities Global Initiative, a part of the Local2030 Coalition. This initiative supports emerging and developing cities in building effective own-source revenues and public financial management systems. UN-Habitat and UNCDF leverage their expertise to promote sustainable finance at the local level, strengthening local public financial management and facilitating projects like the "Ghanian Smart SDG Cities." Additionally, UNCDF and UCLG established the Global Coalition for Municipal Finance to equip subnational governments with financial and technical support, achieving structural changes and supporting local governments in reaching the SDGs.
Nature Driving Economic Transformation (Leveraging the power of biodiversity and nature to drive equitable economic progress)
UNCDF actively engages in initiatives targeting vulnerable populations, including women and youth, through projects such as the Localized Blue Peace Project (LBP). LBP implements and finances transboundary and municipal projects to improve the usage and management of water resources, reducing conflicts using water as an entry point. This aligns with the nature-driven economic transformation initiative by promoting sustainable water management and integrated, cross-sectoral, and transboundary water management. LBP emphasizes blended finance and innovative financial models to develop infrastructures and local value chains, contributing to peace and prosperity.
UNCDF hosts the Global Fund for Coral Reefs (GFCR), a 10-year, $625 million blended finance vehicle established through a coalition between United Nations agencies, financial institutions, and private philanthropy sources. The GFCR provides grant funding and private capital to support sustainable interventions to save coral reefs and the communities that rely on them. The GFCR supports business models that can sustainably finance key conservation and development goals for coral reefs via two initiative funds. Technical assistance, capacity development, monitoring, and evaluation are provided via the grant fund, while the investment fund generates de-risked investment capital to maximise the impact of projects incubated by the grant fund.
The SDG Stimulus (Scaling up long-term affordable financing for the SDGs)
Aligned with the SDG Stimulus's call to leverage more private SDG and climate finance through blended finance, UNCDF has recently helped prepare a set of recommendations for G7 members on blended finance. These recommendations include boosting the inclusion and effectiveness of blended finance approaches in overseas development assistance, supporting enabling environments, and fostering impact measurement, accountability, and transparency. UNCDF also implements several practical blended finance mechanisms at global and country levels, which can contribute to generate lessons and inform how to scale up blended finance approaches, especially for least developed and other vulnerable countries.
5. In addition to the above, has your organization been part of any other initiatives or multi-stakeholder partnerships that enhance effective delivery of sustainable, resilient and innovative solutions and reinforce the 2030 Agenda for Sustainable Development, especially in the areas of poverty eradication (SDG1), food systems transformation (SDG2), climate action (SDG13), governance (SDG16), partnerships (SDG17), which will go under in-depth review at the HLPF in 2024, or related to the Secretary-General’s proposals in Our Common Agenda?
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Initiative/Partnership Name |
Digital Finance for Resilience (DFS4Res) |
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Partners (please list all partners) |
EU and Organization of Africa, Caribbean, and Pacific States (OACPS) |
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Relevant SDGs (list all relevant goals) |
SDG1 SDG 5 SDG 17 |
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Member States benefiting from it |
Ethiopia, Gabon, Malawi and Niger in Africa, Trinidad and Tobago in the Caribbean and Fiji, Samoa, Timor Leste, Tonga, and Vanuatu in the Pacific |
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Description (max 150 words) |
The ‘Digital Finance for Resilience’ is a four-year programme supported by the European Union and the Organization of African, Caribbean and Pacific States, and implemented by the UN Capital Development Fund. The programme aims to deploy digital finance solutions at scale to deepen financial inclusion and accelerate economic recovery from COVID-19 to make economies and societies more resilient to external shocks. The specific objectives of the Programme are: To improve digital finance policies and regulations to provide early response to emergencies and create an enabling environment to economic recovery. To create and strengthen digital finance ecosystems that support low-income individuals in particular women and youth; and MSMEs to mitigate immediate shocks of emergencies and increase economic opportunities. |
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Website |
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Initiative/Partnership Name |
Policy Accelerator |
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Partners (please list all partners) |
G7 and French Ministry of Finance, Bill & Melinda Gates Foundation, Women’s World Banking, EU Organization of Africa, Caribbean, and Pacific States (OACPS)
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Relevant SDGs (list all relevant goals) |
SDG 1 SDG 5 SDG 10 SDG 17 |
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Member States benefiting from it |
LDCs |
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Description (max 150 words) |
The Policy Accelerator works directly with governments to provide technical assistance that improves the use of digital financial services, especially for women and other underserved groups that have traditionally been excluded from the formal economy. While the technical support often includes market analysis, drafting and reviewing policy and regulation, convening dialogues, and hosting workshops, the programme also provides other types of customised support that respond directly to the needs and interests of governments. |
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Website |
https://policyaccelerator.uncdf.org/
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Initiative/Partnership Name |
The Malaga Global Coalition for Municipal Finance |
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Partners (please list all partners) |
United Cities and Governments (UCLG), Global Fund for Cities Development (FMDV), and the City of Malaga. |
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Relevant SDGs (list all relevant goals) |
SDGs: 1, 13, 16, and 17 |
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Member States benefiting from it |
LDCs |
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Description (max 150 words) |
The Malaga Global Coalition for Municipal Finance was created in 2018 as a unique alliance for a financial ecosystem that works for cities and local governments who play a critical role in achieving the sustainable development agendas, including the SDGs and the Paris Agreement. The goal is to enable cities and regions to access the public funding and private financing they need to realize their full potential in the provision of sustainable public services and infrastructures to drive the required transformation. As a multi-stakeholder platform for dialogue between local governments, national governments and public and private financial institutions, the Malaga Coalition has been convened twice in 2018 and 2019 by UNCDF and the United Cities and Governments (UCLG) in collaboration with the Global Fund for Cities Development (FMDV) and the City of Malaga. |
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Website |
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Initiative/Partnership Name |
Local Climate Adaptive Living Facility (LoCAL) |
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Partners (please list all partners) |
UN Capital Development Fund (UNCDF), LDC group to UN and to UNFCCC, Africa Group of Negotiators, other UN agencies, MDBs and partners. |
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Relevant SDGs (list all relevant goals) |
SDGs: 1, 11 and 13 |
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Member States benefiting from it |
LDCs, SIDs, African nations, other developing countries. |
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Description (max 150 words) |
The impact of climate change is acutely experienced at the local level—where we work, go to school, and live our lives. UNCDF designed the Local Climate Adaptive Living Facility (LoCAL) in 2011 to channel finance to local government authorities and their communities to cover the additional costs of mitigating and adapting to the impacts of climate change—thereby minimizing and addressing potential loss and damage. Managed by UNCDF, the Facility supports LoCAL country-owned mechanisms for climate finance delivery that have realized adaptation solutions for more than 16 million people around the world. More than 30 countries across Africa, Asia, the Caribbean, and the Pacific have engaged with LoCAL to deliver resilience-building solutions for climate-vulnerable populations. The LoCAL approach provides the basis for https://www.iso.org/standard/68511.html which contributes to SDGs 1, 11 and 13. It is included in the Doha programme of action of the LDCs and presented as a non-market approach to UNFCCC by the LDC Group and the Africa Group of Negotiators. |
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Website |
6. In the Political Declaration adopted at the 2023 SDG Summit, Member States committed to using the review of the high-level political forum at the 78th session of the General Assembly to further strengthen the follow-up and review of the implementation of the 2030 Agenda, harnessing data to track progress in implementing the Sustainable Development Goals and targets, strengthening analysis of the interlinkages across the Goals and targets, including policy implications of their synergies and trade-offs. Please provide your organization’s recommendations, if any, in this regard.
Strengthen follow-up and review of the implementation of the 2030 Agenda at HLPF
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UNCDF encourages Member States to regularly report on their efforts to mobilize and leverage blended finance for projects aimed at reaching marginalized communities and achieving SDGs.
Harnessing data to track progress in implementation
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UNCDF supports the World Observatory on Subnational Government Finance, which supports and encourages collection of knowledge and data on subnational government structure and finance. UNCDF supports its aims to increase knowledge and promote international dialogue and peer learning on multi-level governance and subnational finance as a means to advance the 2030 Agenda.
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UNCDF encourages the prioritization and development of robust data systems that facilitate tracking of blended finance investments, their impact, and their alignment with SDG targets.
Other suggestions
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UNCDF in partnership with DESA, OHRLLS, the Government of Nepal, FinDev Canada, the Global Investors for Sustainable Development Alliance (GISD), the International Organization of Employers (IOE) and Convergence organized a policy dialogue during the SDG Action Weekend on September 17, 2023, on “Scaling blended finance to mobilize private SDG investments in the Least Developed Countries (LDCs) and other vulnerable countries”. The event produced recommendations aimed at optimizing blended finance for SDG acceleration:
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Enhanced Use of Risk-Sharing Mechanisms: Encourage the increased utilization of risk-sharing tools, such as guarantees, to mitigate risks and strategically attract private sector capital towards SDG-positive investments in Least Developed Countries.
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Promotion of Collaborative Partnerships: Emphasize the importance of fostering partnerships among governments, Multilateral Development Banks (MDBs), the private sector including employers’ organizations, and the UN system to identify solutions and mitigate risks for private investments in high impact SDG projects.
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Utilization of re-channeled SDRs for Blended Finance: Respond to the LDC Group’s call for $100 billions of Special Drawing Rights (SDRs) to be reallocated specifically for LDCs. Consider innovative approaches, such as using these funds to support SDG investments that can attract private capital, including through national development banks or guarantees for increased SME lending.
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Strategic Use of Blended Finance for Local Capital Markets: Deploy blended finance strategically to develop local capital markets, promote local currency financing solutions, and mobilize local investors to unlock capital for SDG investments.
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Support for blended finance platform approaches: Advocate for blended finance platform approaches that enhance risk management by pooling investments and diversifying across countries (LDCs and less risky non-LDCs) and sectors.
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UNCDF also encourages Member States to prioritise technical assistance facilities and institutional capacity development efforts to develop bankable (investible) SDG projects that can attract commercial or semi-commercial (concessional) SDG financing.
In parallel, least developed, and other developing countries should further prioritize creating enabling environments, including stable and predictable regulatory frameworks, for green and inclusive economic development and investments, to become more attractive for private financiers.