The UN and SDG financing: Make or break moment?
BY Annika Östman | April 24, 2018|Comments 0
There is no way around it. Development financing has entered a new era; with the cost of solving the world’s most critical problems running into the trillions, traditional development aid is simply no longer enough and those active in this space are faced with the choice of readjusting or becoming irrelevant. This includes the United Nations.
The seminar brought together UN practitioners and external financing experts already forging ahead on the path towards a new financing approach, and it gave them an opportunity to share their experiences in unlocking innovative financing for the Sustainable Development Goals (SDGs). Some UN country teams have already come quite a bit along the way.
Armenia is one country that, with proactive support from the UN, is actively pursuing innovative financing solutions to mobilise capital for national development priorities. One such solution is impact investing, in which the Government and partners invest in companies, organisations and funds to generate positive social and environmental impact alongside a financial return.
“Our job is to grow the impact ventures that contribute to SDGs, connect them to investors and to find ways to scale them,” explained Dimitri Mariassin, Deputy Resident Representative of UNDP in Armenia. To achieve this the UN team in country has set up an accelerator to strengthen impact ventures and is creating an impact fund with an existing fund manager in Armenia to leverage funds for larger investments.
In Indonesia, the UN Country Team is also partnering effectively with government and the private sector in experimenting with new forms of finance to support the SDGs. This includes UNDP Indonesia’s innovative work in exploring the potential of Islamic finance for SDGs, launching crowd funding campaigns for environment projects, supporting the establishment of a first sovereign wealth fund in Indonesia and setting up an Innovative Financing Lab.
“We are trying to bridge and connect investors with the communities and issues that need investment,” said Francine Pickup, Deputy Country Director of UNDP Indonesia. “Our belief is that by coming up with innovative finance instruments we can attract capital to where it is most needed.”
Defining the UN’s role
The work of these early adopters has shown that there is a role for the UN in the space of innovative financing for the SDGs. In fact, there are many different roles the UN can play ranging from convening, brokering, de-risking, to impact reporting and monitoring.
“We are the ecosystem player, trying to play that honest broker role and we ensure everything we do is built on needs and is demand-driven,” explained Arif Neky, Advisor UN Strategic Partnerships and Coordinator of the new SDG Partnership Platform in Kenya. This platform will help drive public-private investments into the SDGs with an initial focus on health and wellbeing. The UN is playing a key coordination role; a function that many outside the UN see as crucial.
“Now that there is interest from the private sector in financing SDGs, there is a fundamental role for the UN to spell out what it means to drive financing to the SDGs,” explained Andrea Armeni, Executive Director of Transform Finance. “More capital is not sufficient, it has to be the right kind of the capital, it needs to be aligned and coordinated and that is a role only the UN can play.”
For the UN to realise its full potential in this space though it is evident that its roles need to be unpacked and there a number of challenges inherent to the UN system that need to be addressed. Workshop participants cited slow internal bureaucratic procedures and inflexible rules and regulations as limiting UN country teams’ ability to test new things and take risks. The need to sharpen and retain in-house skills, particularly in regards to speaking and understanding the language of investors and the private sector was also identified as a key challenge.
The workshop will feed into a broader scope of work the Foundation is pursuing together with the UN Development Operations Coordination Office (UN DOCO). Specifically, the discussions will enrich a series of three case studies about Armenia, Indonesia and Kenya that will be published soon, as well as a joint comprehensive report based on findings of the different case studies.
The case studies will identify and analyse the best practices and needs from these UN country teams, and the expectation is that other countries looking to follow these early adopters can build on their experiences and avoid potential pitfalls. The reports also aim to further identify the key challenges and bottlenecks in adopting new approaches, so that, where possible, they can be addressed centrally at the UN.
This corporate response will be critical for the experience in these countries shows that if these new funding methods are to work and be adopted by UN agencies in different countries a change in mindsets across the organsation is required. Innovative financing must be integrated into the core strategies and operations of the whole UN and not only be the work of a few brave outliers.
Cross-posted from the Dag Hammarskjöld Foundation blog.
Photo: UN in Liberia
- Crowdsourcing the campfire: how our data visualization contest opened doors
- Mining alternative data: What national health insurance data reveals about diabetes in the Maldives
- Untangling the complexity of the Sustainable Development Goals in Moldova
- TONSE – From Zambia to the Google Play Store
- Natural Language Processing to align national plans in Serbia with Global Goals
- Mounir kleibo On
- Lars Tushuizen On
- Steve O'Malley On
- Philip Dive On
- Yves Sassenrath On