As Prepared for Delivery

Madame President, Distinguished Members of the Executive Board, Excellencies, colleagues and friends,I am very pleased to join you today for the annual session of the UNDP/UNFPA/UNOPS Executive Board for 2021.

Thank you, Associate Administrator Rao-Monari, for your remarks.

This is the first time I formally address the Executive Board so let me first say how pleased I am to be here and to have joined UNCDF some four months ago.

I have felt especially privileged and humbled to join the organization at this challenging time -- when the United Nations is at the forefront of supporting countries to deal with the impacts of the COVID-19 pandemic, alongside the global climate, environmental and inequality crises.

Last year was an exceptionally difficult year so let me first say how proud I am of UNCDF’s achievements. Despite the difficult circumstances, we were able to increase our delivery and expand the number of countries we supported in 2020. This is a testament to UNCDF’s agility and the resourcefulness of our staff around the world.

Let me briefly highlight some of the main 2020 results and areas where we made progress against our Strategic Framework in 2020.

COVID-19 response

Supporting LDCs to respond to the COVID-19 pandemic was of course our top priority in 2020.

Overall, our financing expertise and approaches proved highly relevant and our support to LDCs covered two main areas:

• Supporting local governments to quickly deploy funding to meet local needs.
• Boosting digital solutions to limit disruptions to commerce and essential services.

Local governments and municipalities were at the forefront of responding to the crisis. By issuing emergency grants directly to local governments, UNCDF supported over 2 million people, 60 per cent of whom were women. The funds were used by local governments to procure protective equipment, sanitize materials, construct isolation wards and support struggling MSMEs.

For example, in Bangladesh, we deployed a block grant through the fiscal transfer system to support 72 local governments to respond to COVID-19.

We also prepared a ‘Guide for Immediate COVID-19 Response for Local Governments’, which became a blueprint for how to channel finance for rapid local government responses to the crisis.

Early on in the pandemic it also became clear that digital solutions were critical to respond to the crisis. Under our inclusive digital economies work, we supported innovations in areas such as digital payments, e-commerce, education and contact tracing apps in more than 20 countries. This support provided benefits and services to some 2.6 million people.

Our support included a strong focus on providing MSMEs with digital solutions so they could remain in business despite the lockdowns.

In West Africa we launched an initiative to partner with the private sector to leverage digital technologies to help MSMEs cope with the crisis. Through this effort we aim to reach some 6,000 MSMEs and benefit 190,000 customers.

Beyond our dedicated Covid response, we continued to deliver in our main areas of work, much of which also contributed to address impacts of the crisis.

Inclusive Digital Economies

Our support for financial inclusion has increasingly been delivered through digital financial services and in 2019 we adopted a new strategy focused on taking to scale digital finance and digital economy solutions that leave no one behind.

Under our current Strategic Framework we have connected a total of 9.2 million people to financial services, with 5.2 million being reached through digital means. We have supported the piloting and scaling of several hundred new financial products that specifically target last mile populations.

Digital finance is also increasingly embedded into other services, such as transportation, agriculture extension services and clean energy solutions, which help make such services more accessible and affordable.

To make sure the digital transformation is inclusive and does not lead to a growing digital divide for LDCs, we introduced the UNCDF Inclusive Digital Economies Scorecard (IDES) in 2020. This is a policy tool for governments to measure and set priorities to shape an inclusive digital transformation of their countries. We piloted this scorecard in four countries – Burkina Faso, Nepal, Solomon Islands and Uganda – and then introduced it in nine additional countries.

More broadly, we are now rolling out our market development approach to building inclusive digital economies in some 20 countries, covering a range of SDG sectors. For example, in 2020 we partnered with over 70 financial and energy service providers to bring clean energy products to over 2 million people.

Local Development Finance

A second area where we have made great progress is our support for local governments to mobilize and access climate and SDG finance.

In 2020 we worked with more than 530 local governments in 42 countries as part of our support for local development finance systems. With these partners we completed 674 local investments that targeted climate adaptation, women’s empowerment, and local economic development.

To support local governments to access and manage finance for climate adaptation, we host the local climate adaptation finance initiative “LoCAL”, which is now operational in 14 LDCs with 13 additional countries in the pipeline.

Since its launch, LoCAL has supported over 300 local governments and made over 1600 adaptation investments that have benefitted a total of 11 million people.

This initiative is recognized by the UNFCCC and it has strong ownership of LDC governments. In the coming years, our aim is to fully embed this mechanism in all LDCs and help them gain improved access to sources of international climate finance such as the Green Climate Fund.

Under our Blue Peace initiative, which is funded by Switzerland and aims to provide innovative financing solutions for water infrastructure, we kicked off a collaboration with the Gambia River Basin Development Organization to design and finance infrastructure investments in the water, agriculture and energy sectors in bordering countries in the region. This will include support for issuing a new type of financial instrument on the capital market to raise financing for these investments.

Gender

Across all of our work, we provide targeted support for women’s financial inclusion and economic empowerment. For example, in Myanmar, we partnered with fintech companies, microfinance institutions and banks to develop gender-smart financial products and services. We provided training in digital and financial literacy for over 120,000 rural women who in turn opened more than 35,000 new financial accounts.

Investment finance

UNCDF’s third pillar of work is our support for investment finance under the LDC Investment Platform, established in 2017. Through this effort, we have now fully activated our capital mandate by establishing the needed professional expertise and by piloting a portfolio of 21 loans and guarantees mainly for small businesses.

The purpose of every UNCDF loan or guarantee is to be catalytic and leverage additional commercial finance, allowing our investees to continue to grow without additional UN support.

As part of the last-mile SDG investment architecture we have put in place, we have also launched two external third-party managed blended finance funds, including the BUILD Fund for LDC-based SMEs and the International Municipal Investment Fund (IMIF) for municipal infrastructure.

These Funds are expected to mobilize significant private and concessional capital for last mile projects in the LDCs in coming years.

For both these Funds, UNCDF manages technical assistance facilities to identify and prepare projects to meet the requirements for accessing resources from the funds.

In 2020 we also engaged actively with other UN entities under the Joint SDG Fund’s window on SDG financing. We were a partner in a total of 12 approved projects, including two of the four larger projects focused on catalyzing investments. This highlighted our key role in making innovative blended finance solutions work within the UN development system.

For example, in partnership with UNDP and UNEP we support the Global Fund for Coral Reefs in Fiji, where we will accelerate the investment readiness of a pipeline of locally managed marine areas and other viable blue economy projects with the aim to unlock additional capital for these projects.

Resources and institutional effectiveness results

In 2020, our expenditures increased by 10 per cent compared to 2019.

We have had clean audit opinions of our financial statements over the past eight years now, which demonstrates our ability to manage resources in an accountable manner.

On the resources side we continue to see a mixed picture. Our regular resources increased from $13.3 million in 2019 to $14.8 million in 2020. However, this remained well below the $25 million per annum target set in the Strategic Framework.

Revenues of non-core resources were $66.9 million in 2020, a drop from 2019 below the $75 million annual target, but within the range of the 2020 milestone.

Finally, we continue to fall short on the one-time capitalization of $50 million for the LDC Investment Fund, now named the BRIDGE Facility. This will be a top priority for us going forward.

Our deep appreciation goes to all Member States who provide core and non-core resources.

In terms of our gender strategy, we increased our performance against the United Nations System-wide Action Plan on Gender Equality and the Empowerment of Women 2.0 to 94%, up from 88 % in 2019. However, continued effort is needed to achieve equal representation of women, especially at the senior level.

Looking forward

As we develop UNCDF’s next Strategic Framework, we want to make sure we focus on the priorities that matter the most for LDCs and where we can have the greatest impact.

We therefore suggest to increasingly focus on supporting LDCs to transform their economies to become more diversified, green and inclusive. This will be key to drive SDG progress and build more prosperous communities and it is a main priority in the ongoing LDC5 discussions. We believe UNCDF is well positioned to help accelerate this agenda.

Let me highlight a couple of ways in which we aim to increase our efforts in support of this agenda:

First, we aim to become a hybrid between a development agency and a development finance institution. This means that we will offer more integrated and scalable solutions that combine our development expertise with our financing expertise and instruments.

Second, to become a hybrid organization will require that we scale up the capital investments and financial advisory support that we have piloted over the past four years.

To enhance our own deployment of catalytic loans and guarantees, we now urgently need to expand the assets under management on our own balance sheet with a one-time capitalization of at least $50 million for the BRIDGE Facility.

To expand our role as an advisor and facilitator of finance also means that the third party managed funds we have established must be successful in mobilizing capital.

We will also seek to augment our role to facilitate other innovative solutions to help LDCs access capital markets.

A third priority will be to develop country pipelines of investment ready projects in key SDG sectors that can attract investment capital. We constantly hear about the lack of investment ready projects in the LDCs and UNCDF will step up its efforts to help address this gap.

A fourth strategic priority will be to deepen our collaboration with the wider UN development system, including first and foremost UNDP. This means bringing our financing capacities together with UN development expertise to offer countries more integrated solutions to support SDG investments.

Excellencies, Distinguished Board members

If there ever was a time for the global community and multilateral system to intensify the support for LDCs, it is now. The upcoming Fifth UN Conference on the LDCs must be a rallying call that results in concrete support to help LDCs recover from COVID-19 and accelerate progress on the SDGs.

With our unique financing mandate and dedicated focus on LDCs in the UN system, UNCDF stands ready to scale up its support to help people in the LDCs achieve their aspirations.

We count on your continued and enhanced support to allow us to do so.

Thank you.