As Prepared for Deliver

Madame President, Members of the Executive Board, Excellencies, colleagues, and friends.

I am pleased to join you today for the 2022 annual session of the UNDP/UNFPA/UNOPS Executive Board.

Thank you Associate Administrator Rao-Monari for your remarks.

2021 was my first year as Executive Secretary of UNCDF and it was a very fulfilling and productive year.

We continued to grow as we delivered more support to our partner countries than at any time in our history and mobilized our highest amount of revenues on record.

This is a testament to the resourcefulness of UNCDF staff around the world, and to the trust our partners place in our work. It also confirms that our hybrid business model — combining development and investment activities — is based on the principle of creating added value.

Our 2021 accomplishments responded to the ongoing global development crisis. The devastating impacts of COVID-19 continued, climate change and biodiversity loss accelerated, and implications of conflict emerged. Growth is stalling, debt burdens soaring and tens of millions of people in the LDCs have been pushed into extreme poverty in the past two years. And LDCs now face increased risk of food insecurity due to the war in Ukraine.

So let me give you a snapshot of some main results we achieved in 2021.

First, one central element of UNCDF’s investment finance work is our deployment of loans and guarantees to private and public SDG investments in LDCs, with the aim to catalyze additional financing.

In 2021, we issued nine new loans that benefited enterprises in the energy, financial services, agriculture and blue economy sectors in Burkina Faso, Malawi, Myanmar, Uganda and Fiji. In total we have now issued 30 loans and guarantees.

We also continued to support our pioneering third-party managed ‘BUILD’ Fund, a blended impact investment vehicle with a target capitalization of $250 million to finance SDG-positive small businesses.

BUILD became fully operational and made its first investment in 2021. Significant progress was made in raising capital for the Fund. As of early 2022, six member states and development institutions representing Canada, the United States, Norway, Luxembourg, Sweden and the Nordic countries through the Nordic Development Fund, have committed $55 million of risk capital into the Fund. These resources will now help to attract private-sector investors to the fund.

Another externally managed fund we have set up is the International Municipal Investment Fund, which provides equity financing for cities and local governments in areas such as transport, clean energy and waste management. To date, the fund manager has secured financing in the amount of 290 million Euros for this fund.

We also joined UNDP, UNEP and others to create the $625 million blended Global Fund for Coral Reefs. An initial allocation of $8.8 million will provide concessional loans for coral reef protection and restoration in five countries.

During 2021, we remained steadfast in pursuing our development objectives and provided a total of $37 million in catalytic grants to support financial inclusion and local development. Together with our portfolio of $5.8 million in loans, our investments helped unlock some $89 million in additional financing.

During the year, we also made solid progress towards our objective of enhancing financial inclusion, through support for inclusive digital economies and digital financial services.

We partnered with financial institutions, mobile network operators and fintech firms to deliver financial and digital solutions to over 3.5 million people in 35 countries.

For example, over the last few years we have helped 2.3 million micro-merchants in Bangladesh to benefit from digital payments, micro-insurance, and e-commerce solutions.

More broadly, we deployed our Inclusive Digital Economies Scorecard in 25 countries to help define policy priorities to accelerate digital transformation that benefits all people.

We supported national financial inclusion strategies in a total of 14 countries.

To deliver the SDGs at the local level, we supported 588 local governments in 42 countries to enhance their subnational financial systems. We completed a total of 390 local investments, mainly in small infrastructure projects, which contributed to create 42,000 jobs and build climate resilience that benefited more than 12.5 million people.

Our flagship initiative for local climate adaptation finance, LoCAL, continued to expand and is now being implemented by over 320 local governments in 29 countries, where we provide capacity building and financing for climate resilient investments.

At COP26 in Glasgow, the LoCAL initiative was officially recognized by the LDC group as central to support the ‘LDC 2050 Vision’. LoCAL is also referenced in the Doha Programme of Action for the LDCs as a key effort to step up capacity development and finance for climate adaptation.

In 2021 we also made progress in assisting local and other non-sovereign authorities to access capital markets to finance climate resilient infrastructure.

In partnership with the Gambia River Basin Development Organization and the Government of Switzerland, we are preparing the issuance of an innovative “blue peace bond”, which will fund projects that will serve up to 7 million people in The Gambia, Guinea, Guinea Bissau and Senegal.

In Tanzania, we supported the preparations for issuing municipal bonds on the domestic stock market, with an initial $23 million water municipal bond, expected to close in 2022.

To support women’s economic empowerment, we helped create instruments that unlock finance for women in several countries. In Senegal, we assisted the country’s sovereign wealth fund to set up and manage a Women’s Economic Empowerment Fund, the WE! Fund, which made its first investment in 2021 .

In 2021 we saw a strong increase in interest from other UN entities to use our financing instruments to unlock private capital in support of their objectives. The Multi-Partner Trust Fund Office was our largest source of funding with $28 million, demonstrating our expanded collaboration with the wider UN system.

Through our Investment Advisory Initiative, supported by the Netherlands, we provided support to the UN development system in 10 countries across Africa.

For example, in Rwanda we worked with the World Food Programme and Mastercard to establish a new $15 million blended finance facility for small businesses in the agricultural value chain, which will benefit 200,000 smallholder farmers.

In terms of our institutional performance, let me provide a few highlights.

On the resource side, the overall picture is encouraging. However, our regular resources remained stagnant at $14.7 million, making up only 10.7 per cent of total revenues – well below the Funding Compact target of 30 percent. This shortfall limits our ability to act as a more strategic and innovative partner to countries and the UN system.

More positively, revenues from other resources increased by 84.8 per cent, from $66 million in 2020 to $122 million in 2021.

Our expenditures increased 17 per cent to a record $100 million in 2021. Over the last four years we have consistently increased our delivery from a base of $64.2 million in 2018.

Our five top overall contributors were the Multi-Partner Trust Fund Office, the European Union, the governments of Sweden and Switzerland, and the Bill and Melinda Gates Foundation.

We have had clean audit opinions over the past nine years, demonstrating our ability to manage resources in an accountable manner.

On the operational side, in response to the growth of our programme portfolio, we are streamlining and pooling our operations capacities. This will allow us to provide more efficient implementation support, continue to enhance delivery, and ensure oversight.

In 2021, we also completed an evaluation of our previous Strategic Framework and we prepared our new Strategic Framework 2022-2025, which was presented to the Board in February. We are currently populating the new results matrix with baselines and targets and we expect to share an updated results matrix in the second half of the year.

Excellencies, 2021 marked the end of the previous Strategic Framework cycle and during this period we made important progress in several areas that positions UNCDF well for the future:

First, we have fully established our ability to provide loans and guarantees and we now have a solid portfolio of SDG-positive investments in place. This capability was not fully developed and exploited six years ago. Our focus on small but high impact investments fills a gap in the development finance architecture that no one else is addressing.

With our established and tested loan and guarantee policies and procedures and a dedicated team of investment professionals, we are able to deploy and manage loans and guarantees in a transparent, effective and accountable manner. Our investment operations have recently been audited and received a satisfactory opinion.

Furthermore, the progress with capitalizing our external BUILD Fund and our role in the Global Fund for Coral Reefs, will allow us to catalyze significantly more capital for small SDG-positive businesses in the coming years.

Second, during the last few years we have transitioned our support for financial inclusion to a wider focus on promoting inclusive digital economies and digital finance. This evolution will allow us to pursue new opportunities and drive financial inclusion and mobilization of SDG financing at greater scale.

Third, we have expanded our support to mobilize finance for municipal SDG investments. The launch of the International Municipal Investment Fund and our recently announced partnership with UN Habitat on the Cities Investment Facility, are just a few initiatives that will enable us to scale our support for local development going forward.

Fourth, in response to demand from country and UN partners, we are strengthening our support in the areas of financing for women’s economic empowerment; climate, energy and biodiversity finance; and sustainable food systems finance. We especially see significant potential to increase collaboration with other UN partners in these areas.

And finally, we have further built capacity and commitment at country level by establising a network of Country Relationship Managers. This will improve UNCDF’s engagement with UN system processes, governments, and donors to make more effective the representation of UNCDF’s offer as a whole.

Excellencies, Distinguished Board members,

With our achievements in the past four years, we have laid the foundation for an SDG investment proposition that helps our country partners to deliver on the Doha Programme of Action and achieve sustainable and inclusive economic growth.

We count on your continued support as we move forward to deliver on our mission as the “UN catalytic financing entity for the LDCs”.

Thank you.