Publication

Joint UNDP-UNCDF ReStart Fund - Recovery to jumpstart enterprises

Investing in early recovery for long-term resilience

Emerging evidence shows a persistent financing gap for recovery and resilience initiatives that support the transition from humanitarian response to long-term development, sometimes referred to as the ‘missing middle.’ These initiatives often aim to restore essential services, rebuild critical infrastructure, support governance systems, and ensure access to jobs and livelihoods. Despite a critical need, these initiatives are often underfunded, as financing flows are concentrated at two poles: immediate life-saving humanitarian relief and long-term sustainable development programming. As a result, early recovery initiatives lack adequate and timely financial support.

One of the key factors in perpetuating the ‘missing middle’ financing gap is the perception that in countries that are experiencing or emerging from conflict, the risk of investment is too high. Public and private investors determine the time is not right to engage in these complex settings. However, this is counter-intuitive to our efforts to support sustainable development. As countries look to rebuild post-crisis, it is vital to invest in their future.

While many investors—both public and private—may not be able to invest on their own in high-risk settings, together UNCDF and UNDP are working to change this reality, enabling investment when it is needed most. In doing so, UNCDF and UNDP are addressing the ‘missing middle’ financing gap, which is vital to stabilize communities, build resilience, and support the transition from crisis to sustainable development.

The Government of Spain and the United Nations Development Programme (UNDP) have joined forces, launching the Recovery and Resilience Financing Platform (RRFP), an initiative under the Sevilla Platform for Action at FFD4. The RRFP aims to address the persistent financing gap for recovery and resilience initiatives in fragile and conflict-affected countries, which is critical to restore essential services, rebuild critical infrastructure, support governance systems, ensure access to jobs and livelihoods, and enhance resilience to future shocks. 

The joint UNDP-UNCDF ReStart Fund is the financing mechanism of the RRFP, which addresses the ‘missing middle’ financing gap by aligning diverse sources of finance to enable recovery and resilience efforts. By providing catalytic capital and de-risking instruments to mobilize investment in revenue-generating projects, it strengthens financial sector liquidity through tailored financial instruments, such as grants and loans to MSMEs and guarantees to unlock access to finances from Multilateral Development Banks.

In addition to UNCDF, the RRFP has been backed by early endorsements from institutions such as: Agence française de dévelopment Group, the African Development Bank, European Investment Bank, World Bank, European Development Finance Institutions, g7+, Meridiam, and Shuraako Capital.

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