In Focus

Investing in UNCDF

UNCDF’s four window funding architecture provides maximum flexibility for contributing partners and is designed to allow robust and scaled-up programming in up to 40 LDCs.

Window 1: CORE

Core resources remain the bedrock of UNCDF funding. They allow UNCDF to plan for strategic, integrated country presence in Least Developed Countries (LDCs) and bring a range of tools to help governments achieve their Agenda 2030 Commitments.

  • They allow UNCDF to pilot and test innovative new models. UNCDF’s current core funding seeds the innovations that will be the flagship programs of the future.
  • They fund the organizational backbone of UNCDF, help ensure the highest standards of transparency and accountability, enable rigorous monitoring and evaluation, assure retention of high-quality staff with deep technical expertise, and provide seed capital for our programs.
  • They also UNCDF to maintain an on-going country level presence for the required duration of our maturity model. Our experience has shown that we need, on average, 12 to 18 months to develop a new programme, secure government and other stakeholder support, establish the multi-stakeholder partnerships needed to keep the programme running.

The target in UNCDF’s Strategic Framework for 2014-2017 is $25 million annually to ensure programme operations in 40 LDCs and support UNCDF’s work to leverage official development assistance (ODA) to secure additional public and private resources for investment.

Window 2: LAST MILE FINANCE TRUST FUND

Contributions to the Last Mile Finance Trust Fund Flexible provide the most flexible non-core resources enabling UNCDF to allocate based on its strategic priorities.

  • Through the Last Mile Finance Trust Fund, donors can access a range of UNCDF interventions, expertise, and country-level presence through a common programming and oversight framework more efficiently than through support to individual programmes.
  • Contributions to the Trust Fund incur significantly reduced transaction and monitoring costs, as the Fund uses common program documents and consolidated annual results reporting for all its donors.
  • The common results reporting also ensures that lessons learned are shared and disseminated among development actors.

Window 3: EARMARKED NON-CORE

  • Earmarked non-core funding is currently the largest source of UNCDF’s annual income.
  • It is funding directed by donors to specific country, region, or thematic programmes.
  • For example, earmarked non-core is used for the regional programmes such as the Pacific Financial Inclusion Programme (PFIP) or country-specific programmes such as expanding the use of mobile money in Tanzania.

Window 4: LDC INVESTMENT PLATFORM

  • The LDC Investment Platform– through grants, reimbursable grants, loans, and guarantees – provides seed funding to investments in LDCS that are deemed too small or too risky by traditional investors. This works to de-risk and “prime the pump” for domestic and foreign investors to participate in local initiatives.
  • This platform allows the greatest flexibility for UNCDF to apply the optimal funding instrument for each business need, and to crowd in domestic and international investment.
  • The primary development objective is to increase the number and sustainability of new and existing financially viable, innovative development initiatives, through UNCDF programmes and projects.
  • It encourages public and private investors to supply investment financing for the consolidation and scale-up of economic initiatives with a proven development impact.

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