UNCDF and the SDGs

Local Development Finance and the SDGs

For UNCDF, local development is about improving quality of life at the grassroots level.

Inclusive growth requires that capital investments reach all geographic areas, and that the investment requirements of secondary cities, growing peri-urban areas and rural regions are fully financed. This accelerates transformative growth and retains value within local economies, avoiding patterns of high growth and low poverty reduction.

Increasing the capacity and fiscal space of local authorities can empower secondary cities, towns, and rural areas to contribute in important ways to national social and economic development goals. This calls for an approach that mobilizes public and private resources, especially at the domestic level, for investment in resilient local economies and societies.

UNCDF’s last mile financing models provide seed capital to de-risk the local economic space and support the development of a pipeline of bankable projects. This demonstrates to private and public sector investors how financing local infrastructure and essential services can generate both financial and social returns. It then crowds-in additional resources that already exist in the economy – such as pension funds and bank liquidity - to invest in local productive sectors.

Investment in small but transformational infrastructure projects at the local level - feeder roads, bridges, micro hydro, and climate adaptation – can help meet the SDGs. They create substantial development dividends for food security, women’s economic empowerment, renewable clean energy, climate resilience, and local economic development. This helps to increase local fiscal space, capital formation and, most significantly, output per capita, through the investments themselves and their multiplier effect.

Stay Connected