Least Developed Countries (LDCs) typically face significant financing gaps in their efforts to achieve the Sustainable Development Goals (SDGs). The Addis Ababa Action Agenda and the 2030 Agenda both identify the need for multiple sources of finance to work together effectively and in new combinations. Yet, the international financial architecture is not designed to directly support small ticket size, higher risk transactions that – nevertheless – will be the key to achieving transformative impact at the local level and for those farthest behind.
One way to help address these financing challenges and mobilize additional finance for LDCs is to adopt a more systemic approach to provide support across the full investment continuum, using different sources of financing and involving different stakeholders. Making available a more comprehensive and integrated suite of financing and de-risking resources and instruments can help unlock investment from domestic and international commercial banks and flow of capital from capital markets in developed countries to LDCs.
This event, part of the 2021 ECOSOC Financing for Development Forum, discussed the role of different types of finance across the investment continuum and how various stakeholders in the current development finance architecture can work together to support investments in LDCs. The panelists shared challenges they face in investing in LDCs, including risk, small ticket size, and transaction complexity, and made recommendations for how support at various points across the investment continuum that can make a different in mobilizing finance for LDCs.
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