UNCDF Becomes First UN Entity to Access the European Union’s EFSD+ Guarantee Programme

The UN Capital Development Fund (UNCDF) today received a positive opinion from Operational Board of the European Fund for Sustainable Development plus (EFSD+) of the European Union for “The Guarantee Facility for Sustainable Cities.” The total funding approved for the facility amounts to EUR 154 million, with the formal agreement expected to be entered into force in 2023.

European Commissioner for International Partnerships Jutta Urpilainen said: “The guarantee programmes approved by the EFSD+ Board today will be key to deliver Global Gateway in partner countries and contribute to achieving the Sustainable Development Goals, by crowding in private sector funding.”

Under the management of UNCDF, the Guarantee Facility for Sustainable Cities will be used to support transactions that will pilot and test innovative infrastructure financing solutions that can be taken to scale, specifically in Africa and Southeast Asia. The Guarantee Facility for Sustainable Cities is a financial instrument aligned with the Malaga Coalition for a Financial Ecosystem that works for Cities and Local Governments by promoting global policy goals necessary to unlock finance for cities in the developing world. The Malaga Coalition is led by UNCDF alongside the United Cities and Local Governments (UCLG) in collaboration with Global Fund for Development (FMDV).

“UN Habitat is delighted to collaborate with UNCDF on the EU European Fund for Sustainable Development that includes the proposed ‘Cities Guarantee Fund’. We look forward to continuing this partnership to develop a transformative pipeline of sustainable urban development projects and to continue contributing to capacity building at local level. This initiative allows us to build a financial and policy ecosystem that is designed for cities and local governments,” said UN-HABITAT Executive Director Maimunah Mohd Sharif. “It complements the EU, UN Habitat and UNCDF support to the landmark 2021 Financing Sustainable Urban Development report. UN Habitat welcomes the European Union’s continued support for the sustainable urbanization agenda including the New Urban Agenda and SDG11. Through this partnership with UNCDF, we will be able to enhance what the UN system can offer to national governments, cities and communities as we work to meet the Sustainable Development Goals.”

“UNCDF is proud to be the first UN entity to partner with the European Union on its guarantee programme,” said Xavier Michon, Deputy Executive Secretary of UNCDF. “The approval for the Guarantee Facility for Sustainable Cities represents a powerful endorsement of UNCDF’s financial capabilities as well as its distinct role as the UN’s hub for subnational finance.”

The Guarantee Facility for Sustainable Cities complements other initiatives of the coalition such as the International Municipal Investment Fund (an equity fund managed by the benefit corporation, Meridiam) and the 34 country Local Climate Adaptive Living Facility (a UNFCCC recognized mechanism for local climate finance managed by UNCDF). The Guarantee Facility will be used to support city and transboundary investments of coalition partner city clients including: The Cities Investment Facility, jointly implemented by UNCDF and UN Habitat; The Blue Peace Financing Mechanism in the Gambia River Basin, jointly implemented by UNCDF, the Gambia River Organization for Development (OMVG) and Switzerland; as well as investments supported by the technical assistance facilities of UNCDF and ICLEI Transformative Actions Program (ICLEI TAP).

The European Union’s guarantee programme is a component of the European Fund for Sustainable Development Plus (EFSD+), part of the EU’s investment framework for external action. The EFSD+ includes guarantees, blended finance, technical assistance, and other support tools designed to raise financial resources for sustainable development from the private sector for inclusive economic development in EU partner countries.

"United Cities and Local Governments Asia Pacific is delighted to see the inclusion of ASEAN countries in the EFSD+ Guarantee Fund for Cities to be managed by UNCDF, the UN subnational financing hub. We are excited to collaborate with this important initiative for sustainable cities," said Bernadia Irawati Tjandradewi, Secretary General, UCLG ASPAC.

"ICLEI welcomes the EU EFSD+ Guarantee Fund for Cities to be managed by UNCDF, the UN subnational financing hub, as part of the Malaga coalition for a financial system that works for cities. We look forwards to working with this exciting initiative to promote sustainable, inclusive and transformative cities," said Maryke van Staden, Director of ICLEI's Carbonn Climate Center.

“We welcome the inclusion of African countries in the EFSD+ Guarantee Fund for Cities to be managed by UNCDF. We look forwards to working with this exciting initiative to promote sustainable, inclusive and transformative cities on the continent," Honourable Mayor Mohammad Sefiani, Mayor of Chefchaouen Morocco; President United Cities and Local Government Forum of Intermediary Cities; Global Covenant of Mayors Africa Ambassador; ICLEI Board Member.

"United Cities and Local Governments (UCLG) welcomes the EFSD+ Guarantee Fund for Cities to be managed by UNCDF. We look forwards to working with this exciting initiative to promote sustainable, inclusive and transformative cities as part of our joint efforts to build a global financial system that works for cities." Said Emilia Saiz, Secretary General UCLG.

“United Cities and Local Governments of Africa (UCLG Africa) welcomes the inclusion of African countries in the EFSD+ Guarantee Fund for Cities to be managed by UNCDF. The community of African cities and territories looks forward to working with this exciting initiative to promote sustainable, inclusive, transformative and resilient cities and human settlements in Africa, thus contributing a more just and peaceful world,” said Jean Pierre Elong Mbassi, Secretary General, UCLG Africa.