My thanks go to the United Arab Emirates and the Swiss Agency for Development and Cooperation for organizing this important event to galvanize action around adopting fresh approaches to raising additional resources for meeting the SDGs.

I have four points.

First, to meet the SDGs, we need to expand the investment frontier to the “last mile”. If growth continues on the same path as in the past, it will not be inclusive – particularly in the LDCs. So our focus is on the local economic space where people, frequently poor people, interact with their local economies. This “last mile” is where available resources for development are scarcest; where market failures are most pronounced; and where benefits from national growth tend to leave significant portions of the population excluded. But it is also in the “last mile” that the SDGs will be achieved; and it is our aim to show that “last mile” finance can generate resources from within, build productive and resilient local economies, and thereby also become not just dynamic beneficiaries of economic growth but also more dynamic contributors to growth.

Last mile finance works for local economies because it relies on strong partnerships between the public and the private spheres. Perceptions among investors of high risk, insufficient returns, and weak accountability at the local level – particularly in LDCs - translates to under-funded local development plans, under-developed and climate-vulnerable infrastructure, and inaccessible financing for poor households, women, and small enterprises.

Yet most economies already have resources that, when “unlocked” or activated, can create a virtuous cycle that reinvests domestic finance in sustainable and inclusive growth at the local level.

So second, we have models that show how strong public/private partnership can unlock resources at the local level; where public resources – including ODA – “prime the pump” for private investment.

Relatively small amounts of targeted capital funding can provide a powerful demonstration effect to private investors and larger public sector investors, by de-risking the local economic space and showing how investment in transformational local infrastructure can generate both social and financial returns. De-risking the local investment space crowds-in additional public and private resources that already exist in the economy – such as pension funds and bank liquidity - to invest in the local productive sectors. And local development accelerates SDG achievement and national growth.

Let me use an example from Tanzania. An investment of $250,000 in technical support and seed capital to structure a public / private partnership for hydropower has yielded an investment of $15 million from local banks. Scaled up, an investment of about $6m is expected to yield $100 million in investment from local banks in that country. That dynamic does three things: it creates the capacities to structure public / private partnerships to drive critical investment in productive infrastructure; it boosts overall investor confidence in the potential of investment in the local economic space; and it will serve as the foundation for a national platform for investable projects, with capacities to structure and manage them through public / private partnerships.

This gets resources flowing to secondary cities, peri-urban and rural areas so that pressing demands for modern energy, efficient public transportation, jobs for young people, resilient infrastructure, and basic services can be met.

Seed capital at a rate of around $10 per capita can unlock over ten times that amount in domestic investment in the productive sector. This increases local fiscal space, capital formation and, most significantly, output per capita, through the investments themselves and their multiplier effect. Third, innovative financing models and partnerships can expand access to formal financial services. This promotes entrepreneurship, lifts people out of poverty, raises domestic resources, and supports overall economic development and financial stability.

There are 2 billion unbanked people, most of them women.

With targeted ODA and other public resources, we can help financial service providers reach poor people and businesses with appropriate and responsibly-provided formal financial services.

Such innovative models support growth that comes from savings that already exist, but may be kept under a mattress or in informal savings groups.

Putting these savings into productive circulation in the local economy helps households manage their financial needs and gets small businesses going, creating jobs for young people and women.

To use one example, with an initial core contribution of $5 million, UNCDF mobilized $20 million from the Bill & Melinda Gates Foundation. We invested the funds in private financial service providers from the South, which brought about $100 million of their own equity to fund their expansion in LDCs. After 5 years, they had reached over one million depositors, mobilizing domestic loan and savings balances of nearly $500 million.

Such models overcome market failures by creating incentives for commercial banks to fund the growth of small and medium enterprises. And finally my fourth point: for these kinds of models to have truly transformative impact, they need to be widely supported and taken to scale.

This requires changes in how both public and private actors direct their resources. It requires a greater willingness to localize public finance – ODA, climate finance, and domestic dollars – to build on local capacities and the acceleration effect of local development. It requires a greater tolerance of risk for the initial capital to “prime the pump”; and it requires a commitment to investing “patient capital” that will see returns sometimes over a longer period than typical impact or donor investors currently expect.

The volume of resources needed to drive this kind of transformation is a fraction of what it will cost if we rely solely on traditional “resource transfer” models in pursuit of the SDGs.

It will require investments in those models that incentivize the private sector to increase financial intermediation at the local level – models that de-risk, that crowd in, that assure strong management, audit and accountability.

By supporting innovative financing models, we can reveal markets to domestic and international investors and support transformative change for local economies and poor households in the pursuit of the SDGs.

In this way, together we can help generate the resources needed to improve the lives of those whom the SDGs are designed to serve.