UNCDF Launches Last Mile Finance Trust Fund to Pilot and Scale up Innovative Finance Models
The Government of Sweden and the United Nations Capital Development Fund (UNCDF) today launched UNCDF's Last Mile Finance Trust Fund, a multi-partner trust fund to support Least Developed Countries (LDCs) in their pursuit of the Sustainable Development Goals and their graduation targets in the context of the Istanbul Programme of Action.
The Last Mile Finance Trust Fund is structured as a flexible funding vehicle for UNCDF to allocate resources to the “last mile” – where development challenges are the greatest and where resources are most scarce – through thematic windows highly relevant to LDC development opportunities and challenges. The five thematic windows of the trust fund are: the Green Economy; Food Security and Nutrition; Infrastructure and Services; Economic Empowerment of Women and Youth; and Financial Inclusion Platforms and Technology/Innovation Frontiers. In addition, the Trust Fund has a Country Expansion window to enable UNCDF to take its finance models into the maximum number of LDCs possible and to strengthen programmes in LDCs based on demand.
“We are very excited to be launching this new Trust Fund, which we believe is highly relevant to the development opportunities and challenges LDCs face. Through this Trust Fund, UNCDF will be able to innovate and replicate its successful finance models, leverage additional resources, and consolidate and ultimately scale up these models in more LDCs,” said Ms. Judith Karl, UNCDF Executive Secretary. “We are very grateful that the Swedish Agency for International Development (Sida) has generously agreed to be the initiating contributor to this Trust Fund. We believe this Trust Fund offers development partners who will join tremendous value added as a cost-effective mechanism to direct resources towards a focused set of strategic themes and countries,” she added.
Through this Trust Fund, UNCDF will be able to innovate and replicate its successful finance models, leverage additional resources, and consolidate and ultimately scale up these models in more LDCs.
Judith Karl, Executive Secretary, UNCDF
The new trust fund builds on the successful four-year experience with the Partnership Framework for Global Initiatives for Inclusive Growth and Sustainable Development (PFIS) 2012-2015, supported by the Swedish Agency for International Development (Sida), the Norwegian Agency for Development Cooperation (Norad) and the Austrian Development Agency (ADA).
“Sweden appreciates the UNCDF as a flexible and agile organization that can have a catalytic effect on investment for development. We know from experience that the UNCDF can significantly leverage relatively small contributions. The UNCDF’s innovative business model and creative approach paves the way for sustainable investments and leveraging of public and private resources, in support of national development priorities,” said H.E. Ms. Isabella Lövin, Minister for International Development Cooperation and Climate. “Sweden is proud to support UNCDF and its partner countries in this endeavour and we hope that our experience and the discussions today will inspire others to follow suit. Supporting the Last Mile Finance Trust Fund is a step in fulfilling the promise of leaving no one behind,” she added.
Joining Ms. Karl and H.E. Ms. Lövin on the panel were H.E. Mr. Aurélien Agbénonci, Minister of Foreign Affairs of Benin, and H.E. Mr. Masud Bin Momen, Ambassador and Permanent Representative of Bangladesh to the United Nations and Chair of the Coordination Bureau of LDC Group.
The new trust fund – covering an initial five year period from 2016-2020 and with a resource mobilization target of $50 million for 2016 – will pilot models around the new frontiers of innovative finance in line with the 2030 Agenda, provide a flexible vehicle for channeling resources to shared strategic priorities, and assure learning within the community of development actors.
For more information on the Last Mile Finance Trust Fund, please visit www.uncdf.org/lmftf and/or contact UNCDF’s Partnerships Policy and Communications Unit at firstname.lastname@example.org or +1 (212) 906 – 6565.
UNCDF is the UN’s capital investment agency for the world’s 48 least developed countries. With its capital mandate and instruments, UNCDF offers “last mile” finance models that unlock public and private resources, especially at the domestic level, to reduce poverty and support local economic development. UNCDF’s financing models work through two channels: financial inclusion that expands the opportunities for individuals, households, and small businesses to participate in the local economy, providing them with the tools they need to climb out of poverty and manage their financial lives; and by showing how localized investments -- through fiscal decentralization, innovative municipal finance, and structured project finance -- can drive public and private funding that underpins local economic expansion and sustainable development. By strengthening how finance works for poor people at the household, small enterprise, and local infrastructure levels, UNCDF contributes to SDG 1 on eradicating poverty and SDG 17 on the means of implementation. By identifying those market segments where innovative financing models can have transformational impact in helping to reach the last mile and address exclusion and inequalities of access, UNCDF contributes to a number of different SDGs.
Sida is a government agency working on behalf of the Swedish parliament and government, with the mission to reduce poverty in the world. Through our work and in cooperation with others, we contribute to implementing Sweden’s Policy for Global Development. We work in order to implement the Swedish development policy that will enable poor people to improve their lives. Another part of our mission is conducting reform cooperation with Eastern Europe, which is financed through a specific appropriation. The third part of our assignment is to distribute humanitarian aid to people in need of assistance. We carry out enhanced development cooperation with a total of 33 countries in Africa, Asia, Europe and Latin America. Sida’s mission is to allocate aid and other funding. We participate in the advocacy work for Sweden’s prioritized issues within the international development cooperation field, and we are in constant dialogue with other countries and international organizations. In recent years, Sida has intensified its work on financing for development by introducing a range of initiatives to facilitate private and institutional investments in Africa, such as Power Africa and Challenge Funds. Sida has also focused its efforts on lowering the investment risks by mobilizing institutional capital that will accelerate development cooperation by engaging financial partners such as banks, pension institutions and philanthropists.