Luxembourg representatives with UNCDF staff during the 2019 Annual Consultations. © UNCDF 2019.

The United Nations Capital Development Fund (UNCDF) and the Government of the Grand Duchy of Luxembourg conducted their annual consultation this afternoon to outline the priorities that will define their collective work for 2019. The meeting took place on the sidelines of the High-Level Political Forum, which occurred this week at the United Nations.

This was the first consultation since Luxembourg announced that it would commit €1.2 million to support UNCDF’s work in 2019. €800,000 is pledged as regular, or core, resources, which enables UNCDF to use the funds without restrictions. The remaining €400,000 will be split between UNCDF’s two practices—financial inclusion, which expands the opportunities for individuals, households, and small and medium-sized enterprises to participate in the local economy, while also providing differentiated products for women and men so they can climb out of poverty and manage their financial lives; and local development finance, which shows how fiscal decentralization, innovative municipal finance, and structured project finance can drive public and private funding that underpins local economic expansion, women’s economic empowerment, climate adaptation, and sustainable development.

The consultation was an opportunity for UNCDF and the Government of Luxembourg to outline their priorities for 2019. One of the priorities involves country work in Burkina Faso. Luxembourg’s resources will support the Clean Energy for People Resilience (CE4PR) programme, which will focus on innovation in business models and digital finance in order to scale up innovative clean energy access solutions. A separate programme in Burkina Faso—Economic and Climatic Resilience Through Digital and Financial Innovations—is working to accelerate financial inclusion of vulnerable populations—specifically youth populations, farmers, and small businesses—by leveraging financial and digital innovations.

Another priority will focus on innovative finance to support small-and-medium sized enterprises in least developed countries (LDCs). Last year, UNCDF partnered with Bamboo Capital Partners to set up a pioneering investment vehicle—known as the BUILD Fund—designed to attract concessional and commercial growth finance to UNCDF’s pipeline of SMEs, financial service providers, and local infrastructure projects. Luxembourg is the first government to support this innovative financing vehicle specifically targeting LDCs, with a gift of $2 million in concessional capital in December 2018.

“Luxembourg has been a critical supporter of UNCDF. Their flexibility and ability to provide funds for innovation is allowing UNCDF to pilot new ways of making finance work for the poor,” said Judith Karl, UNCDF Executive Secretary. “We are grateful for Luxembourg’s generous support and look forward to continue building on our strong and productive relationship to support the Least Developed Countries in achieving their sustainable development goals.”

“Luxembourg’s collaboration with UNCDF has been fruitful over many years and our multiannual Partnership Framework Agreement illustrates this close relationship. Last year, we have started a new substantial programme with UNCDF in Burkina Faso,” said Manuel Tonnar, Director for Development Cooperation and Humanitarian Aid in the Ministry of Foreign and European Affairs. “Moreover, with the creation of a new impact investment fund for small and medium enterprises from LDCs, Luxembourg and UNCDF are currently working on establishing new ways of working together.”

The Luxembourg-UNCDF partnership dates back to 2008 and has since been amended in 2011 and in 2016. For more information, please refer to the 2018 UNCDF-Luxembourg Fact Sheet below: