This report highlights the achievement of the Local Finance Initiative (LFI) Programme in terms of investments and the capacities required to facilitate domestic capital mobilization for sustainable development. Specifically, transformative investments with a total value of $50.6 million are either completely implemented and operational or are at different stages of approval and disbursement.

It is comprised of 61 per cent owners’ equity and 12 per cent UNCDF capital, with the remaining 27 per cent being the amount of additional domestic and international capital mobilized to invest in these projects. In addition to the above, another $158 million is the total value of the LFI current active investment pipeline under preparation and structuring by the LFI in six countries as of 31 December 2019.

The case studies, investment stories, challenges and lessons learned presented in the report, highlight the need for support to LDCs to build national capacities in key areas to remove bottlenecks to fund the SDGs. LFI is a “body of knowledge” and is part of a broader maturity model of UNCDF’s innovation, learning and replication, and is now ready for implementation at scale.

The Local Finance Initiative (LFI) Programme is a UNCDF investment mechanism that can enable LDCs to unlock the flow of domestic capital to invest in sustainable development. The LFI mechanism (Catalytic capital + Technical Assistance + Risk Mitigation Strategies) has proven that transformative local development investments can tap into additional capital from both public sector and domestic capital markets. Facilitation by LFI is a way of making public funding go further by reducing risks so the private sector and other partners can invest in development projects.

The scalability of the programme is possible within the context of:

• (i) the UNCDF local economic development approach, where currently the LFI has been embedded into UNCDF country programs and replicated in Lesotho, Uganda, The Gambia, Guinea, Bangladesh and Tanzania; and
• (ii) replication to more developing countries as their own version of national capacities for mobilizing resources for the SDGs. UNCDF’s use of LFI and its risk mitigation strategies is critical for leveraging limited public funds to unleash domestic, international and public capital to invest in and scale-up sustainable development.

LFI’s work with local governments and rural SMEs has resulted in transforming idle rural resources and diversification of rural economies, provided clean and affordable energy, supported women’s economic empowerment and enhanced the ability for local governments to create new own sources of revenue in order to provide quality service to its citizens.