Our quest to achieve the Sustainable Development Goals (SDGs) faces many challenges, but few as daunting as finding ways to attract funding for the Least Developed Countries (LDCs) that can de-risk the follow-on investment needed for localized implementation of the SDGs.

On 10 March 2022, a Permanent Representative (PR)-level lunch and roundtable discussion was held to promote UNCDF’s work. The convening was co-hosted by the Permanent Missions of Sweden and Switzerland to the UN and took place at the Permanent Mission of Sweden to the UN in New York. The discussion focused on the financial instruments at hand that allow UNCDF to go the extra mile in financing initiatives and catalyzing sustainable growth in the most challenging environments where it is most needed.

More importantly, the roundtable discussion revolved around discussing the evolution of UNCDF into a hybrid development organization and development finance institution, specifically to tackle the challenge of filling the missing middle financing gap in the development finance architecture. The “missing middle” challenge is understood as SMEs and other projects lacking the capability to acquire financing to achieve scale, because their capital needs are too large for microfinance and too small for commercial investors. The attendees agreed that micro-finance institutions, small and medium-sized enterprises, and local projects have critical roles to play in the achievement of the SDGs. The attendees also welcomed UNCDF’s role in filling the missing middle financing gap by way of its hybrid character.

Over the past several years, UNCDF has skillfully positioned itself in a unique way within the UN system, offering its toolbox of loans and guarantees; as well as grants, technical assistance, and policy guidance; in line with commitments agreed to in the Funding Compact. Furthermore, UNDCF supports the work of its Sister Agencies to complement their use of grants with UNCDF’s financial instruments to ensure that official development assistance (ODA) goes further in catalyzing greater amounts of capital, while having a more lasting and sustainable impact.

The roundtable attendees included:

• H.E. Ms. Karin Eneström, Ambassador and Permanent Representative, Permanent Mission of Sweden to the UN;
• H.E. Ms. Pascale Baeriswyl, Ambassador and Permanent Representative; Permanent Mission of Switzerland to the UN;
• H.E. Mr. Olivier Maes, Ambassador and Permanent Representative, Permanent Mission of Luxembourg to the UN;
• H.E. Ms. Fiona Webster, Ambassador and Deputy Permanent Representative, Permanent Mission of Australia to the UN;
• H.E. Mr. Hyunjoo Oh, Ambassador and Deputy Permanent Representative, Permanent Mission of Republic of Korea to the UN;
• H.E. Mr. Christopher P. Lu, Ambassador and Deputy Permanent Representative, Permanent Mission of the United States Mission to the UN;
• Mr. Olivier Richard, Head of Development and Climate Division, Permanent Mission of France to the UN;
• Ms. Sara Offermans, Head of Section, Development, Humanitarian Affairs & Human Rights, Permanent Mission of the Kingdom of the Netherlands;
• H.E. Mr. Tom Woodroffe, ECOSOC Ambassador, Permanent Mission of the United Kingdom to the UN;
• Mr. Marco Romiti, First Counsellor, Second Committee, Permanent Mission of Italy to the UN;
• Mr. Ahmad Al-Kuwari, Second Secretary, Permanent Mission of Qatar to the UN;
• Ms. Preeti Sinha, Executive Secretary, UNCDF;
• Mr. Anders Berlin, Director, LDC Investment Platform, UNCDF; and
• Mr. Abhisheik Dhawan, Sustainable Finance and Partnerships Specialist, UNCDF.

The roundtable discussion had a special focus on resource mobilization scenarios presented in UNCDF’s Strategic Framework 2022-2025, with specific mention of the need for core as well as flexible non-core through the Last Mile Finance Trust Fund (LMF-TF). The LMF-TF was launched in 2016 and has enabled UNCDF to test new models and innovative solutions, de-risk investments, and catalyze follow-on financing to help the Least Developed Countries achieve the SDGs. Since its launch, the LMF-TF has supported a range of UNCDF’s critical innovations, including the use of loans and guarantees, while nurturing new strategies on digital financial inclusion and municipal finance. The unique flexibility that the LMF-TF offers is even more valuable as the international community addresses the harsh impacts of the COVID-19 pandemic.

The LMF-TF began with one donor and five thematic windows; six years later, it boasts significant growth with eight additional donors joining the trust fund. UNCDF relies on the LMF-TF for critical funding, which is channeled through its thematic windows: Green Economy, Food Security and Nutrition, Economic Empowerment of Women and Girls, Financial Inclusion and Innovation, and Infrastructure and Services. Looking to the future, the LMF-TF thematic windows will mirror UNCDF’s strategic priorities: financial innovation; digital economies; local transformative finance; climate, energy and biodiversity; sustainable food system finance; and women’s economic empowerment.

UNCDF is grateful to the Permanent Mission of Sweden and Switzerland, represented by H.E. Ms. Anna Karin Eneström, Ambassador and Permanent Representative of Sweden; and H.E. Mrs. Pascale Baeriswyl, Ambassador and Permanent Representative of Switzerland; for being UNCDF’s flag bearers and co-hosts of last week’s valuable conversation. ‘UNCDF is a great bridge-builder between the development and the finance world’, concluded H.E. Mrs. Pascale Baeriswyl, Ambassador and Permanent Representative of Switzerland.