As Prepared for Delivery

Madame President, Members of the Executive Board, Excellencies, colleagues, and friends.

I am pleased to join you for the 2022 second regular session of the UNDP/UNFPA/UNOPS Executive Board.

I am here today to provide a brief overview of the report on the Annual Review of the Financial Situation of UNCDF in 2021, along with some observations on our funding outlook.

As we reported at the annual session of the Board in June, the financial picture for 2021 was encouraging as we reached record levels of both revenues and expenditures.

While this gives us confidence that we can continue to expand our catalytic financing role and fully fund our ambitious Strategic Framework resource targets going forward, we recognize that the challenging development financing environment will make this task more difficult.

On the revenue side, our total income increased by 80% to $137 million in 2021, up from $76 million in 2020.

However, contributions to regular resources remained stagnant at $10.8 million. Along with contributions towards core from UNDP of 3.9 million, the UNCDF total core resources made up 10.7% of our total revenues. This is well below the Funding Compact target of 30% by 2023.

Eleven partners contributed to core, down from 12 in 2020.

In light of this, increasing core resources is a top priority going forward. UNCDF leverages ODA received with our financial instruments, blended financing and investment vehicles. Therefore, core resources will be critical for us to act as a more strategic and innovative financing partner, not only to countries but also for the wider UN development system.

With regards to non-core resources, contributions increased to $122.8 million in 2021, up from $66.5 million in 2020. The increase is due mainly to large multi-year commitments received in 2021.

While non-core resource contributions have fluctuated year-to-year in the period from 2018-2021, the trendline is pointing clearly upward.

Our five top overall contributors in 2021 were the Multi-Partner Trust Fund Office, the European Union, the governments of Sweden and Switzerland, and the Bill and Melinda Gates Foundation. We received financial contributions from a total of 42 development partners in 2021, compared to 43 in 2020.

Resources received through the Multi-Partner Trust Fund Office increased significantly and represent 20.5 per cent of total resources, illustrating our increasing collaboration with other UN entities.

Our Last Mile Finance Trust Fund also remains critical for attracting flexible non-core resources. In 2021 the Fund received $15.7 million with Luxembourg joining as a new donor and Switzerland providing a significant multi-year contribution.

The 2021 revenues of $137 million put us well on the way towards achieving the overall “ideal” resource target of $150 million per year in the previous Strategic Framework.

With our new Strategic Framework 2022-2025 our ambition is to further grow and scale our operations and impact. By 2025, our aspiration is to evolve into a $200 - $250 million per year organization.

This would, among other things, allow for adequate presence in all 46 LDCs and a well-resourced LDC investment fund - the BRIDGE Facility, which also could be used by the wider UN development system. This Facility also has the potential to serve as the dedicated investment vehicle for the LDCs as per the Doha Programme of Action - to be further discussed by the Least Developed Countries in Doha, Qatar in March 2023.

To achieve this, we are increasing our efforts to diversify our pool of contributors. Over the past year, we have initiated engagement with a range of potential new partners, including the UK, Germany, select Gulf countries and private philanthropies such as Bloomberg and Builders.

When it comes to our expenses, we saw an increase by $15 million from 2020, to a total of $97 million. 90 per cent of our resources were spent on programme activities and 86% were delivered in least developed countries.

Over the last four years we have consistently increased our delivery from a base of $64.2 million in 2018. This demonstrates that we have the capabilities to grow and manage increasing amounts of resources effectively.

Beyond expenses, a special feature of UNCDF is our ability to issue and manage loans and guarantees. As of December 2021, we had 23 concessional loans totaling $3.0 million and two guarantees totaling $0.3 million outstanding.

We have piloted this capability over the past few years and established strong processes to select and manage our loan and guarantee transactions.

Based on this, we are ready to scale up our investment operations. To date we have mobilized some $15 million for our on-balance sheet investment vehicle, the BRIDGE Facility, against a target of $50 million.

Excellencies,

In our new Strategic Framework we emphasized that our mission is to serve as the “UN flagship catalytic financing entity for the LDCs”. We aim to use our limited resources in a strategic and catalytic manner to trigger additional flows of finance into markets that currently are served by few if any other financial institutions.

As such, we fill a critical gap in the development finance architecture, helping to de-risk SDG investments and prime them for more commercial financing.

We believe that our catalytic investment model offers our funder great value for money. Our investment capital is revolving by nature as recipients repay their loans and the repaid capital is then reused for new investments. Furthermore, our grants and technical assistance are used to explicitly catalyze additional capital.

As such, a dollar invested in UNCDF hold the promise to drive more significant and sustained development impact.

We look forward to your continued guidance and support as we seek to scale our efforts to catalyze SDG financing for the LDCs.

Thank you