As Prepared for Delivery

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

I am pleased to join you today for the 2023 annual session of the UNDP/UNFPA/UNOPS Executive Board to report on the 2022 results of the UN Capital Development Fund.

Thank you Associate Administrator Rao-Monari for your remarks.

Let me first of all emphasize that despite an extremely challenging global environment for development assistance and for the least developed countries, which are UNCDF’s primary partners, we produced solid results in 2022 and continued our steady growth over recent years. In many ways, 2022 was a record-breaking year.

Our achievements are a testament to the resourcefulness of UNCDF staff around the world, and to the trust our partners place in our work.

Second, allow me upfront to also address the speculations and misinformation that are circulating about the future of UNCDF and its relationship with UNDP. Let me state categorically that there are no plans or proposals for merging UNCDF into UNDP.

On the contrary, as mentioned by the Associate Administrator, over the past few months we have worked closely to define solutions to allow UNCDF and UNDP to increase collaboration, by essentially enabling greater use of UNCDF’s loans, guarantees and other financial instruments in UNDP’s programming. This seeks to further maximize synergies and avoid overlaps between our organizations.

Now, if I may, let me come back to the topic of this session and briefly highlight some of our main results in 2022.

UNCDF’s overarching objective, as per its Strategic Framework, is to help accelerate green and inclusive economic transformation in the LDCs.

We do this in several ways, including by supporting development and scaling of financial and digital services, and by investing in climate resilient local infrastructure that help individuals and small enterprises access economic opportunities.

In 2022, we helped develop and scale up some 220 digital and financial services and we supported more than 350 local investments in climate resilient infrastructure. Through our ongoing programmes, these kinds of investments benefit more than 400,000 micro, small and medium-size enterprises and some 18 million people.

For example, in Uganda we supported development of some 19 digital services that 1.1 million people and over 29,000 small businesses engaged with.

Regarding our infrastructure investments, in Somalia for example, we worked through the Local Development Fund, established with UNCDF support, to provide performance-based grants for 81 infrastructure projects in 36 local government areas.

A second outcome in our Strategic Framework is to strengthen market systems and public and private financing mechanisms to enable greater investments in green and inclusive economic development.

At the end of 2022, some 40 SDG focused funds and financing mechanisms were under development or already in operation with UNCDF support. These range from global-level blended finance funds, to more targeted national and sub-national funds and financing mechanisms.

For example, in Senegal we helped the country’s sovereign wealth fund to manage and expand a Women’s Economic Empowerment Fund, the WE! Fund, to invest in women-led small businesses.

In Cambodia, we have helped establish the Credit Guarantee Corporation of Cambodia, which was capitalized with $200 million from the public sector budget. To date, the Corporation has guaranteed a total $92 million in loans from domestic banks for local SMEs, with 35% for women-owned businesses.

In late 2022, we were also cleared by the European Union for a 140 million Euro guarantee under the European Fund for Sustainable Development+ guarantee programme, to help attract private capital for investments in urban infrastructure. We are the only UN entity that has benefitted from this EU guarantee programme.

We also supported policies and strategies that help establish national and local market systems to underpin mobilization of SDG finance and investments. For example, we supported development of 13 national financial inclusion strategies in Africa and Asia Pacific and 31 countries to use UNCDF’s Inclusive Digital Economies Scorecard as a guide to pursue and monitor digital economy transformation.

As a catalytic financing entity, a third objective for UNCDF is to catalyze additional flows of public and private SDG investment capital.

In 2022, we issued some $44 million in catalytic grants, loans and guarantees, which in combination with our technical support for externally managed funds and financing mechanisms helped catalyze some $600 million of public and private SDG investment capital.

For example, this included the blended finance BUILD Fund, which achieved a first capitalization of $49 million along with a $10 million guarantee for investments in small businesses in LDCs.

In addition, the International Municipal Investment Fund for urban infrastructure was capitalized with €150 million euro and the Global Fund for Coral Reefs received a capital investment of $125 million.

In terms of our institutional results, we had a record year in resource contributions to UNCDF for a total amount of $170.5 million.

Funding from UN pooled funds and other UN entities became the largest source of funding, representing 51% of non-core.

However, regular resources declined by 7.5% to $13.6 million and we expect a further decline in regular resources by up to 40% in 2023. This severely limits our ability to ensure presence in all LDCs and our ability to innovate and pilot new financing solutions. It also puts our ability to provide required levels of oversight at risk.

Combined with the growth in non-core resources, the decline in core is a red flag for our ability to manage a growing organization.

Given the critical role of regular resources in enabling us to implement our strategic framework and provide the required levels of oversight, we are completing a comprehensive audit of the organization to ensure proper oversight functions and processes are in place and can be strengthened and maintained as needed. We expect to be able to share the final audit report in the third quarter.

On the expenditure side, we saw an all-time high of $118 million in delivery in 2022, which continued the consistent and steep increase in expenditures since 2018 ($64.2 million in 2018).

On gender equality, approximately 68% of our expenditures were on programmes with gender equality either as a primary objective or as a significant objective. However, with regards to UNCDF staffing, we continue to see a gap in gender equality at the mid-to-senior levels where there the proportion of female staff falls short of our 50% target (33%).

To address this gender gap, and to also strengthen our women’s economic empowerment programming, we have developed a new gender strategy for UNCDF. We are also pursuing necessary reforms by strengthening oversight over investments, engaging a chief risk officer and an RBM specialist, and are waiting for the in-depth performance audit of the Organization due this month to start implementing much needed reforms.

I am confident that, with these reforms, UNCDF will meet the promise of the Strategic Framework of a growing, effective and efficient development organization, hosted by UNDP, but available to the United Nations development system, to serve to unlock public and private capital for the poor.

Collaboration with the wider UN development system is a top priority for UNCDF and we continued to expand and deepen this partnership. We see a growing demand from UN partners for our financing expertise and instruments, which are highly complementary to wider UN technical expertise.

While UNDP continues to be our main partner, we also entered into a number of new global partnership agreements with other UN entities in 2022.

For example, we launched a new partnership with UN-Habitat on the Cities Investment Facility (CIF), which seeks to advance investments and sustainable financing solutions for cities, mainly in LDCs.

We also signed a global agreement with the World Food Programme to provide concessional financing solutions for agribusinesses in LDCs. The first joint financing initiative under this agreement will be launched in Rwanda later in 2023.

We continued to expand the Global Fund for Coral Reefs, which UNCDF provides the secretariat for and where we combine our financing expertise with the programmatic capabilities of UNDP and the scientific expertise of UN Environment, with the aim to mobilize action and investments to protect and restore coral reefs. In 2022, the Fund’s reach doubled to 12 countries and mobilized almost 200 million dollars with a coalition of nearly 50 public and private partners.

In addition to expanding our collaboration with the UN development system, let me highlight two other partnerships that are intrinsic to expanding UNCDF’s offer and increasing our impact.

First, we need to continue to deepen collaboration with governments of our programme countries to ensure that our financing solutions are fully country-owned and scalable. The experience with the Local Climate Adaptive Living Facility (LoCAL), which is guided by a Board of LDC Ministers and government officials, demonstrates the importance of this partnership.

Second, we cannot mobilize SDG finance at scale without close partnerships with the private sector. While we already work with investment fund managers, local banks, fintech companies and others, more efforts are needed to unlock larger commercial investors to channel capital to last-mile investments in LDCs.

This will include enhancing collective efforts to develop pipelines of investment-ready and high-impact projects and businesses, which continues to be a major barrier to unlock private SDG finance.

Excellencies, colleagues,

While the current economic environment in LDCs makes attracting financing for SDG investments extremely challenging, we believe that our support for blended finance solutions, digital economies and local finance systems nevertheless show promising results that make a real difference in people’s lives.

To unlock further financing to help deliver on the Doha Programme of Action and accelerate SDG progress in the LDCs, we will continue our efforts to expand partnerships with the wider UN development system, with governments and the private sector.

We count on the Board’s continued support and engagement in this regard.

Thank you.