ABOUT UNCDF

As a hybrid development and finance organization with a unique capital mandate, the UN Capital Development Fund is positioned to act as a catalyst in high-risk markets, particularly in Least Developed Countries, Small Island Developing States, and fragile/conflict-affected countries.

These environments often face significant barriers to attracting private and public capital, hampering the pace and scale of progress to achieving meaningful development outcomes.

UNCDF stands out as the only non-credit-rated UN entity with the capacity to deploy blended finance solutions, de-risk investment and unlock private and public capital at the last mile.

Value Addition of UNCDF

Non-credit rated agency

UNCDF has increased appetite to provide concessional capital to below investment grade (C-category) ratings

Catalytic Use of Grant Capital

Enables UNCDF to take risks in high-need areas where private sector investment appetite is low, leveraging its unique position to support last-mile communities and underserved groups

Crowding-in Private Capital

Aims to amplify its impact by using $1 of grant capital to unlock $3–$5 (or more) of private capital, for transformative change

Deployment of Concessional Finance Instruments

Uses concessional finance to 1) improve returns to private investors that otherwise would not invest, and 2) facilitate affordable access to finance to end beneficiaries and their transition to commercial finance

Innovative Financing Models

Utilizes blended finance, social bonds, and impact funds to catalyze private investment

Unlocking Domestic Capital

Through partnerships and leveraging the UN’s in-country expertise, UNCDF blends catalytic and concessional finance to mobilize domestic resources and foster public-private collaboration

Market Creation

Creates commercially viable markets in high-risk sectors like plastics, oceans, and clean cooking, reducing perceived investment risks and driving private capital flow

Robust Impact Measurement

Adheres to international best practices for transparency, accountability, and trust, ensuring solid reporting to mobilize additional resources from donors and member states

HISTORY OF UNCDF

Governance and Funding

The UN Capital Development Fund was created in 1966 by the UN General Assembly. It is an autonomous, voluntarily funded UN organization, affiliated with the UN Development Programme.

While UNCDF is an autonomous organization, since 1967, the UNDP Administrator has also held the role of Managing Director of UNCDF, with the Executive Secretary taking primary responsibility for overseeing UNCDF’s day-to-day operations and programs.

Given the affiliation, the UNDP Executive Board also functions as the UNCDF Executive Board. The Executive Board—officially the UNDP/UNFPA/UNOPS Executive Board—consists of 36 member states from regional groupings that serve on a rotating basis and meet three times per year. About two-thirds of the Executive Board is comprised of programme countries, while the remaining third is made up of donor countries. The Executive Board is subordinate to the Economic and Social Council and, ultimately, the United Nations General Assembly.

The Administrator of UNDP is also the Managing Director of UNCDF. The Executive Secretary has been entrusted with administering the majority of UNCDF operations.

Similar to UNDP, UNCDF receives contributions from member states and international development partners. The financial architecture of UNCDF is comprised of core voluntary contributions, flexible non-core funding, and earmarked funds. In the past decade, UNCDF's annual financing has more than doubled.