International financial institutions

About UNDP and the International Financial Institutions (IFIs)

The IFIs are an important source of development funding. They account for a large portion of the other resources (non-core) received by UNDP, as partners, particularly programme country governments, increasingly realize the added value brought by UNDP. Other resources received directly from IFIs (grants to UNDP) and through government cost-sharing reached an approximate $1.39 billion in 2004.

The majority of these resources is mobilized by UNDP Country Offices from the Regional Bureau for the Latin America and the Caribbean region providing support to the implementation of projects/programmes funded by governments with resources drawn from loans from the World Bank and the Inter American Development Bank. The implementation of projects/programmes funded from direct grants to UNDP plays a more important role in the other regions.

A "tripartite" relation

Be it loans or grants, the tripartite relation: Government-IFI-UNDP is key to making this form of cooperation work. In this partnership, government leads on the technical side in the preparation of the project/programme (mostly with the support of the IFI and at times UNDP), the IFI provides financial resources (loan or grant) and UNDP supports the implementation of the projects.

Apart from partnering around the provision of development services, the Poverty Reduction Strategy Papers and Millennium Development Goal processes provide unique opportunities for strengthening this partnership at the policy and upstream level- especially at the country level - and the capacity of country offices to deliver is fundamental to sustaining them. This is even more important as IFIs, particularly the World Bank, begin to participate in new modalities for delivering technical cooperation, placing new demands upon the capacities of programme countries.

UNDP has entered into formal agreements with some of the IFIs (the World Bank, the African Development Bank, the Asian Development Bank and the Inter-American Development Bank), and is working on additional agreements.