UNDP and International Financial Institutions
Partnerships with International Financial Institutions (IFIs) are critical for achieving the Sustainable Development Goals (SDGs), given the crucial role they play in support of sustainable development, their technical and policy expertise, the large-scale financing they contribute and catalyse, and the efficiencies that can be achieved when working complementarily.
UNDP works with over 20 of the world’s largest IFIs in 77 countries across five regions across UNDP’s six Signature Solutions through joint analysis and assessments, SDG-aligned tools and methodologies, knowledge products and policy support, capacity development and project implementation to support governments’ efforts towards sustainable and inclusive growth.
Since 2017, UNDP has mobilized over US$1.85 billion from IFI partners (both directly through grant contributions and indirectly through government financing to support loan implementation). As the most extensive development network in the UN system and the largest implementor of climate financing in the UN system, partnering with UNDP offers access to multi-partnership platforms that support governments to leverage the funding, technical expertise and advocacy from a broader range of public and private development financing sources, including vertical funds such as the Green Environment Fund (GEF) and the Green Climate Fund (GCF).
By joining forces, UNDP and IFIs leverage their comparative advantages to support national development priorities and maximize development impact on the ground.
How can UNDP add value to IFIs and maximize impact?
UNDP offers access, impartiality, and expertise to help IFIs maximize the development impact of every dollar invested. UNDP offers:
- Most extensive presence of the UN system, operating in 170 countries and territories, including fragile contexts.
- Long-standing, trusted relationships with Governments and a whole-of-government approach to support the implementation of national development priorities and deliver and leverage development financing, including loans.
- Effective project implementation, monitoring and evaluation oversight, risk management, development of bankable projects, and capacity development expertise
- One-stop-shop to solve high-volume/transaction issues (e.g. recruitment, procurement, financial management services)
- Convening power and integrator role at the country-level
- Leader in transparency and SDG implementation .
How UNDP collaborates with IFIs
Programmatic collaboration: UNDP supports governments in the implementation of loans and provision of technical assistance or receives direct grants from IFIs, especially for crisis response in fragile contexts.
UNDP can help governments and IFIs
- Fill gaps in project implementation when there are gaps in the country’s ability to implement IFI loans or grants, such as in fragile and post-conflict situations and other challenging operating environments,
- when the country has lost creditworthiness or financing is difficult to arrange
- when loans/grants are not performing
- When the IFI or the government needs in-country policy analysis and technical assistance to help overcome bottlenecks or implement at the national or sub-national level.
- Monitor loans or grants, particularly in new sectors or areas for the IFI partner, in situations where project work involves many stakeholders (many ministries and/or partners at the local level) or in politically sensitive contexts.
Knowledge and research: UNDP partners with IFIs to develop joint research, knowledge products, and publications for policymakers, governments, development finance and other development sector practitioners, such as the Pathways for Peace report with the World Bank; Guide for Integrated Planning in Africa with the African Development Bank; and the annual Asia-Pacific SDG Partnership report with the Asian Development Bank and UNESCAP.
Joint Assessments and Diagnostics tools: UNDP partners with IFIs on joint analysis and assessments, including joint Post Disaster Needs Assessments and Recovery and Peacebuilding Assessments; COVID-19 Recovery Needs Assessments; and Socio-economic Impact Assessments and Response Plans.
Institutional capacity building, training and knowledge exchanges: UNDP collaborates with IFIs on platforms; staff exchanges and secondments; joint capacity development training and technical assistance; development finance policy areas; and joint events and advocacy.
Sustainable finance: Through UNDP’s dedicated Sustainable Finance Hub, UNDP works with IFI and DFI partners to jointly deliver and mobilize financial expertise to governments and development expertise to the private sector; co-design instruments for the delivery of vertical funds and innovative instruments; and support sustainable finance architecture alongside ministries of finance and their partners at country level. More information is available in Partnerships for Sustainable Finance: UNDP and International Financial Institutions Accelerating Finance for the Sustainable Development Goals (October 2022)
Partnerships with IFIs through forums, including the G20 Sustainable Finance Working Group (SFWG). UNDP, as a Secretariat for G20 SFWG, supported the development of the G20 Sustainable Finance Roadmap to help focus the attention of G20, IFIs and other stakeholders to strengthen the alignment of all sources of financing for sustainable development.
For more information, please get in touch with firstname.lastname@example.org for the Financial Institutions Partnerships team in UNDP’s Bureau for External Relations and Advocacy (BERA).