Sustainable Development Goals Investment Initiative

What is the project about?

To achieve the SDG agenda, financial resources of the private sector is given greater importance especially for building back better after COVID-19. With an aim to empower investors through impact intelligence products around bankable investment areas in countries with material SDG contribution, UNDP SDG Impact launched the “SDG Investor Maps”, and UNDP Turkey implemented the SDG Investor Map in Turkey with the technical assistance provided by the IICPSD.

As a further and comprehensive step, the project addresses the challenges impeding the flow of private capital towards the achievement of the SDGs and create an enabling environment for facilitating the SDG-anchored investments in Turkey.

What has been the situation?

Addressing global challenges, Sustainable Development Goals (SDG) provide a blueprint to achieve a more equitable and sustainable future for all. Substantial financing is required to achieve the SDG Agenda by 2030 as US$5-7 trillion is needed annually for global investments. Developing countries alone face a massive funding gap of US$2.5 trillion annually in SDG investments (World Investment Report 2014, UNCTAD). To bridge this gap and alleviate the financing burden on the shoulders of governments, donor agencies and multilateral development banks, it is essential to partner with the private sector and expand SDG-related investments by unlocking private capital. Accounting for 60% of GDP, 80% of capital flows and 90% of jobs in an average developing country, private sector’s engagement in development cooperation is more than vital.

Despite the potential private sector investments offer, many developing countries attract low levels of domestic and foreign investment due to reasons such as limited data and insights about investment opportunities and risks; limited capacities and networks; and high real or perceived policy and regulatory risks.  Unfortunately, in addition to these challenges, the COVID-19 pandemic is estimated to cause a sharp decrease in global FDI flows, which are forecast to decrease by 40% in 2020 to below US$1 trillion from their 2019 value of US$1.54 trillion (World Investment Report 2020, UNCTAD). Developing countries are expected to see the largest fall in FDI given their high dependence on global value chain intensive and extractive industries and limited ability to implement effective support mechanisms. However, there is a growing interest among investors to attribute capital into activities that deliver strong financial returns while reducing poverty and inequality, advancing health and education, and protecting the environment.

What is our mission?

UNDP aims to promote impact and SDG investments in Turkey. Given the high policy momentum, UNDP is advantageously positioned to leverage the power of its SDG investments portfolio by catalyzing an investment ecosystem which would channel private sector capital towards building economic resilience and spurring growth to address the socioeconomic impact of COVID-19. UNDP promotes private sector’s contribution for achieving Sustainable Development Goals with various tools including awareness rising, experience sharing, capacity building and networking.

How are we doing this?

UNDP Turkey Country Office and IICPSD joined efforts to establish the “SDG Investment Initiative” based on previous successful collaboration. The initiative is established to structure efforts around promoting SDG-anchored investments with an active private sector engagement to mobilize private sector capital and blended financing towards SDG-anchored investment areas with high potential to accelerate economic recovery and growth following the impact of COVID-19. The initiative is designed to consist of three targeted outputs; (i) strengthened local capacity to structure, monitor and evaluate SDG-anchored investments to foster expertise and transparency in transactions; (ii) increased awareness and inter-industry collaboration to catalyze synergies in private sector for SDG advancing investment opportunities; (iii) improved matchmaking and deal sourcing opportunities to promote private sector transactions in SDG-aligned investment areas. The results of the project are expected to be utilized for the design of a larger programme on impact investment with enhanced national capacities.

How will Turkey benefit?

The project will accelerate the efforts for promoting impact investing and SGD investments. In coordination with national stakeholders in investment ecosystem, UNDP will catalyze efforts on agenda setting and increasing investments related to SDGs. The project is designed as a pilot action for the perspective of the UNDP Turkey, which is expected to enable further actions on developing impact and SDG investments.