CREATING MARKETS AND OPPORTUNITIES FOR INVESTING IN THE SDGs
We support sponsors and consortia submitting proposals with advisory and mentoring.
Investor Matching And Facilitation
We facilitate the matching of SDG financing leaders with sponsors and consortia submitting proposals.
We provide proof of concept design grants of up to US$ 200,000 and catalytic grants of up to US$ 10 million for innovative blended finance mechanisms. UN agencies are our grantees.
Learning And Sharing
We facilitate peer exchanges and learning communities and promote the sharing of lessons learned.
Grantees and Partners
Our grantees and partners manage and capitalize impact funds, issue thematic bonds, organize lending and credit enhancement schemes, co-manage enterprise innovations funds, and run accelerators for impact enterprises. As the financial products will reach the market, we’ll seek investors with matching investment strategies. Four financial instruments have reached the market to date, two sovereign SDG bonds and two private impact funds.
Even before the COVID-19 pandemic, there was a significant financing gap to achieve the SDGs. In response, many governments and key financial players are calling for more ambitious action and demanding stronger integration of the SDGs – the world’s compass for a sustainable word – into both public and private investment decisions. Despite such calls, progress is slow. Available public and private finance are still not channeled towards sustainable development at the scale and speed required.
Blended finance is an innovative approach to allocating financial resources toward the SDGs that has already mobilized US$ 152 billion or developing countries. Despite efforts to deploy blended finance in recent years and the emergence of an impact-first pipeline, proposed business models are often not ‘investment ready’ and remain unattractive to private investors. The lack of institutional ecosystems, the limited size and sophistication of capital markets, limited capacity of intermediaries to connect enterprises with funding, insufficient government support for the market, absence of suitable exit options and lack of financial knowledge are just some of the many challenges that hinder private investment. Nevertheless, the demand for blended finance continues to grow and the responsible investing space is booming with record growth in blended finance that ranges from Environmental, Social, and Governance (ESG) to impact-first strategies.
The UN system, through the Joint SDG Fund, is committed to building bridges and forging partnerships that will help unlock capital for the SDGs with innovative blended finance solutions tailored to country-level needs. This cannot be done unless public and private capital reaches the people, geographies and economies that need it the most.
The Joint SDG Fund provides design grants up to US$ 200,000 and catalytic grants up to US$ 10 million that are channeled to UN agencies. Design grants demonstrate an impact-driven investment scheme facilitated by UN agencies, development banks and public and private investors. Our catalytic grants provide the capital to deploy de-risking and fund technical assistance facilities. To date, we have provided catalytic grants to 10 joint programmes and extended 28 design grants.
Our innovative line-up of 28 funded programmes, pipeline, and incubated proposals are clustered into four overarching impact areas: energy and climate action, the blue economy, food systems and agriculture, and leaving no one behind. These impact areas connect to the major transitions our societies and economies need to embrace to accelerate the achievement of the SDGs.
Our funded portfolio has 5 programmes focusing on climate and energy, 2 programmes focusing on the blue economy and oceans, 2 programmes focusing on agriculture and food systems, and 1 programme focusing on social impact to leaving no one behind. All programmes have cross-cutting aspects of gender, climate sensitivity, and mainstreaming human rights. Together these programmes are building funds, ocean based blended finance transactions, financing facilities, SDG Bonds, guarantee facilities and a development impact bond.
This microsite provides dedicated pages for all the 28 funded programmes, pipeline, and incubated proposals to be showcased to potential partners and investors. Each financial instrument that has reached the market and has been supported by the Joint SDG Fund is also separately featured. Four financial instruments have reached the market, two sovereign SDG bonds and two private impact funds. We look forward to fostering the implementation of this ambitious portfolio by incubating new concepts that can leverage public and private capital for the SDGs.
The Joint SDG Fund provides catalytic grants to unblock SDG investment opportunities to accelerate countries toward the SDGs. Grants are provided to UN agencies in countries to demonstrate investment concepts with support provided by a consortia of UN agencies, development banks, government ministries, international financial institutions, and public and private investors. In addition to financial support, the UN supports the development of the enabling environment through technical support for more effective SDG investment at country level. In parallel, we also provide funding to support the creation of the wider national ecosystem for investments in our Enabling Environment portfolio.
To date, we have provided catalytic grants to 10 joint programmes and extended 28 design grants. Each programme provides a solution to a unique development challenge. This is the result of a call for proposal that received 155 submissions from over 100 developing countries, including countries among the poorest and most vulnerable to climate change. After an independent evaluation led by Convergence Blended Finance, with support from the Rockefeller Foundation, Transform Finance, and the Organization for Economic Co-operation and Development (OECD), proposals were shortlisted based on the impact they aimed to achieve, the leverage they sought to obtain, the partners that had already joined their efforts, their innovative potential to reach scale and the operational capacity they showed.
Twenty-eight proposals were awarded preparatory funding of up to US$ 200,000 to develop the initial concepts they submitted. The submitting teams also benefited from coaching from a network of investors and investment advisors from international financial institutions, development banks, philanthropists, and intermediaries. In 2021 the first cohort of 4 investment-ready proposals were approved. An additional 6 proposals were approved in 2022.