Over the past few years, the Joint SDG Fund tried something ambitious: use UN funds not as traditional grants, but as strategic investments to unlock much larger pools of private and commercial capital for sustainable development. In partnership with UN entities, we deployed $70 million across nine countries—from North Macedonia to Kenya, Zimbabwe to Indonesia—to test whether smart financial design could bend capital markets toward the SDGs. The results were striking. In Indonesia, the Fund helped structure over $5 billion in sustainable bonds. In North Macedonia, a €23 million green finance facility is now helping Roma families and persons with disabilities access clean energy—groups that banks typically overlook. In Zimbabwe, the Fund is positioning pension funds to invest in renewable energy for the first time.
These programmes also revealed important insights that has been captured in a recent lessons paper about what makes catalytic finance work at scale—and what design features matter most for replication.
The UN's comparative advantage is architectural, not transactional. Our real value wasn't in the size of our investments or completing deals—it was in our ability to bring together players who don't normally collaborate: commercial banks, regulators, government treasuries, and institutional investors. The UN could host the "risky" first-loss capital that made pension funds comfortable investing. It could facilitate policy changes that advance SDG priorities while ensuring they're commercially viable. The UN unlocked billions not just by deploying capital, but by designing structures that solved coordination problems and created space for much larger investments to flow.
Simplicity enables scale. Our most successful programmes could be explained in a simple diagram. Our most sophisticated ones—layered with multiple approval processes and compliance requirements—often struggled to get money out the door. When deals require negotiations among three UN agencies, government bodies, and multiple commercial partners, only massive transactions justify the effort. That systematically excludes the small enterprises and community organizations that actually reach marginalized people.
SDG, gender and equity aren't add-ons to commercial logic—they enhance it. When we designed financing specifically for women-led businesses or historically excluded communities, we didn't just achieve social impact. We found untapped markets with strong repayment rates. Female-headed households in North Macedonia proved to be reliable clients. Women-owned SMEs in Indonesia had better governance than comparable male-owned firms. Equity-centered design works financially.
Technical assistance without capital disappoints; capital without capability-building stalls. Every dollar of financing needs to come with training, regulatory support, and institutional strengthening. But that pairing only works when kept simple. Madagascar launched its facility before enough bankable projects existed. Fiji had to completely rebuild transactions when community governance issues emerged mid-stream. The lesson: capability-building isn't a nice-to-have—it's foundational. But it needs to be practical.
Exit strategies can't be afterthoughts. A recurring pattern emerged: too many programmes had no clear answer to "what happens when UN funding ends?" If interventions are truly catalytic—addressing temporary market failures—they should be deliberately temporary. That means designing exit strategies from day one, not scrambling for sustainability plans at mid-term reviews.
What's next? We're applying these lessons to future programmes and sharing them across the UN system and development finance community. The goal isn't just to prove innovative finance can work for the SDGs—it's to make these approaches simple enough, robust enough, and locally-owned enough that they become standard practice. Catalytic finance should create ecosystems that outlast donor funding, not dependency on it.
Note:
All joint programmes of the Joint SDG Fund are led by UN Resident Coordinators and implemented by the agencies, funds and programmes of the United Nations development system. With sincere appreciation for the contributions from the European Union and Governments of Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, Monaco, The Netherlands, Norway, Poland, Portugal, Republic of Korea, Kingdom of Saudi Arabia, Spain, Sweden, Switzerland for a transformative movement towards achieving the SDGs by 2030.
