Financing for Sustainable Development

Financing for Sustainable Development

By 2015 the international community will agree on a new set of development goals. In parallel to the substantive process, discussions with regard to financing such goals are taking place. However, it is not yet apparent how the “goal setting process” will come together with the various “financing for (sustainable) development processes”.

The global development finance landscape is changing. External resources for development used to come largely as aid from governments. Now most developing countries have access to a much wider range of flows and providers. Private flows in particular foreign direct investment are increasing, and so are personal remittances. Many developing countries are issuing bonds, and numerous innovative financing mechanisms are operational or under consideration.

In June 2013, SDC and SECO-WE have established a joint working group on development finance to ensure a “whole of development approach” towards financing for sustainable development post-2015.

Against this background it is timely that SDC clarifies a) how it intends to engage in the international debate on financing for sustainable development b) what its priorities are and based on this c) to clarify the next steps to be taken.

A&P has the lead in facilitating the intergovernmental consensus process to arrive at a Swiss position. Please leave a comment here if you wish to express your opinion on the current working paper, that is approved by the interdepartemental task force post-2015.  Furthermore, A&P substantively explores the changes in the development finance landscape and their impact on the future of Swiss sustainable development finance.

Contact person: Riccarda Caprez CAPRI (riccarda.caprez@eda.admin.ch)

 

Documents:

​​Financing for Sustainable Development - What options for the international community and SDC?

DP Brief November 2014 - This publication exists in English, French and German
DEZA, A&P

Author: A&P

 
An ambitious post-2015 agenda with sustainable development and poverty eradication at its core will require an equally ambitious and comprehensive financing strategy. This DP brief assesses some debated components of the current OECD-DAC measurement of ODA and possible implications for Switzerland. Furthermore, it examines opportunities for Switzerland and the SDC to scale up sustainable development finance in light of the new Federal Council Dispatch1 on Switzerland’s international cooperation 2017-2020 (dispatch on cooperation), the forthcoming post-2015 agenda and the UN Financing for Development Conference.
[en] [fr] [de]

Financing for Sustainable Development - What options for the international community and SDC?

The official SDC homepage also informs about this Development Policy (DP) Brief.

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​​Report of the Intergovernmental Committee of Experts on Sustainable Development Finance

August 2014
ICESDF 

 

Report of the Intergovernmental Committee of Experts on Sustainable Development Financing
At the United Nations Conference on Sustainable Development (Rio+20), the international community agreed to undertake a major effort to promote sustainable development globally and in every nation and free humanity from poverty and hunger.2 Member States also agreed to establish the Intergovernmental Committee of Experts on Sustainable Development Financing (the Committee)3and tasked us with developing options for a sustainable development financing strategy to facilitate the mobilization of resources and their effective use in achieving sustainable development objectives.

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​​Working Paper on Sustainable Development Finance post-2015

May 2014
Author: Facilitated by A&P / SECO-WE

 

Working Paper on Sustainable Development Finance post-2015
As the global community works towards establishing a new set of sustainable development goals for the post-2015 era, it will be important to deliver a strategy on how they will be financed. This paper aims at giving a brief overview of the financing needs identified so far, as well as the financial resources available. In the last section, a preliminary Swiss position on "financing post-2015" is outlined, which will have to be revised in light of the international discussions and proposals that will be elaborated in the coming months. The working paper has been approved by the interdepartemental task force post-2015.

The results of the various other working groups are presented here.

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​​Briefing document on Innovative Financing Mechanisms - Traverse Discussion

Briefing Document Innovative Financing Mechanisms
May 2014

Author: A&P

 

Briefing Document Innovative Financing Mechanisms
From eradicating poverty to sustainable development: the provision of a coherent overall financing framework integrating all three dimensions of sustainable development – social, economic and environmental – has emerged as a central issue in the post-2015 discussion. In this context, there is growing consensus on the need to mobilise financing for sustainable development from public and private, domestic and international sources. The argument that public resources should be increasingly used to leverage private finance has been prominently brought forward. This briefing document elaborates on terminology, different instruments, donor approaches and partner country perspectives.

This briefing document was written in light of the Traverse discussion on innovative financing mechanisms for sustaianble development. For further details please click here.

 

​​Key Messages on Innovative Financing Mechanisms - Traverse discussion

April 2014
Summary prepared for Traverse by SDC, A&P

 

Key messages on Innovative Financing Mechanisms - Traverse discussion
The panel of experts addressed opportunities and risks related to innovative financing mechanisms (IFM), output and outcomes of private finance leverage and necessary framework conditions

From eradicating poverty to sustainable development: the provision of a coherent overall financing framework integrating all three dimensions of sustainable development – social, economic and environmental – has emerged as a central issue in the post-2015 discussion. In this context, there is growing consensus on the need to mobilise financing for sustainable development from public and private, domestic and international sources. The argument that public resources should increasingly be used to leverage private finance has been prominently brought forward in this context.  

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​​Donor strategies and instruments to leverage private sector investment using ODA

February 2013
ECDPM Study commissioned by SDC 

 

Donor strategies and instruments to leverage private sector investment using ODA
The European Centre for Development Policy Management (ECDPM) undertook on behalf of the Swiss Agency for Development and Cooperation (SDC) a quick survey of the strategies and instruments used by the EU, Germany, Sweden and the UK to utilise Official Development Assistance in order to leverage additional private sector funding or investment. The broad conclusion drawn from this analysis is that, while these donors appear to agree on the objective of using ODA to catalyse private sector finance (i.e. recognise the potential additionality of private investment leveraged through ODA), use standardised frameworks to assess and evaluate investment projects and can furthermore demonstrate some measure of leverage, they do not (yet) have common or clear strategies for this type of ODA spending, nor developed systems to measures amounts invested or, crucially, assess the results and impact of these projects. Whereas these donors do succeed in attracting more private investment, until they can demonstrate clear impact on poverty this usage of ODA will remain open to scepticism and criticism. The current context of discussion on the ODA definition as well as on financing the post-2015 framework for global development underlines the urgency of addressing this issue.

Key Messages
1) Donors have similar strategies and interests for using ODA to catalyse private investment, but have no specific policy framework for this
2) Donors use a variety of instruments to target (parts of) the private sector
3) Donors make use of explicit, standardised investment principles to select and evaluate projects
4) Both opportunities and risks for investment are noted, and a key concern remains the ‘additionality’ of the ODA provided
5) There is no common method for quantifying ODA investments in private sector development
6) Donors are successful at achieving leverage, but do not go in-depth to measure development impact 
 

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Links:

UN-led Initiatives:
a) SDG/Rio+20:

· Addis Ababa Action Agenda 2015
· Intergovernmental Committee of Experts on Sustainable Development Financing
· Open Working Group on Means of Implementation

b) MDG/Monterrey and follow-up (second committee UNGA and ECOSOC):
· Financing for Development

OECD:
· OECD Development Cooperation Directorate, External Financing for Development

Think tanks and NGOs on the subject:
· Center for Global Development, Brookings, Overseas Development Institute, Development Initiatives, Bill & Melinda Gates Foundation (etc)​