UNDP, SDC, KPMG and Social Finance India launch SDG Finance Facility in India
The Sustainable Development Goals Finance Facility has been launched in India by Achim Steiner, UN Under-Secretary General and Administrator of the United Nations Development Programme (UNDP). The SFF is a platform that will incubate innovative financial instruments aligned to the SDGs that will catalyse funding for improved social and developmental outcomes in India.
By 2021 the Facility aims to launch instruments and models that would be able to catalyse over $100 million of incremental private sector capital to address priority social and developmental challenges in line with the Government of India’s development vision.
The Facility is an initiative of UNDP in partnership with the Swiss Agency for Development and Cooperation (SDC), financial services firm KPMG and Social Finance India, a TATA Trusts backed not-for-profit.
“India currently has more than 50 impact investment funds, which means much less bang, or impact, for each investment buck. This fragmented and disconnected approach to SDG finance adds up to a duplication of resources and lack of focus on priority goals — leading to multiple innovative instruments competing for the same pool of capital, higher transaction costs, lower success rates and a focus on splitting the pie rather than enhancing it. By building a multi-stakeholder platform, the SFF aims to encourage major players in the sector to pool resources, capacities and experience, thus aligning their strategic interests,” read a communiqué from the UNDP.
“India is pivotal to our shared ambition to achieve the Sustainable Development Goals. Innovative finance through structures such as guarantees, social insurance, social impact bonds and impact investments, holds the key to unlocking private investment capital for the SDGs, particularly in a middle-income country like India. The SDG Finance Facility leverages a strategic multi-stakeholder partnership with leading institutions in the ecosystem to tap into resources and agility of the private sector to solve some of today’s most pressing challenges,” said Achim Steiner.
Though a great deal of attention is given to instruments raising capital, an often-overlooked area in financing is the journey of ideating, scoping, evaluating and strategizing to create the right set of investible instruments or products. The ability to attract SDG Finance depends to a large extent on how instruments are structured. This is an area that requires multiple stakeholders with complimentary areas of competence.
The Facility will work to mobilise financing for several focus areas, including municipal finance, exploring the use of CSR funds for innovative finance, SDG Electronic Traded Funds and policy work around SDG bonds. The Facility will design instruments that balance the needs of product beneficiaries and funders, develop an effective go-to-market strategy, and build the wider ecosystem. “The SDG Finance Facility builds on the mission and purpose of the global Social Finance network and we hope to leverage our learnings and experiences across markets to bring innovations to India,” said Dr. Rajiv Lall, Chairman, Social Finance India.
“The Swiss Agency for Development Cooperation, as part of its focus on climate resilient cities in India, is keen to support partner city governments to explore innovative financing mechanisms to stimulate their transition towards resilient and sustainable development pathways,” said Tamara Mona, Deputy Head of Mission, Embassy of Switzerland.
“To achieve the SDGs, India will need innovative ways of financing; the SDG Finance Facility is an example. KPMG has a strong focus on the impact investing space and we are proud to be the knowledge partner in this important initiative,” said Arun Kumar, Chairman and CEO KPMG India.
UNDP will chair the steering committee and be responsible for its overall coordination and supervision, as well as provide delivery support. Dr Rajiv Lall, Chairman, Social Finance India will co-chair the initiative and with Social Finance serving as the pillar lead for the work around health impact bonds, leveraging its considerable expertise with innovative financial instruments and pay-for-success mechanisms. KPMG will act as the knowledge partner for the Facility, building on its experience with green finance in India. The Swiss Agency for Development and Cooperation will bring its experience with supporting municipal and climate finance platforms in India and across the region. Government partners on the steering committee include NITI Aayog, the government’s think tank on public policy issues, and the National Institute of Public Finance and Policy.
