Mobilizing Capital for Local Development Funds

A Longitudinal Case Study in Leveraging Millions to Billions

The UN Capital Development Fund (UNCDF) has been at the forefront of developing and piloting innovative approaches to financing local service delivery over the past decades.

Mobilizing capital for local development funds: A longitudinal case study in leveraging millions to billions tells the story of how UNCDF’s signature product – the local development fund (LDF) – was able to generate billions of dollars for local social and economic development in the world’s underserved and underinvested regions. The publication consists of a synthesis overview and 10 country cases (Bangladesh, Benin, Bhutan, Guinea, Lesotho, Mali, Nepal, Solomon Islands, Tanzania and Uganda).

In many least developed countries (LDCs), UNCDF has continued to develop new approaches to local government finance, for example, in the areas of climate adaptation, local economic development and municipal finance. The signature product designed by UNCDF since the 1990s – the Local Development Fund (LDF) – was able to generate billions of dollars for local social and economic development in the LDCs through piloting and national scale-up. The LDFs leveraged UNCDF’s initial investment of millions to generate billions in sustainable and institutionalized flows of funds to the local level through national fiscal transfer systems and follow-on financing from the World Bank and others. These Funds significantly contributed to fiscal decentralization and the expansion of local fiscal space and local fixed capital formation – two prerequisites for economic transformation.

In response to the need for credible longitudinal studies that account for the sustainable leverage and impact of development finance, UNCDF in partnership with Dege Consult ApS conducted a study as a first attempt to provide a comprehensive analysis and better understanding of the leverage of UNCDF-supported LDFs on the intergovernmental fiscal transfer systems and related reforms following the initial pilots in a range of countries. The findings are consolidated in the publication named “Mobilizing capital for local development funds: a longitudinal case study in leveraging millions to billions”. It documents the leverage of UNCDF initiatives on the total size of and modalities for intergovernmental fiscal transfers to local governments and analyses the contributing factors in the model’s success.

In this context, UNCDF organized an event for the official launch of the publication and to showcase the leverage and impact of the UNCDF-supported LDFs with concrete country examples. This event took place on September 15th 2021, please find the video and the program below.

9.00-9.10amWelcome and Opening Remarks Ms. Preeti Sinha, Executive Secretary, UNCDF Mr. David Jackson, Director of Local Development Finance, UNCDF
9.10-9.25amPresentation of the Study Mr. Jesper Steffensen, Senior Partner and Board Member, Dege Consult ApS
9.25-9.55amPanel Discussion and Country Experience on Local Development Funds Mr. Ganga Datta Awasthi, Former Secretary, Ministry of Local Development, Nepal Eng. Paul Kasule-Mukasa, Senior Specialist, Ministry of Local Government, Uganda Mr. Roland White, Global Lead for City Management, Finance and Governance, World Bank Mr. Leonardo Romeo, NYU Adjunct Professor of International Development Planning, President of Local Development International (LDI) Moderator: Ms. Christel Alvergne, Africa Team Lead, UNCDF
9.55-10.00amClosing Remarks Mr. David Jackson, Director of Local Development Finance, UNCDF

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