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INTEGRATED FINANCING SOLUTIONS How Countries Around the World Are Innovating to finance the Sustainable Development Goals

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INTEGRATED FINANCING SOLUTIONS How Countries Around the World Are Innovating to finance the Sustainable Development Goals INTEGRATED FINANCING SOLUTIONS How countries around the world are innovating to finance the Sustainable Development Goals INTEGRATED FINANCING SOLUTIONS Disclaimer The views presented in this report do not necessarily represent those of the Asian Development Bank or UNDP. Design by Inís Communication – www.iniscommunication.com Contact details This report is designed to be a live document and will be refined and updated periodically to add new case studies and insights into the innovations that countries are developing. Please contact us using the details below if you wish to discuss this further. Thomas Beloe: [email protected] Emily Davis: [email protected] Tim Strawson: [email protected] Developed by UNDP with the generous support of the Asian Development Bank (ADB). Contents Acknowledgements vi Acronyms vii Introduction 1 1 Why an integrated approach to financing the SDGs? 3 2 Integrated planning and financing 6 Establishing holistic public–private financing strategies 7 Aligning the budget with the national plan 10 Aligning wider financing policy to the national plan 13 3 Public–private collaboration 18 Public reforms to mobilize private investment 18 Improving business regulations 18 Offering incentives to promote private sector investment 20 Collaborating with the private sector on strategic projects 24 Promoting social impact investment 29 Promoting better corporate governance 34 Promoting corporate social responsibility 36 Building platforms for public–private dialogue 36 Policy considerations: private sector investment 38 Public policy to leverage greater impact from remittances 39 Leveraging additional development finance resources 40 Enhancing the impact of remittances 46 Reducing the cost of sending remittances 46 4 Monitoring and review 50 Improving private sector reporting 50 5 Transparency and accountability 55 Reporting public spending on cross-cutting priorities 55 Reporting public transactions with private actors 58 Using transparency to support sustainable development progress 60 Conclusion 63 Boxes Box 1. Complementary SDG financing repositories and services 1 Box 2. What is a Development Finance Assessment? 4 Box 3. What are input, output and outcome-based incentives? 23 Box 4. What is social impact investing? 29 Box 5. What are social impact bonds? 33 Box 6. What is impact measurement? 33 Box 7. What are diaspora bonds? 40 Box 8. What is future flow securitization? 43 Box 9. What is sustainability reporting? 52 Case studies Case study 1. Bangladesh: Comprehensive, costed financing strategies 8 Case study 2. The Philippines: Iterative PFM reforms 10 Case study 3. Mozambique: A 15-year vision for public finance 11 Case study 4. Uganda: Aligning annual budgets to the 12 national planning framework Case study 5. Mexico: SDG budgeting 12 Case study 6. Indonesia: Integrated strategy for infrastructure financing 13 Case study 7. Solomon Islands: Community service 14 obligations for state-owned enterprises Case study 8. India: Reforming structures for more holistic planning 15 Case study 9. Bhutan: Policy screening tool 16 Case study 10. Rwanda: Improving business regulations to attract FDI 19 Case study 11. South Africa: Promoting priority industries 22 with financial incentives Case study 12. Viet Nam: Promoting social enterprises 23 Case study 13. Regional cooperation to avoid incentives 24 for a race to the bottom Case study 14. India: Revitalizing its PPP programme 25 Case study 15. Lesotho: A controversial health PPP 26 Case study 16. Peru: Works for taxes 27 Case study 17 The United Kingdom: Early-stage grant financing 31 and supporting financial intermediaries Case study 18. Rajasthan: The Utkrisht impact bond 32 Case study 19. South Africa: Using fiduciary rules to ESG investment 34 Case study 20. Thailand: The corporate governance fund 35 Case study 21. India and Indonesia: Mandatory CSR 36 Case study 22. Chile: Public–private dialogue for clean production 37 Case study 23. Israel: An ongoing programme of diaspora bonds 41 Case study 24. India: Diaspora bonds in times of crisis 42 Case study 25. Nepal: Challenges establishing a 42 diaspora bond programme Case study 26. Brazil: Future flow securitization 44 Case study 27. El Salvador: Future flow securitization 45 Case study 28. Encouraging the development of 46 fintech solutions worldwide Case study 29. Mexico and the United States: a partnership 47 for more effective remittance corridors Case study 30. India: Immediate payment service 47 Case study 31. The Philippines: Remittances for mortgages 49 Case study 32. Thailand: Sustainability reporting 51 Case study 33. Papua New Guinea: The SDGs Dashboard 53 Case study 34. The Philippines: Showcasing transformational business 53 Case study 1. Bangladesh: Comprehensive, costed financing strategies 8 Case study 35. South Korea: Gender budgeting 56 Case study 2. The Philippines: Iterative PFM reforms 10 Case study 36. Pakistan: Climate change tagging 56 Case study 3. Mozambique: A 15-year vision for public finance 11 Case study 37. Nepal: Parliamentary and citizen 57 Case study 4. Uganda: Aligning annual budgets to the 12 scrutiny of climate spending national planning framework Case study 38. Thailand: Transparency and accountability 58 Case study 5. Mexico: SDG budgeting 12 in public procurement Case study 6. Indonesia: Integrated strategy for infrastructure financing 13 Case study 39. Dominican Republic: Tax expenditure reporting 59 Case study 7. Solomon Islands: Community service 14 Case study 40. United Kingdom: Gender pay gap reporting 60 obligations for state-owned enterprises Case study 41. Ethiopia: Spreading agriculture market information 61 Case study 8. India: Reforming structures for more holistic planning 15 Case study 9. Bhutan: Policy screening tool 16 Case study 10. Rwanda: Improving business regulations to attract FDI 19 Case study 11. South Africa: Promoting priority industries 22 with financial incentives Case study 12. Viet Nam: Promoting social enterprises 23 Case study 13. Regional cooperation to avoid incentives 24 for a race to the bottom Case study 14. India: Revitalizing its PPP programme 25 Case study 15. Lesotho: A controversial health PPP 26 Case study 16. Peru: Works for taxes 27 Case study 17 The United Kingdom: Early-stage grant financing 31 and supporting financial intermediaries Case study 18. Rajasthan: The Utkrisht impact bond 32 Case study 19. South Africa: Using fiduciary rules to ESG investment 34 Case study 20. Thailand: The corporate governance fund 35 Case study 21. India and Indonesia: Mandatory CSR 36 INTEGRATED FINANCING SOLUTIONS Acknowledgements This report was commissioned by UNDP’s Regional Bureau for Asia and the Pacific in partnership with the Asian Development Bank who provided generous financial support. The report was written by Tim Strawson (Development Finance Specialist) under the guidance of Tom Beloe (Governance, Climate Change Finance and Development Effectiveness Advisor) and Emily Davis (Policy Specialist, Development Finance and Effectiveness) from the UNDP Bangkok Regional Hub. The report benefited from valuable input and comments from colleagues including: Bernard Woods and Smita Nakhooda (Asian Development Bank); Oliver Schwank (UN DESA); Jens Claussen (independent consultant); Artak Melkonyan, Darko Pavlovic, Elodie Beth, Kamolwan Panyasevanamit and Suren Poghosyan (UNDP Bangkok Regional Hub); Ashley Palmer (UNDP Nepal); Fakrul Ahsan (UNDP Bangladesh); Gail Hurley and Massimiliano Riva (UNDP HQ); Karanraj Chaudri (UNDP India); Kirthisri Rajatha Wijeweera (UNDP Sri Lanka); and Martin Hart-Hansen (UNDP Thailand). The report also drew on a number of case studies from an earlier background paper written by Nelson Stratta (independent consultant). The analysis also draws from the experience of the Development Finance Assessment methodology (UNDP, March 2019) developed by the Asia-Pacific Development Effectiveness Facility (AP-DEF) managed by UNDP with generous support from the Australian Department of Foreign Affairs and Trade. vi Version 1.0 Acronyms AAAA Addis Ababa Action Agenda ADB Asian Development Bank ASEAN Association of Southeast Asian Nations BdB Banco do Brasil CAP Consolidated Action Plans (Cambodia) CCP Council for Clean Production (Chile) CPA Clean Production Agreement (Chile) CRISA Code for Responsible Investing in South Africa CSMI Cottage, Small and Medium Industry (Bhutan) CSR Corporate Social Responsibility DFA Development Finance Assessment ECX Ethiopian Commodity Exchange ESG Environmental, Social and Governance FDI Foreign Direct Investment GRI Global Reporting Initiative IFC International Finance Corporation IMF International Monetary Fund MTEF Medium-Term Expenditure Framework NAMA Nationally Appropriate Mitigation Action NGO Non-Governmental Organization OECD Organisation For Economic Co-operation and Development PDP Philippine Development Plan PFM Public Finance Management PPP Public–Private Partnership PREXC Programme Expenditure Classification tool (Philippines) SDG Sustainable Development Goals SET Stock Exchange Of Thailand SME Small and Medium Enterprises SOE State-Owned Enterprise UNDP United Nations Development Programme vii Introduction Countries around the world are looking for ways to mobilize public and private investments in the 2030 Agenda for Sustainable Development (2030 Agenda). Box 1. Complementary SDG financing repositories and services The Sustainable Development Goals (SDGs) present an ambitious vision for global and country-level progress The case studies and policy innovations discussed
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