united nations capital development fund

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United NationsCapital Development Fund

Preliminary 2006 Results and Outlook for 2007

Executive Board MeetingJanuary 2007

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Review of UNCDF 2006 Development Results.

2006 Programme Highlights.

Additional UNCDF Activities in 2006.

Organization and Management: 2006 Restructuring Results.

2006 Resource Mobilization Highlights.

2004-2006 Resources Mobilized.

Budget Results 2005-2007: Expenditures.

2006-2010 Growth Summary.

2007 Business Plan: Development Results.

2007 Business Plan: Management Results.

Key Challenges.

Presentation Overview

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Number of LDCs 33

Number of LDCs with investments 23

Estimated number of direct beneficiaries 4.5 Million

Geographic distribution of investments 66% Africa

24% Asia

5% Latin America

5% Arab States

Total UNCDF financing required for Current Investments Approx. $115m*

Indicative key data for 2006• Number of local governments supported• Number of investments made in infrastructure and access to social services• Average amount per investment• Average investment per capita

450

3,008

$3,520

$2.35

UNCDF Activities in Local Development in 2006 (Preliminary)

Review of UNCDF 2006 Development Results

*Includes projected investments from Development Partners through UNCDF.

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Local Development Investments by Sector in 2006 1


…continued

(1) Reflects preliminary results based on 80% of country programmes reporting to date.

33% Education

18% Health

19% Water

13% Roads, Bridges, Culverts

2% Community Facilities

15% Markets & Agriculture

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Number of LDCs 14

Number of LDCs with investments 9

Geographic distribution of investments 89% Africa

11% Arab States

Total UNCDF financing required for Current Investments Approx. $40 million*

Indicative key data for 2006• Number of Inclusive Financial Sector Assessments:• Number of Investment Committees:• New MFI investments in 2006:• Number of Post-Conflict Countries, including Pipeline:

4 countries

5 countries

$2.2 million; 20 MFIs

13 countries

UNCDF Activities in Microfinance in 2006 (Preliminary)


…continued

*Includes projected investments from Development Partners through UNCDF.

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Bangladesh

Government of Bangladesh approved $200 million+ “Local Government Support Programme (LGSP)” scaling up and replicating UNCDF/UNDP pilot to 4,500 Union Parishads.

World Bank, EU, DANIDA, SDC join LGSP.

UNCDF retains Technical Support Role, continues learning and innovation in 6 Union Parishads and begins technical management of Social Protection pilot.

Yemen

National Decentralization for Local Development Strategy elaborated and adopted by the Local Authorities National Conference.

Strategy scheduled for approval by Parliament in February 2007.

“Decentralization and Local Development Support Program” (DLDSP) coverage continued to expand and reached 48 districts (from the original 6 in 2003).

Donor support continued to grow: 9 donors have harmonized approach and total budget now exceeds $12 million.

2006 Programme Highlights

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Nicaragua

Nicaraguan Government adopted “National Strategy for Decentralization and Local Development” based on UNCDF Local Development model and technical support.

UN Resident Coordinator seeking technical assistance to align and harmonize UN and development partner support for decentralization reform that will use local authorities for cross-sectoral service delivery to reduce poverty and achieve the MDGs.

Senegal

UNDP, UNCDF and CIDA approved $ 9 million to support national strategy for building inclusive financial sectors with focus on rural areas.

IFAD, KfW, AFD and EU approved specific funding to support national strategy.

Donor funding reached 95% of Action Plan ($40 million) for implementation of national strategy.


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Mozambique

• Government of Mozambique replicating UNCDF pilot and Local Development methodology with support of World Bank, DCI and GTZ.

• UNCDF, UNDP, World Bank and GTZ jointly evaluated prior Local Development collaboration and used results to jointly advise Government of new National Decentralized Planning and Finance Programme (NDPFP).

• Government decided “in principle” to establish NDPFP and resource-pooling or common-funding arrangement.

UNCDF working with other Development Partners and Government to develop appropriate programming and financial arrangements.

Benin

UNCDF pilot (begun in 2003) for Decentralization and Local Development pioneers Public Expenditure Management process using National Treasury for investment funding.

Government and Development Partners (EU and Belgium) agree to replicate and scale up UNCDF model to additional provinces.


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UN Conference on Inclusive Financial Sectors in Africa

A forum for multiple stakeholders to discuss the challenges, constraints, and opportunities for building inclusive financial sectors in Africa.

More than 300 participants from Governments, Central Banks, Development Agencies, Microfinance Institutions (MFIs) and Financial Service Providers (FSPs), private sector financial institutions, academia, civil society, donors and investors, UN Agencies and Bretton Woods Institutions.

About 80% of participants from Africa.

The Dakar Declaration on Building Inclusive Financial Sectors in Africa issued and Steering Committee formed to ensure follow-up.

First Steering Committee meeting to be held in Madagascar in February 2007.

Steering Committee members include representatives from Governments, Central Banks, IFIs, MFIs, FSPs and Development Partners.

UNCDF hosting Steering Committee.

Additional UNCDF Activities 2006

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Additional UNCDF Activities 2006

UN Advisors Group on Inclusive Financial Sectors

Established in June 2006 for a term of 2 years:

To increase global access of poor and low income households and micro and small enterprises to a broad range of financial products and services on a sustainable basis.

To raise global public awareness regarding financial inclusion and to place inclusive finance on the global development agenda.

Consists of 25 individuals representing the UN, Governments, IFIs, Central Banks, MFIs, FSPs, private sector financial institutions and academia.

Four Working Groups: Regulation and Supervision, Engaging the Private Sector, Research and Public Policy, and Advocacy.

Two meetings in 2006: June and November.

Secretariat formed at UNCDF consisting of Senior Policy Advisor, Programme Manager, and Programme Associate.

Key Events in 2007: Global Conference on Regulation & Supervision; Conference for Institutional Investors sponsored by Goldman Sachs; Regional Meetings in Asia, Latin America and Eastern Europe; Advisors Group meetings in Amsterdam, Nairobi, and Asia-Pacific region.

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Streamlined HQ to focus exclusively on strategic functions and management: 41% reduction in HQ posts. Addition of Business Development and Operations Advisors in 2006.

Expansion of presence at Regional and Country levels.

Organization and Management: 2006 Restructuring Results

Consistent with UN Reform initiatives, UNCDF has restructured to achieve greater decentralization and improved operating efficiency and effectiveness:

HQ Regional Country Offices JPOs

2005

2006

2007(P)

37

24

24

9

5

10

42

53

5419

16

5

Totals

93

98

107

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Principal benefits of restructuring:

More field presence closer to LDCs and supported by programme funds.

Closer alignment with UNDP resulting in more cost-effective structure for

delivering services.

Reduced HQ overhead costs.

Enhanced capability to mobilize resources and manage operations

efficiently.

HQ and Regional restructuring completed in 2006.

2007 restructuring activities:

Revise roles and responsibilities in Country Offices to strengthen project

management and collaboration with UNDP.

Review Change Management process to identify lessons learned and

assess need for adjustments.

…continued

Organization and Management: 2006 Restructuring Results

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18% increase in Core Contributions from $10.7 million in 2005 to $12.7 million

in 2006.

22% increase in Non-Core Contributions from $10.8 million in 2005 to $13.1

million in 2006.

20% increase in Total Contributions from $21.5 million in 2005 to $25.8 million

in 2006.

Total Contributions in 2006 exceeded 2004 Contributions by $2 million.

45% increase in number of Donor Countries from 11 in 2005 to 16 in 2006.

New Core Donors include Andorra, Ireland, Liechtenstein and USA.

Approximately $2 million mobilized for UN Advisors Group over two years.

It is not expected that UNCDF will draw upon its reserves in a significant way

in 2006.

2006 Resource Mobilization Highlights

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2004-2006 Resources Mobilized

Number of Contributing Member States1 UNCDF Contributions: 2004-2006

2004 2005 2006

$23.8

$21.5

$25.82

2004 2005 2006

13

11

16

Core

(1) Includes OECD/DAC countries only.

-15% +45% -10% +20%

(2) Includes (i) certain pledges for 2006 not received as of 31/12/2006 but expected in early 2007 and (ii) an amount for support of certain UNCDF activities held in a Trust Fund in BDP.

Non-Core

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Budget Results 2005-2007: Expenditures

05

101520253035404550

2005 2006 2007

Investments

Country Investment Support

Admin (UNDP since 2006)

Regional Investment Support

Actual Preliminary Projected

$38million

$23million$19.5

million

$2

6 m

illi

on

$31m

$47m

$27.8m

$4

1 m

illi

on

$2

1.1

mil

lio

n

$5million

$5million

$6.7million

+ 23 %

- 25 %

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2006-2010 Growth Summary

2006(preliminary)

2007(projected)

2010(projected)

Total annual programme expenditures1

$26m $41m $60m

Local Development $22m $32m $40m

Microfinance $4m $9m $20m

Total number of LDCs 28 37 45

Local Development 23 33 42

Microfinance 9 16 25

UNCDF Personnel 98 107 112

(1) Includes projected investments from Development Partners through UNCDF.

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2007 Business Plan: Development Results

Decentralization and Local Development

Complete next stage of scale-up and replication: Bangladesh, Nepal, Mozambique,

Timor Leste, Yemen, Ethiopia, Benin and Senegal.

Initiate Local Economic Development programmes: Benin, Senegal, Tanzania,

Uganda and Malawi.

Establish methodology and documentation with UNDP and Development Partners

for Decentralization and Local Development Sector-wide Approach (SWAP).

Work closely with UN colleagues to establish UN approach to Local Development

through Local Authorities and localizing the MDGs.

Complete Joint Programme with UNIFEM on Gender-Sensitive Budgeting at Local

Level.

Number of Programme Countries:

Local Governments Supported:

New Programme Countries:

Total Programme Investments:

33

600

10

$32 million

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2007 Business Plan: Development Results

Inclusive Financial Sectors and Microfinance

Investment Committees operational in 12 Countries. Total investments in MFIs and FSPs: 44 investments amounting to $7.5 million. Increase in clients obtaining loans: 670,000, including at least 50% women. Establish methodology and documentation with UNDP and donors for Inclusive

Financial Sector SWAP. Organize and manage Steering Committee for follow-up to Dakar Conference on

Building Inclusive Financial Sectors in Africa. Support operations of the Secretariat of UN Advisors Group on Inclusive Financial

Sectors. New Microfinance Director assumes leadership and management role.

Number of Programme Countries:

New Programme Countries:

Total Programme Investments:

16

7

$9 million

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2007 Business Plan: Management Results

Cooperation Framework with UNDP

Conclude Cooperation Framework with UNDP and establish UNCDF participation in

UNDP Strategic Plan 2008-2011.

Participate actively in development of “One UN” at Country Level.

Develop Joint Programme methodology, documentation, and management

processes for working with UNDP and Development Partners at Country Level.

Develop Joint Resource Mobilization Strategy with UNDP.

Conclude funding arrangements with UNDP for period of Strategic Plan.

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Human Resources

• Complete and implement revised roles and responsibilities for Progamme Officers and Programme Assistants in Country Offices.

• Fill remaining vacant posts.

• Complete and implement Talent Management Plan for retiring UNCDF Staff.

• Develop and implement Learning and Career Development Programme for all Staff.

Management Systems

• Complete definition and implementation of UNCDF Management Tools: Monthly Management Dashboard, Quarterly Project Management and Financial Reports.

• Complete Management Information System and integration of programme and financial information into ATLAS.

• Assure availability, comparability and high quality of project data for measuring Development Results and implement Results Based Management system.

• Complete upgrade of ATLAS and prepare for 2008 implementation of International Public Sector Accounting Standards (IPSAS).

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Knowledge Sharing and Knowledge Management

• Collect, publish and disseminate Best Practices and Case Studies from UNCDF

Practice Areas.

• Establish broader knowledge-sharing and utilization of UNCDF technical expertise

and experience with UNDP and the UN system.

• Enhance UNCDF Web Site for broader public access and dissemination of

information.

Communications

• Conclude and implement Marketing and Communications Plan to increase awareness of UNCDF activities within UNDP and the UN system.

• Coordinate Marketing and Communications Plan with UNDP and address “branding” issue on all communications material.

• Complete 2006 Annual Report and disseminate broadly to key target audiences.

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Increase Core and Non-Core Resource Mobilization by 40% to $36 million. Increase contributions from Member States who made initial contributions in 2006

and from contributing Member States with increasing ODA allocations. Further diversify donor base of Member States, including Emerging Donor Countries,

based on discussions initiated in 2006. Provide professional Resource Mobilization support to Country and Regional Offices,

focusing on Country-Level Joint Programmes. Pursue Strategic Partnerships with foundations, private sector and multilateral and

bilateral development partners.


Resource Mobilization and Strategic Partnerships

Complete Phase I of mandatory Project Evaluations using outsourcing model. Complete remaining mandatory Project Evaluations. Assure adherence to new UNDP Evaluation Policy. Implement and monitor recommendations of External Evaluations.

Evaluation

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Completing Cooperation Framework with UNDP.

Integrating UNCDF contributions into UNDP Strategic Plan 2008-2011.

Developing funding mechanism for UNCDF within context of UNDP Strategic

Plan.

Mobilizing resources: HQ, Regional and Country Level.

Finalizing revised roles and responsibilities for UNCDF personnel in Country

Offices within the context of “One UN” and UNDP Strategic Plan.

Managing growth and expansion plan.

Key Challenges

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United NationsCapital Development Fund

Investing in the Least Developed Countries

Executive Board MeetingJanuary 2007

united nations capital development fund

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