Bratislava, May 28-29, 2018 – UNDP and the Ministry of Finance of the Slovak Republic (MF SR) hosted international workshop on innovative financial instruments for development. The event was attended by development experts from 11 countries, mainly from Ministries of Foreign Affairs, Ministries of Finance and/or national development agencies.
“We are convinced that connecting public and private sector is the future of development cooperation. It might take some time progressing in small steps and with experimenting, nonetheless, first examples of innovative mechanisms already exist. We are proud to have been cooperating with the UNDP on this topic in the Western Balkan and Central Asia since 2015. The synergy of public and private sector using innovation is becoming more visible. The aim of this workshop was to study in more detail financial instruments which can be used in our region so that the public and private sector can join efforts and achieve higher effectiveness and measurable results in development,” said Martina Kobilicova, Director General of International Relations at the MF SR.
The workshop provided a space for discussion and introduction of a number of innovative initiatives with special emphasis on finance. Workshop was facilitated by Tej Dhami, managing director of the Numbers for Good, a research company exploring innovative financing for humanitarian crises. Among the speakers one could find UNDP experts but also representatives of renowned development actors such as Strat!Gos, AidTech or Swiss Agency for Development and Cooperation. Presented case studies of the applied innovative financial instruments, such as blended finance, impact investment (social-impact bonds), crowdfunding or preventive financing showed remarkable results. These modern financial instruments enable to blend official development assistance funds with private and other resources. In this way, recipients of the international assistance, can profit from these combined resources and use these resources more effectively.
Why UNDP and why Slovakia?
Since 2000 UNDP, through its Istanbul Regional Hub (before Bratislava Regional Centre) has been working with the new EU member states as emerging donors, providing them with development knowledge, operational mechanisms and procedures, offering extensive network of country offices, and serving as reliable partner in building development partnerships and capacities. Workshop was a part of broader initiative, Capacity Building Series, aimed to support emerging donors, or those countries that are close to upgrade from recipients to donors.
UNDP partnership with Slovakia, Ministry of Foreign Affairs as well as Ministry of Finance, has been one of the largest and longest initiatives in the region. Within the last 4 years, innovative finance and its use in development became one of the crucial topic of the partners´ cooperation. Based on seed funding of MF SR, UNDP was able to establish Alternative Finance Lab (AltFinLab), an internal startup of the UNDP Istanbul Regional Hub. The Hub has been piloting a number of initiatives, experimenting with the use of alternative finance mechanism like social impact bond, blockchains, crowdfunding for development, etc. Number of experiments already showed as successful, e.g. introduction the first social-impact bond in Serbia on municipal level to tackle youth unemployment.
“I was working in the Istanbul Hub as a Team Leader when the idea, of setting up AltFin Lab emerged in 2015. Its ambition was to use innovation to leverage the limited available grant funding to attract much more robust resources for development. Now, being in the Country Office in Armenia, we are successfully piloting some of these innovative tools, developed by AltFin Lab with support of the MF SR”, said Dimitri Mariassin, Deputy Resident Representative UNDP Armenia.
Currently, the UNDP´s AltFin Lab is assisting worldwide to around 40 countries in application of various forms of innovative financing. Through these activities, the Lab was able to leverage funds invested by the Slovak Ministry of Finance fivefold.