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Since 2018, the United Nations Capital Development Fund (UNCDF) and the Organisation for Economic Co-operation and Development (OECD) have collaborated on research and knowledge on blended finance in the least developed countries (LDCs), with the aim to contribute to the policy debate on blended finance by developing empirical evidence and original research on how blended finance can be best used in LDCs to mitigate risk and attract investment for the Sustainable Development Goals (SDGs).
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“Everything we do during and after this crisis must be with a strong focus on building more equal, inclusive and sustainable economies and societies that are more resilient in the face of pandemics, climate change and the many other global challenges we face.” United Nations Secretary-General AntónioGuterres
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This 2020 edition of the UNCDF-OECD Blended Finance in the Least Developed Countries (LDCs) report analyses the state of blended finance in LDCs and its role in recovering and building forward better from the COVID‑19 crisis. The report also provides a range of expert insights on the opportunities, innovations and risks of deploying blended finance in LDCs, and proposes an Action Agenda to chart a new path to further the mobilisation of support and resources for LDCs. Main takeaways include the following.
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This chapter provides an overview of the main findings and recommendations of the report. It first analyses the challenges that least developed countries (LDCs) faced and progress they made prior to the COVID-19 crisis, as well as how this changed in light of the crisis. The chapter then examines opportunities for deploying and scaling up blended finance in LDCs, specifically in response to the COVID-19 crisis. Finally, the chapter outlines an Action Agenda to harness the potential of blended finance for LDCs.
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COVID‑19 is having significant health and socio-economic impacts in least developed countries (LDCs) and is expected to cause major setbacks in these countries’ already limited progress in achieving the Sustainable Development Goals (SDGs). This chapter provides an overview of the key financing challenges faced by LDCs, and outlines the economic and social impacts of and responses to COVID‑19 in LDCs.
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Blended finance approaches could mobilise some of the significant investments needed to build more sustainable, diverse and dynamic economies and societies in least developed countries that can withstand future crises and drive Sustainable Development Goal (SDG) achievement. This chapter explores the different roles blended finance can play in the short- and medium-term responses to COVID‑19, as well as against the key risks associated with least developed countries (LDCs) that are emphasised by the crisis. This chapter also outlines key priority sectors where blended finance could be strategically deployed to catalyse investments that will help to accelerate a resilient COVID‑19 recovery and progress on the SDGs.
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This chapter depicts the latest trends in private finance mobilised by official development finance interventions, and the state of blended finance in least developed countries (LDCs). It identifies the main mobilisers of private finance in LDCs and the top recipient regions, countries and sectors. It also provides an analysis of the leveraging mechanisms used to mobilise private finance in LDCs.
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This chapter presents a curated series of contributions provided by guest authors from a wide range of organisations: least developed country (LDC) partners, donors, multilateral development banks, private asset managers and investors, international organisations, consultancy companies and research centres. They focus on various topics related to blended finance in LDCs, namely country ownership, transparency, additionality and scalability, as well as specific thematic areas, such as digitalisation, urbanisation, local capital market development, “missing middle” challenges and national development banks.
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