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UN Capital Development Fund touted as tool to "derisk" investment for Malawi and Sierra Leone
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Summary
At a UN General Assembly side event, UNCDFexecutive secretary Pradeep Kurukula Suriya described the Fundas a vehicle to absorb investment risk and recirculate scarce aid; ministers from Sierra Leone and Malawi outlined partnerships on financial inclusion, index insurance for farmers and a domestic mineral fund.
Pradeep Kurukula Suriya, executive secretary of the UN Capital Development Fund, said the agencyexists to "derisk" investment and attract private capital to least developed countries. "The UN Capital Development Fund is the best kept secret in the UN system," Pradeep told a panel at a side event hosted at the SDV SDG Museum during the United Nations General Assembly.
Pradeep said only a small fraction of global financing reaches the least developed countries and argued that private investment is needed to close the gap. He described UNCDFas able to absorb higher losses in high-risk environments, saying its portfolio can tolerate about a 20% default rate and that roughly 80% of every dollar invested is recovered and reinvested, which helps create a de-risked environment for larger lenders.
"You have to start by moving the millions," Pradeep said, adding that building local-currency domestic financial markets and deepening local liquidity are critical steps so multilateral development banks and development finance institutions can follow.
Kenya Barley, Sierra LeoneMinister of Planning and Economic Development, said access to finance remains the core barrier in her country and described several ongoing UNCDF partnerships. "CDF can help us to fund systems," Barley said, pointing to projects that supported farmers and, she noted, even motorbike riders through an EU-funded initiative. Barley said Sierra Leone is emphasizing decentralized, digital financial agents, financial literacy and products adaptable to community needs.
Barley also described a pilot index insurance effort that covered about 1,000 farmers this planting season, intended to ensure compensation if drought or floods hurt yields and to build resilience in a sector that employs a large share of the population.
Agnes Mary Chimbiri Melande, Permanent Representative of Malawi to the United Nations, said perception of risk discourages both international and domestic investors and highlighted the need to reach rural "last mile" communities. "We need UNCDF to help us reach out to the last mile where we have the largest population," Melande said, urging scaling of digital payments and concessional financing instruments that can be tailored for small and medium enterprises.
Both ministers and the UNCDF official discussed shifting from a traditional aid model toward blended and private financing, SouthSouth cooperation and domestic resource mobilization. Barley said Sierra Leone has presented a domestic resource mobilization strategy and a proposal for a mineral wealth fund to raise and allocate mineral revenues for investment and social sectors.
The panel closed with Pradeep characterizing the moment as an opportunity to make scarce official development assistance go further by using it to attract multiple dollars of local investment and noting UNCDFis preparing to operate in a range of contexts where financing needs exceed traditional aid flows.
The session ended after a short question period and closing remarks from the moderator.
