Finance tools

Finance 

Finance tools involve UN direct financing, leveraging, and guidance to support a partner’s strategic use of capital, de-risking mechanisms, and innovative financial structures that mobilize private capital to achieve shared development goals

Capitalization and Investment Provides guidance related to identifying the most cost-effective type, mix, and sequencing of financing a partner needs to run its business. Private actors’ decisions that seek to optimize its investments and capitalization are among the most critical decisions in any lifecycle stage. 

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Co-Financing Involves UN financial contributions alongside a partner to partially finance the needs of a single project or transaction. Co-financing signals confidence and attracts additional financing from other sources of capital. They often create incentivizes to move forward with an investment and/or reduce the financial burden, risk, and costs associated with undertaking a project. It is common in large-scale and complex ventures.

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Credit Guarantee Provides debt and risk mitigation in the form of a partial or full credit (debt instrument) guarantee to absorb/share financial risk associated with potential project or investment failure. Guarantees act as insurance policies that help to reduce the perceived risk for commercial lenders and investors, unlocking capital for development-focused projects.

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Crowd-Sourcing / Crowding-in of Other Capital Mobilizes disparate, small public and private financial contributions to match a partner’s financial commitment, most often for a specific project or cause. It uses the UN's involvement as a catalyst to leverage and mobilize a broader pool of capital from third parties than is otherwise possible.

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De-Risking and Blended Strategically uses concessional public and philanthropic funds to mitigate specific risks and improve the financial viability of projects, thereby 'blending' private commercial capital with public funds. It is critical for crowding-in larger volumes of private investment into uncertain markets or high-impact sectors otherwise deemed too risky.

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Debt Swap Involves converting a government's foreign debt into local currency investments in development projects, often partnering with a private partner. It is a mechanism intended improve the government’s balance sheet while redirecting funds for development impact.

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Donations (Cash and In-Kind) Absorbs direct, voluntary financial contribution (cash) or contribution of goods, services, or equipment (in-kind) from a partner to support the UN's general mission or a specific project. This includes but is not limited to employee engagement, gift matching, customer fundraising, and other cause-related marketing and sales. The resources provide flexible funding and essential supplies for UN programs.

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Grants Direct, non-repayable financial support to or on behalf of a partner to fund specific activities, offset start-up costs, or cover a project's non-commercial component. They are typically used to fund untested ideas, finance research, or provide humanitarian support. They help bridge the viability gap for projects with high social impact.

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Lending & Microlending Involves the provision of capital and/or guidance from one party (lender) to others (borrowers) in return for repayment plus interest (or murabaha, ijarah, mudarabah, and musharakah for Islamic lending products). The UN supports loans and microlending as a way for projects, investments, enterprises, and community-level initiatives to receive funding that might otherwise be deemed too risky by private financiers.

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Seed Funding & JVs Supports capital provision for early-stage or small-scale ventures through initial seed funding or establishing joint ventures (JVs) to test innovative models and market offerings. They aim to foster innovation and broad financial inclusion.

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Structuring & Facilitation Offers design and structuring guidance for complex financial transactions, including the creation of new funds or special purpose vehicles, to align private and public sector requirements. The UN’s facilitation role ensures projects are set up with a sustainable and scalable capital structure from the outset.

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