UNOPS

Private Sector Support for Achieving the SDGs

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GRETE FAREMO, Under-Secretary-General and Executive Director of the UN Office for Project Services (UNOPS)
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At the Int​ernational Conference on Sustainable Development​, 21 September 2016​

Download this speech (PDF)​

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​​The present world population of seven and a half billion people will grow to pass ten billion people sometime during the middle of the Century. These ten billion people will have many of the same hopes and aspiration for their lives as you and me.

Now, in 2016, billions of people lack the basic amenities that you and I take more or less for granted.

  • ​​We need safe water every day, and the taps, pipes and sinks must be in place.

  • We need electricity, and not only the small quantities that charge our cell-phones. No, we need large quantities of electricity since people and families rightly aspire to having washing machines

  • We need water and electricity to run hospitals and health centers 24/7.

The future will be urban. Hundreds of millions are marching on the cities. Take alone the refugees and internally displaced. If these people were a country, they would be the 21st most populous country in the world, and growing by 38,000 each day.

And they are not predominantly in camps. They are in our cities, - in the suburbs and shanty-towns, with all their human needs. They create demands, yes, but they also create markets, for services and infrastructure.

We all need schools, - safe, well run schools. We all want to be able to move safely, at night as well as during day-time. And we all need employment and economic opportunity.

We need to invest in our common future. We need global investment of a scope and scale hitherto unseen.

Historically we have considered helping the poorest people and countries as charity, as something we could accomplish by rich countries, relatively speaking, making grants and donations to poor countries. And so, some decades ago, we introduced development assistance, also called official development assistance.

Last year, total global international development assistance amounted to about 150 billion US dollars. Around 15 percent of this was channeled through the United Nations system. And many donor countries are truly taking on their fair share of this international burden-sharing.

Today, however, the need for investments to fulfill our common global ambitions, as articulated in the sustainable development goals, is measured in the trillions of dollars every year. It is quite clear that this will not be mustered in the forms of grants from country to country.

Investments on this scale will only come about when governments, the private sector and international organizations work together. The role of grants is gradually being reduced. If we are to create the investments needed on a global scale, we must also unleash private sector investment of a new magnitude. Mother Earth will also require that we do it in a financially, environmentally and socially viable manner!

Now, the fact is that many finance institutions and companies are reluctant to invest in a number of countries. There can be political reasons for this. The private sector finds the country physically unsafe. Or, they distrust the quality of the rule of law, or the banking system in place there. Or they believe that the local government will move the goal-posts and prevent private foreign investors from receiving a reasonable return on their investments.

I am the head of UNOPS. We are the operational arm of the United Nations. And we are poised to be part of this common future. We are eager to use our competence and capacity to truly help unleash new flows of foreign investment in low- and middle income countries where they are needed the most.

We can act catalytically and work with financial institutions. We can simply partner up with private investors, and financial institutions, and take some of the risk on our UN shoulders which otherwise would have been the sole responsibility of the private sector investor.  This is called de-risking.

It means using donor funds in a combination with private capital, and thereby spreading the risk among several players.

This is also called making projects bankable. This again, means that the risk involved will be reduced enough to make a private sector, corporate decision to invest, a sound one. It is a decision that banks, even your bank, will accept to take.

My organization is not financed from grant contribution. We are paid for what we do. We charge a small percentage of projects that we implement for others. And recently, we have established a Seed Capital Facility to explore new opportunities with private sector in the way I have described using our own reserves.

UNOPS recently welcomed the first contributor to this seed capital facility.  We signed last week.  The Chinese Investment Management Authority donates $3 million to these UNOPS endeavors.

We will encourage private investment in sustainable development projects around the world.

We are currently seeking contributions from like-minded investment partners.

We aim to channel private capital into projects that create jobs, provide energy, build hope for future generations.

It's vital to the implementation of the Sustainable Development Goals.

We call this our social impact investment initiative.  It is about projects that combine sustainability and return, and where we work together with investors sharing the risk.

And the idea is to catapult us forward toward the future that we dream about:

  • ​To accelerate much needed investment.

  • To meet, ultimately, the needs of billions of people around the world.

Last Thursday UNOPS also signed a partnership agreement with the Massachusetts Institute of Technology aiming to collaborate on e-learning and innovation in education.

We want to join forces bringing MIT's courses and knowledge to audiences in developing countries, including knowledge for start-ups and entrepreneurs.

Yet, if we want a cleaner and more just world for future generations, private investment in development operations – paired with public funds and strong public planning – is the only way to get there.

UNOPS will help lead the way.​

Thank you.

 

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