Innovative financing for development

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The Leading Group on Innovative Financing for Development

A laboratory providing expertise and a diplomatic instrument supporting innovative financing for sustainable development

Created in 2006 at the initiative of Brazil, Chile, France and Spain, the Leading Group is an informal network of proactive actors that currently includes 66 States and numerous international organizations, non-governmental organizations, private foundations and local entities, dedicated to poverty eradication and the preservation of global public goods including health, education, food security, the climate and biodiversity.

The Leading Group is in line with the idea of the “global partnership” for development (SDG 17). Its aim is to offer a key forum for dialogue and exchanging best practices on the various innovative solutions for financing sustainable development.

Drawing on its members’ expertise and regular surveying of the most promising initiatives, it seeks to foster growing political commitment to instruments that have proved their feasibility and effectiveness in several pilot countries.

Participating countries (members and observers)

  • Africa: Benin, Burundi, Burkina Faso, Cabo Verde, Cameroon, Central African Republic, Côte d’Ivoire, Djibouti, Ethiopia, Gabon, Guinea, Guinea-Bissau, Liberia, Madagascar, Mali, Mauritius, Mozambique, Namibia, Niger, Nigeria, Republic of the Congo, Sao Tome and Principe, Senegal, Sierra Leone, South Africa and Togo.
  • Middle East and North Africa: Algeria, Egypt, Morocco, Jordan, Lebanon and Saudi Arabia.
  • Latin America: Brazil, Chile, Ecuador, Guatemala, Haiti, Mexico, Nicaragua and Uruguay.
  • Asia: Bangladesh, Bhutan, Cambodia, China, India, Japan, South Korea and Sri Lanka.
  • Europe: Austria, Belgium, Cyprus, Finland, France, Georgia, Germany, Italy, Luxembourg, Netherlands, Norway, Poland, Romania, Russia, Spain and the United Kingdom, as well as the European Commission

A rotating presidency and a permanent secretariat

The Pilot Group’s presidency is held on an annual, voluntary basis by a member country, in accordance with a principle of geographical rotation. The Leading Group’s presidency spearheads the promotion of innovative financing for development, particularly within the UN forum (including the General Assembly) and acts as a spokesperson, passing on messages to the international community.

Presidencies since the creation of the Leading Group: Brazil, 2006; Founding Conference in Paris, 2006; Norway, 2006-2007; South Korea, 2007; Senegal, 2007-2008; Guinea, 2008; France, 2009; Chile, 2009-2010; Japan, 2010; Mali, 2011; Spain, 2011; Finland, 2012-2013; Nigeria, 2013; Chile, 2014-2015; Mali, 2016; Georgia, 2017-2018; Japan, 2019.

The Leading Group’s permanent secretariat is at the Ministry for Europe and Foreign Affairs in Paris. In liaison with the presidency, the permanent secretariat draws up the work programme and schedule of events, contributes to the organization of plenary sessions and high-level events, and runs the network of stakeholders involved in Leading Group activities.

For more information on the Leading Group on Innovative Financing for development.

Innovative financing for development and health

Innovative financing for development includes sources and mechanisms raising additional funding on top of conventional official development assistance (ODA), which is insufficient to achieve the SDGs the international community has committed to for 2030.

Innovative financing is closely tied in with the idea of global public goods and seeks to correct the downsides of globalization, including as regards climate issues and global public health.

The COVID-19 pandemic has highlighted the need to have a broad range of tools to effectively fund health care systems and services in the short, medium and long term. The impact on the crisis on ODA budgets and the domestic resources of States underline the potential of innovative financing for development, which offer capacities to respond to crises and additional resources to address the massive development finance needs generated by the crisis.

In November 2020, a study was published, produced by the think-tank ThinkWell and commissioned by the Ministry for Europe and Foreign Affairs as permanent secretariat of the Leading Group, on “Innovative financing mechanisms for Health: Mapping and Recommendations". It identifies 42 major innovative financing initiatives contributing to achieving SDG 3 on health, in five categories:

  • Results-based financing;
  • Catalytic funding;
  • Impact investing;
  • Socially responsible investing;
  • New channels of taxation.

The report takes stock of their performance and lessons to enable donors and development finance institutions to step up the use of innovative financing in order to achieve better results in the health field. Boosting innovative financing for health will involve the promotion of mechanisms that can, through leverage, foster the participation of the private sector and solidarity contributions.

Debate on innovative financing for development at the UN and the G7/G20

March 2002 – Monterrey Consensus

The notion of innovative financing was introduced in international debate at the 2002 Monterrey International Conference on Financing for Development: “We recognize the value of exploring innovative sources of finance provided that those sources do not unduly burden developing countries.” (paragraph 44, Monterrey Consensus).

2008 – Doha Declaration

The Doha Declaration reaffirmed commitments to increase the volume and effectiveness of ODA, while highlighting the success of the first innovative financing initiatives: “We recognize the considerable progress made since the Monterrey Conference in voluntary innovative sources of finance and innovative programmes linked to them. […] We encourage the scaling up and the implementation, where appropriate, of innovative sources of finance initiatives.” (paragraph 51, Doha Declaration).

December 2010 – Resolution on Innovative mechanisms of financing for development

Resolution 65/146, adopted by the UN General Assembly in December 2010, confirmed the importance of innovative financing mechanisms for development: “[I]nnovative mechanisms of financing can make a positive contribution in assisting developing countries in mobilizing additional resources for development on a stable, predictable and voluntary basis” (paragraph 4 of Resolution 65/146).

June 2012 – Rio Outcome Document The Future We Want

The Rio Outcome Document underlined the role of innovative financing and confirmed UN support for the work carried out by the Leading Group to step up innovative financing for poverty reduction: “We consider that innovative financing mechanisms can make a positive contribution in assisting developing countries to mobilize additional resources for financing for development on a voluntary basis. Such financing should supplement and not be a substitute for traditional sources of financing. While recognizing the considerable progress in innovative sources of financing for development, we call for a scaling-up of present initiatives, where appropriate.” (paragraph 267 of the Rio Outcome Document).

July 2015 – Addis Ababa Action Agenda

Although the subject led to tensions between groups of countries, France welcomed the adoption of a specific paragraph on innovative financing (paragraph 69) in the Addis Ababa Action Agenda.

This hard-won paragraph, adopted thanks to the efforts of the EU and strategic Southern partners like Chile, Egypt, South Korea and Mexico, acknowledged the progress achieved since Monterrey, welcomed the work of the Leading Group, and listed a number of tangible initiatives (IFFIm, green bonds, triangular loans, pull mechanisms and carbon pricing), while highlighting the respective roles of the public and private sectors. The only disappointment was the deletion of a reference to the solidarity levies promoted by the EU. In response to this setback, France and its civil society partners (the British NGO Stamp Out Poverty) proposed a Leading Group declaration to highlight the role and added value of solidarity levies on globalized economic sectors (financial transaction taxes and air ticket levies) in raising resources for sustainable development, and to encourage other States to implement them on a voluntary basis.

France, Chile, South Korea, Stamp Out Poverty (as civil society representative) and the International Organisation of La Francophonie (represented by the Secretary-General, Ms Michaëlle Jean), signed the Addis Ababa declaration and highlighted their disappointment that these instruments were not incorporated into the Addis Ababa Action Agenda. This event marked the start of a campaign with all UN countries and other civil society partners to obtain as many signatures as possible.

July 2019 – G7 Declaration on financing for sustainable development

Following the G20 Osaka declaration which recognized the importance of innovative financing mechanisms, the Declaration on financing for sustainable Development, adopted under the French G7 Presidency in 2019, confirmed G7 “support to mobilize additional resources for development and help increase the impact of existing resources” (paragraph 9), and welcomed the role of the Leading Group on Innovative Financing for Development in sharing best practices and promoting innovative financing internationally (G7 Declaration on financing for sustainable development).

Updated: December 2020