Innovative financing for development

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. Rwanda is holding the rotating presidency of the Leading Group for 2022.

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.

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.