Track 03 Investment

• Address levers of systemic change (enterprises with the potentialtoscale,developmentofnewvaluechains,service delivery,naturalecosystems,etc.)
• Identify the most suitable sources of funding for each initiative and align its design accordingly
• Leverage existing national or supranational financing frameworks
• Be clearly integrated and consistent with the region’s general budget
• Integrate impact within performance criteria through clear indicators and measurement methodologies, leveraging ESG data and SDG alignment to guide decisions
• Be co-created with territorial actors through an equitable and transparent engagement, leveraging the SDG Council and adopting practices like Participatory budgeting

1. Snapshot of the current financial landscape

• Overview of financial sources
• Currentpolicyandfinancialregulatory landscape
• Information on government structures and stakeholders and their capacities

2. Cost estimates and investment needs

• List strategic goals and objectives of the Regional SDG strategy and indicate cost estimation for each
• Overview of financing gaps: identification of areas that are underfunded

3. Sources for financingthe Regional SDG Strategy

• Domestic Resources (national and regional)
• Domestic private resources
• International resources (Public and private)
• Other

4. Financing strategy

• Regional Resource mobilization e.g. tax reforms, new revenue sources etc.
• Private sector investment e.g. promoting public-private partnerships
• International Cooperation e.g. partnerships, development aid etc.
• Innovative financing e.g. green bonds

5. Enabling environment

• Building financial technical capacity
• Raise awareness
• Strengthening institutional frameworks

6. Monitoring and evaluation

• Tracking progress, including identifying key performance indicators
• Produce annual SDG financing report

Aligning with an Integrated National Financing Framework (INFF)

In some cases, an Integrated National Financing Framework (INFF) may have already been established by the national government. If an INNF is in place, efforts should be made to ensure alignment – or alternatively, the region can consider the development of a Regional Integrated Financing Framework.

The Addis Ababa Action Agenda (AAAA) was adopted in 2015 and provides the roadmap and tools to finance and implement the 2030 Agenda for Sustainable Development. It details how to mobilize the means of implementation and expands on the financial policy commitments needed. It calls for countries to establish Integrated National Financing Frameworks (INFF). INFFs provide a framework for financing national sustainable development priorities and goals. While a country’s sustainable development strategy outlines what needs to be financed, INFFs focus on how the strategy will be funded and implemented.

They help policy-makers:

• Mobilize additional financing to support sustainable development priorities;
• Improve alignment of different types of finance – domestic, international, public, private – with national priorities and needs, including development cooperation;
• Enhance coherence across different financing policies, aligning them to medium and long-term sustainable development priorities;
• Better manage risk and an increasingly complex financing landscape;
• Better articulate the needs to external investors, donors and the international development community.

While INFFs are primarily a national-level framework, they can also be considered at the regional level. These regional INFFs should focus on aligning financing with regional sustainable development priorities and goals, which at the same time, supporting national INFFs by strengthening regional financing and capacity. A regional INFF can contribute to the financing of the region’s SDG-related activities, mobilize regional resources and align capital with the SDGs as well as enhance the effectiveness of the national INFF thereby promoting coherence at multiple levels of government. INFFs are built around four key components:

• Assessments and diagnostics
• A comprehensive financing strategy
• Systems for monitoring and review
• Governance and coordination mechanisms

For more information on INFFs click here.