Alternative Finance

Alternative Finance refers to non-traditional ways to finance and deliver development outcomes from private or public sources. New financial mechanisms and technologies include crowdfunding, social and development impact bonds, pay-for-success systems, forecast-based financing, and equity-based investments in social good projects. These approaches are being used to access financing that can contribute to the achievement of the Sustainable Development Goals.

Development of Impact Investment Platform LiveLebanon 2.0 with crowdinvesting and blockchain technology: CedarCoin (Lebanon)The donation-based fundraising platform Live Lebanon is being transformed into an impact investment platform, Live Lebanon 2.0. The new digital impact investment platform will provide sustainable alternative financing solutions to development priorities, focusing on smaller investors and creating a stable impact investment community that is not dependent solely on international donors. The updated digital platform will aggregate various crowdinvesting projects hosted on external platforms, with a focus on areas such as reforestation/nature conservation, solar energy, social entrepreneurship, and health. By developing a digital coin called “CedarCoin,” blockchain-based technology is being used to provide investments in reforestation for cedar forests.

Green Finance Innovation Platform: Derisking Renewable Energy Investments in the Arab Region
Less than 10% of the climate investment called for by countries' Nationally Determined Contribution (NDC) climate plans under the Paris Agreement have been met. Even where large-scale finance exists, it is only for large mega projects which often bring little direct benefit for broader development goals, such as those identified by the SDGs. Scaling up climate finance will close this large gap, through reducing barriers for private and public investment in climate solutions that reach all country typologies in the region and putting in place an enabling environment of policies and partnerships that can also help accelerate SDG results. Through support to the emergence of the Pan-Arab Clean Energy (PACE) platform, a network of public and private partners across 18 countries in the Arab region, with the International Renewable Energy Agency (IRENA), the Regional Center for Renewable Energy and Energy Efficiency (RCREEE), and country partners across the region, new pathways of acceleration will be identified, new investment projects will be generated, and new public-private partnerships will be established, significantly expanding the ability of countries to attract and deploy climate finance under NDCs. Beyond conventional commercial investments for large-scale projects, innovative approaches will be generated to achieve scale of results for sustainable energy investments with benefits across SDGs – poverty reduction, women’s empowerment, water security and other development priorities in the region.

Crowdfunding Academy (Egypt)

The Technology Innovation and Entrepreneurship Center (TIEC), UNDP Egypt, and the UNDP Alternative Finance Lab (AltFinLab) are collaborating to foster a crowdfunding capability in Egypt. In February 2019, they kicked off a week of activities with a national roundtable, hosted by the American Chamber of Commerce, on the challenges and opportunities of crowdfunding in Egypt. The roundtable brought together high-level representatives from the banking sector, entrepreneurs, investors and enterprise support organizations. Issues raised included regulatory and policy challenges facing the entrepreneurial ecosystem when planning and executing crowdfunding campaigns, the need to create an enabling environment for innovative models to emerge, and an emphasis on financial literacy/awareness to improve penetrability rates as currently only around 10% of the Egyptian population have a bank account. A one-day Training of Trainers (ToT) was then held, targeting supporting entities working closely with startups and providing them with the know-how to support their startups with accessing alternative finance and specifically to develop crowdfunding campaigns. Immediately following the TOT, the trainers then supported a three-day Crowdfunding Academy, led by the AltFinLab, in which 10 startups participated.