Vienna, April 2025 - The foundation of the United Nations Industrial Development Organization’s engagement with financial institutions lies in technical cooperation, which is essential for driving industrial development and advancing progress toward Sustainable Development Goal (SDG) 9. Industries often struggle with financial constraints that hinder their ability to innovate, expand, and contribute meaningfully to economic growth. Recognizing this challenge, UNIDO has positioned itself as a bridge between financial institutions and the industrial sector, ensuring that capital flows into high-impact areas.

To enhance this role, UNIDO established the Division of Innovative Finance and International Financial Institutions (IFI) in 2022. This division was created to strengthen partnerships with development banks, international financial institutions (IFIs), and private investors, leveraging a mix of financing mechanisms to unlock investments for sustainable industrial development.

“A key component of IET/IFI’s strategy is working closely with development finance institutions at global, regional, and local levels” said Karim ould Chih, Division Chief of IET/IFI, “by mobilizing resources and structuring investment-ready opportunities, we combine financial resources with technical expertise to facilitate impactful investments”.

Addressing technical gaps and fostering a conducive ecosystem are essential for ensuring effective and impactful investments. UNIDO plays a critical role in providing technical assistance to financial institutions and enterprises alike, ensuring that investments are not only available but also viable and impactful. Capacity building is another vital aspect of these efforts, as the organization works with policymakers to develop institutional frameworks that support sustainable investments. By enhancing the knowledge and technical capabilities of stakeholders, UNIDO creates an environment where financial institutions can confidently invest in industrial development.

By leveraging diverse financing mechanisms, UNIDO works to unlock investments that drive sustainable industrial development. Engaging with development finance institutions at different levels allows UNIDO to mobilize financial resources and structure investment-ready opportunities, ensuring that technical expertise accompanies financial support. By integrating blended finance mechanisms, investment risks are mitigated through instruments such as guarantee mechanisms, concessional loans, and co-financing structures. This approach helps lower capital costs, making investments in critical sectors—such as manufacturing, clean energy, digital infrastructure, and SME development—more feasible and attractive, thereby strengthening industrial productivity and technological progress as envisioned in SDG 9.

In 2024, UNIDO, through the support of IFI, actively engaged with over 60 leads across international financial institutions, strengthening their involvement in the early stages of project development. These efforts led to the creation of innovative financial instruments aimed at improving access to finance and scaling up projects.. Significant partnerships were also established through targeted technical inputs, event sponsorships, and training sessions.

A recent example of UNIDO’s collaboration is its work with the Eurasian Development Bank (EDB). Since UNIDO’s General Conference in 2023, the two institutions have engaged in regular exchanges on strategic priorities, leading to advanced stages of cooperation.

Currently, UNIDO and EDB are working together in Kyrgyzstan under UNIDO’s Programme for Country Partnerships. Their joint efforts focus on capacity building at the institutional level to create favorable conditions for the development of agro-industrial parks. This initiative aims to unlock valuable investment opportunities, fostering economic growth in the country.

Additionally, UNIDO and EDB are exploring joint initiatives in industrial digitalization across Europe and Central Asia. By combining EDB’s financial resources from its Fund for Digital Initiatives with UNIDO’s expertise in digital transformation and artificial intelligence, the two institutions seek to enhance productive capacities in manufacturing. 

Furthermore, the two organizations are collaborating to address water scarcity by enhancing irrigation technologies in Central Asia. They recently released a joint publication “Irrigation Equipment Production in Central Asia: Industrializing the Water Sector”, highlighting the growing need for sustainable water management and the localization of irrigation equipment production across the region. The publication outlines key strategies for industrializing the sector, including establishing a regional cluster for manufacturing and servicing modern equipment, implementing favorable regulatory and cluster policies, and developing critical infrastructure.

Looking ahead, UNIDO will continue to build upon these achievements by deepening engagement with international financial institutions, further refining financial solutions, and proactively expanding partnerships. Priority will be placed on fostering innovative financial tools and approaches that have the potential to enhance project sustainability, scalability, and impact. 

For further information, please contact: 

Karim ould Chih

Chief 

Division of Innovative Finance & International Financial Institutions