Developing countries, including Nepal, face the pressing challenge of financing for development. The Fourth International Conference on Financing for Development (FFD4) was recently held in Seville, Spain (June 30–July 3, 2025), building on previous declarations—the Monterrey Consensus 2002, the Doha Declaration 2008, and the Addis Ababa Action Agenda 2015—to address the Sustainable Development Goals financing gap. The Compromiso de Sevilla for Action (Sevilla Commitment for Action) reinforces that developing countries are off-track in meeting Sustainable Development Goal (SDG) financing gaps, which amount to $4 trillion annually.

Nepal’s Permanent Representative to the United Nations was one of the signatories of the FFD4 outcome document, alongside representatives from Zambia, Norway and Mexico. Like other declarations, this year’s pledge to close the financing gap through urgent reforms and scaling up investment is a good step. Amid rising geopolitical tensions, climate disruption and widening inequalities, such international commitments are always ambitious, but implementation challenges remain.

Several flagship initiatives in the Compromiso de Sevilla 2025 involve institutional, structural, or systemic innovations, signalling a departure from prior frameworks. Unlike previous declarations, FFD4 introduces a systemic approach to address the financing gap. The conference introduces the Sevilla Platform for Action with 130 initiatives to ensure implementation, accountability and further increase public and private investment for sustainable development, including actions to strengthen tax systems and domestic resource mobilisation.

Strengthening the fiscal system

FFD4 aims to support architectural reform at both the national and global levels by promoting transparent fiscal systems through Integrated National Financing Frameworks (INFFs), enabling countries to choose the best policies for their economies. Fiscal systems will be strengthened by promoting budget transparency and accountability, implementing transparent, data-driven procurement systems, broadening the tax base, supporting progressive tax systems, ensuring transparent tax expenditure reporting and encouraging gender-responsive budgeting, among other measures. FFD4 prioritises tax justice through the UN Framework Convention on International Tax Cooperation, ensuring all countries have an equal voice in setting the international tax agenda and shaping and deciding rules. The Monterrey Consensus and Addis Ababa Action Agenda focused on domestic resource mobilisation and tax governance, but progress has been slow. INFFs were introduced in Addis but were not mainstreamed as policy platforms.

Ultimately, FFD4 will help scale up demand-driven institutional, technological and human capacity-building support for developing countries to strengthen fiscal systems and domestic resource mobilisation. FFD4 also requests development partners to double their support for countries aiming to increase tax-to-GDP ratios, especially those seeking to raise their ratios to at least 15 percent. Taxation is an important component of financing the SDGs, and FFD4 focuses on progressive taxation, especially on high-net-worth individuals, with beneficial ownership registries, a country-by-country reporting database, and capacity-building support for developing countries. The Addis Agenda covered tax cooperation, but FFD4 operationalises it multilaterally.

New debt instruments

Developing nations face the challenge of unsustainable debt, high borrowing costs and inadequate fiscal space. Currently, 52 percent of low-income countries are assessed as facing a high risk of debt distress or are already in debt distress, and 20 percent of developing countries’ revenues go to debt servicing. To tackle this, FFD4 emphasises debt sustainability by introducing innovative debt instruments such as the Debt Swaps for Development Hub (which strengthens capacity and enhances collaboration to scale up debt swaps and lower debt service burdens), the Debt-for-Development Swap Programme (which converts 230 million Euros of debt obligations of African countries into investments in development projects), and the Debt “Pause Clause” Alliance (a coalition of countries and MDBs to suspend debt service payments during crises). The Sevilla Forum on Debt will help countries learn from each other and coordinate their approaches to debt management and restructuring, with a UN entity serving as its secretariat.

The Monterrey Consensus and the Addis Ababa Declaration called for debt relief and addressing illicit flows, respectively, but neither delivered concrete actions for debt sustainability. FFD4 proposes a UN-led Sovereign Debt Convention, a borrowers’ forum and a global debt registry. New innovative financial arrangements are already in place, such as debt-for-development swaps that are offered and supported by the World Bank Group, in collaboration with the International Monetary Fund, through mechanisms such as the World Bank Guarantee Platform. This financial model allows countries to exchange expensive debt for lower-cost financing, with savings redirected towards development priorities like education or health.

Catalysing investment

FFD4 aims to increase the mobilisation ratio of private finance from public sources by 2030, focusing on strengthening the use of risk-sharing and blended finance instruments. These include first-loss capital, guarantees, local currency financing and foreign exchange risk instruments, tailored to national circumstances. While the Addis agenda endorsed blended finance, it lacked accountability metrics and structural tools. FFD4 now invites Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIs) to harmonise and strengthen impact metrics to support mobilisation targets and align incentives with maximising development impact according to national needs.

Notable initiatives include scaling up catalytic capital platforms such as the Platform for Investment Support and Technical Assistance (PISTA), outcome-based finance models like the Outcomes Accelerator and facilitating diaspora investment. For the first time, FFD4 brings together business groups and investor alliances through the FFD4 Business Steering Committee. At the SDG Investment Fair, for example, developing countries pitched over $5 billion in projects to investors and development financiers.

FFD4 also calls for reducing structural barriers to micro, small and medium enterprises’ (MSMEs) access to finance, especially in developing countries, through expanded access to microcredits, local financial institutions and digital tools, while promoting capacity building and leveraging DFIs to provide guarantees, on-lending and local currency financing. FFD4 also reaffirms that remittances are a complement to development assistance and foreign investment, not a substitute. Hence, the conference commits to reducing remittance costs to below 3 percent by 2030 through digital remittance solutions, encouraging competition among money transfer operators, implementing transparency requirements for fees and commissions, and accelerating access to transaction accounts and financial services for migrants and their families.

Lastly, FFD4 uses the Multidimensional Vulnerability Index (MVI) to complement Gross Domestic Product (GDP) in determining eligibility for concessional finance, especially for integration into graduation planning and special windows for small island developing states. Previous frameworks relied solely on GDP thresholds, but now MVI, including gender budgeting, green taxation and care economy investments, are embedded across the public finance agenda.

The successful completion of the conference and the positive affirmation from the UN, countries, MDBs, investors and civil society demonstrate that multilateralism is still alive. However, implementing such ambitious goals will depend on the coordinated efforts of all parties.