Ambassador Chris Lu
U.S. Representative for UN Management and Reform
New York, New York
February 1, 2022
Thank you for having me today.
On behalf of the United States, I’d like to express our appreciation to UNOPS for its innovative work to drive development in renewable energy, affordable housing, and other critical sectors. I also want to commend the Executive Director for UNOPS’ commitment to gender mainstreaming in its work and gender parity in its workplace.
The U.S. believes strongly that supporting the full participation of women and girls in social, economic, civic, and political life is essential to progress in every other area. The U.S. supports the initial transfer of $105 million to the S3i reserve. However, we are concerned about the growth of overall reserves, which reached $286 million at the end of 2020. We will continue to closely monitor overall return on investments made by UNOPS in the context of its 2022-25 Strategic Plan.
We note that the Board of Auditors has issued recommendations on the minimum and maximum operational reserve requirements regarding S3i. When will UNOPS will implement these recommendations?
In addition, now that the reserve fund for S3i has been established, what is the need for the Growth and Innovation reserve?
It is our understanding that UNOPS has equity positions in several entities receiving S3i funds. Could you provide the Board with a specific example of an equity investment including general structure, expected timeline of the investment, and projected return. What UNOPS policies govern equity stakes in UNOPS projects?
While we recognize that successful innovations are accompanied by risks and failures, the U.S. is concerned about the bad debt allowance which represents 40% of all funds invested through the S3i initiative as of December 31, 2020. What steps will UNOPS take to minimize such losses in the future?
Finally, the U.S. does not support further transfers to the S3i reserve without explicit executive Board approval. And we expect any such requests to be supported by detailed justifications including project specific proposals.
The United States looks forward to reviewing the comprehensive evaluation at the end of the pilot phase in December 2023.