EU and UNDP: up to $20,000 and expert support for M4EG member municipalities to launch innovative finance, from revolving funds to bonds, apply by 13 November

The United Nations Development Programme (UNDP) has launched the Innovative Finance Challenge (IFC) under the Mayors for Economic Growth (M4EG) facility funded by the European Union, alongside the City Experimentation Fund (CEF) funded by the Ministry of Finance of the Slovak Republic. The initiative aims to support municipalities in designing and deploying tailored innovative financial mechanisms to address specific local development challenges.

Selected municipalities will receive up to USD 20,000 in grant support accompanied by dedicated technical advisory services. Participating local authorities are expected to test and implement their financing solutions over an eleven-month period running from January to November 2027.

The deadline to submit applications is 13 November 2026. Applying local governments must commit to a minimum co-financing contribution of 10% in cash or in-kind.

What is funded

The grant call finances the piloting, design, and practical launch of innovative local financing mechanisms. Supported tools include revolving funds, community crowdfunding platforms, municipal asset management and monetization strategies, property tax revenue enhancement models, municipal bonds, and community land trusts. Municipalities are also encouraged to propose their own novel mechanisms tailored to local realities.

Proposed instruments must tackle concrete structural bottlenecks rather than serve as broad, non-specific revenue tools. The focus must be on resolving hurdles related to municipal revenues, access to external finance, private sector engagement, civic involvement, or broader investment readiness to stimulate investments in local development priorities.

Who can apply

Eligible applicants are municipalities located in Ukraine, Armenia, Moldova, and North Macedonia. Applicants should be affiliated with the Mayors for Economic Growth network and demonstrate an interest in strategic innovation and municipal experimentation.

Applying authorities must show institutional commitment to addressing local economic constraints and possess the operational capacity to engage in advisory work and pilot execution throughout 2027.

Conditions and requirements

Each beneficiary municipality is allocated financial support of up to USD 20,000 alongside customized expert consulting. A mandatory co-financing commitment of at least 10% of the total awarded grant amount is required, which may be contributed in financial terms or through in-kind resources.

Practical tip. Frame your proposal around a precisely identified financial bottleneck in your community, such as low investor engagement or underutilized public assets, rather than requesting general budget support. The evaluation focuses on testing viable financial models, so demonstrating feasibility and administrative readiness to deploy the chosen instrument will strengthen the bid.

How to apply

Submissions must be prepared using the designated online application documents and submitted via the official application form before the deadline on 13 November 2026. The call does not allow late submissions.

Following the evaluation process, successful municipalities will be contracted to participate in the challenge program, with project implementation running from January through November 2027.

Applications are submitted on the donor’s page: undp.org.