Unlocking the Future: Financing Sustainable Development in Bosnia and Herzegovina

The Fourth International Conference on Financing for Development (FfD4), recently held in Seville, Spain, reaffirmed a critical reality: development without financing is an aspiration without an anchor. The global Sustainable Development Goals (SDGs) financing gap currently exceeds USD 4 trillion per year, a stark reminder of the scale of the challenge - and the urgency to act- if we are serious about achieving sustainable development that benefits all. At a time when international cooperation is increasingly strained and public resources are stretched thin, this conversation is more relevant than ever.

The 2030 Agenda for Sustainable Development remains the world’s best blueprint to transform societies, economies, and the planet. For countries like Bosnia and Herzegovina, the challenge lies in mobilizing the resources to turn this vision into reality.
Doing so requires strong collaboration with local stakeholders across sectors to ensure that efforts are aligned, inclusive and impactful.

Seville brought together public and private sector leaders, regulators and development financing institutions from across the globe to rethink how financial systems can better serve people, planet, and progress. It was not only a platform to identify funding gaps, but a call to action - to mobilize capital in new ways, align public and private investment with SDGs, and empower countries to lead their own development journeys. 

Globally, 

• Infrastructure investment in developing countries fell by 35%, including in vital areas like water and sanitation.
• Foreign direct investment (FDI) declined for a second consecutive year, with Least Developed Countries receiving less than 2% of global FDI.
• Around 3.3 billion people live in countries where more is spent on debt servicing than on health or education.
• At the same time, every year, countries lose an estimated USD 500 to 600 billion due to tax avoidance, and while the global effective corporate tax rate has declined from 28% in 2000 to about 21% today, public demands for essential services have only increased.
• An estimated annual funding gap of USD 420 billion is holding developing countries from achieving gender equality as outlined in the Sustainable Development Goals.

Fair and progressive taxation, debt sustainability, and more equitable global financial governance must be at the heart of the financing for development agenda.  These factors shape a country’s capacity to invest in essential public infrastructure—such as schools, hospitals, and beyond—affecting not only education and healthcare, but a wide range of services vital to sustainable development, including climate resilience.

Eager to drive change and face the challenges, Bosnia and Herzegovina entered the conference in Seville with concrete progress and a unified agenda. In the lead-up to the Conference, the United Nations, in partnership with the Government of Bosnia and Herzegovina and the Embassy of Spain, convened a high-level roundtable in Sarajevo under the title Financing Development in Bosnia and Herzegovina. This gathering brought together leaders from the state and entity ministries of finance, senior advisors from the Presidency, international financial institutions, and development partners to identify concrete pathways for unlocking investment in development priorities.

The event reflected a growing consensus around a future-oriented financing agenda, grounded in the SDGs and supported by the country’s first-ever SDG Financing Framework. Endorsed in 2023 by the Council of Ministers, this framework marks a turning point: it signals a shared commitment across all levels of government in Bosnia and Herzegovina to align policies and financial systems with long-term development goals and international standards.

Yet the financing challenge remains stark. Bosnia and Herzegovina currently invests approximately USD 1,545 per capita in SDG-related spending—62% below the average of similar upper-middle-income countries. With modest domestic savings, limited credit to the private sector, and a heavily public-driven financial landscape, the country risks falling short of its 2030 ambitions unless new financing sources are activated and existing resources are better targeted. As much as BAM 3.4 billion in surplus banking funds remain underutilized, and while capital markets are still in their early stages, there is a growing appetite for innovation. To close the financing gap, the SDG Financing Framework recognized that Bosnia and Herzegovina would need to increase cumulative investment from the projected BAM 79.9 billion to BAM 86.1 billion by 2030. The opportunities are equally clear. 

The SDG Financing Framework provides a practical response: new instruments like green and SDG bonds, energy performance contracting through Energy Service Companies, and apex financial structures to support small and medium enterprises. It envisions strategic investment funds, blended finance facilities, and innovative partnerships that can crowd-in private capital and reduce dependency on external grants and loans. In short, it offers a roadmap not just for financing development, but for transforming the financing system itself across the country.

Importantly, both entities— Republika Srpska and the Federation of Bosnia and Herzegovina—are already moving forward, preparing to launch investment funds and SDG bonds, with feasibility studies expected by the end of summer 2025. This marks a strong signal of political will and commitment to implementing the SDG Financing Framework and narrowing the financing gap. 

In Seville, Bosnia and Herzegovina was represented by H.E. Željka Cvijanović, who affirmed that Bosnia and Herzegovina is not just participating in the global conversation—it is seeking to actively shape its course.

Sustainable development financing is not only a global priority—it is also a cornerstone of the country’s path toward EU membership. The adoption of a new Reform Agenda to unlock the funds under the EU’s Growth Plan for the Western Balkans has the potential to be transformative, opening access to significant funding while driving forward essential reforms. Spain’s partnership with the United Nations and institutions in Bosnia and Herzegovina in convening the Sarajevo roundtable reflects our shared commitment to turning these opportunities into tangible progress for all citizens of Bosnia and Herzegovina.

As we look ahead, the focus must shift from planning to action. It is time to turn frameworks into financing, and policies into real-world progress. Achieving this will take persistence, strong coordination, and mutual trust. International financial institutions must align more deliberately with country-led financing strategies. Donors and bilateral partners must find new ways to de-risk investment environments. Governments must continue advancing public finance reforms, especially program-based budgeting and gender-responsive financing. Equally important is fostering an enabling climate for the private sector— through clearer regulations, stronger financial infrastructure, and fair competition—so private capital can play its full role in sustainable development.

Bosnia and Herzegovina has begun this journey. Now is the time to build momentum, deepen partnerships, and deliver results. Seville may mark a milestone—but it is the months ahead that will determine whether promises become reality. Sustainable financing for the SDGs is not just a goal— it is a catalyst to empower people, expand opportunities, and ensure no one is left behind.