The objective of this report is to explore innovative financing instruments and approaches for catalyzing private sector financing to fill the climate-smart investment gap in cities. The report reviews the existing literature, highlights key barriers in scaling-up private investment in climate-smart urban infrastructure, and showcases innovative financial de-risking instruments and other financial instruments for private sector financing for low carbon, resilient urban investments.
The first chapter of the report introduces the topic and the second presents the challenges and the opportunities of urban climate investments.
The third chapter discusses climate-smart cities and types of urban mitigation and resilience investments.
The fourth chapter reviews and provides a framework to examine the interconnected layers of investment barriers specific to private investment, city financing, and climate-smart projects. Considering these risks allows investors and other stakeholders to better understand the complex web of challenges to expanding investment in urban climate projects and how they build on one another.
Chapter five presents 10 case studies of innovative financing approaches to address some of these barriers and mobilize private sector finance for low carbon, resilient urban development.
Finally, the conclusion in chapter six offers some key findings and considerations for the wider community of practice.
Overview: While achieving the goals of the Paris Climate Agreement rests on many factors, much depends on what happens in cities. Cities account for 55 percent of the world’s population and 80 percent of global gross domestic product (GDP).
DOCUMENT
Challenge & Opportunity: Climate change is also a leading factor in the rapid urbanization in emerging markets and developing countries which has placed significant strain on long-term strategic and spatial urban planning.
DOCUMENT
Climate-Smart Cities: Climate-smart cities aim to minimize environmental damage, reduce air pollution and GHG emissions, and maximize opportunities to enhance urban resilience, improving the natural environment and overall livability of the city.
DOCUMENT
Barriers to Expand Climate-Smart Urban Investment: A major barrier to private investment in climate action is a limited supply of bankable projects of sufficient quality and size that offer fair risk allocation between public and private capital.
DOCUMENT
Part 1 - Case Studies - Innovative Financing Solutions: Case studies of innovative financing solutions to circumvent the barriers discussed in the previous section and to mobilize private investment in cities in developing countries.
DOCUMENT
Part 2 - Case Studies - City as a Borrower: Case studies that focus on climate investment with the city as the borrower and presents modalities to address obstacles that cities have encountered in mobilizing private finance.
DOCUMENT
Conclusion: As the world’s population becomes increasingly urban, cities must invest in well-planned and well-coordinated physical infrastructure and natural capital solutions that enable them to reduce their emissions and increase their resilience to climate change and other shocks and stresses.
GPSC Global Online Series - Building Back Better: Green, Healthy and Inclusive Cities
Explore how cities can leverage the COVID-19 pandemic’s unprecedented disruption to facilitate a more environmentally and socially sustainable recovery