C40 Cities and the Overseas Development Institute are inviting feedback on a proposal for a new finance institution that would help cities fund green initiatives.
Cities must have greater access to funding options if they are to realise their climate action and sustainability ambitions, according to a new report.
This lack of funding support is particularly notable in low- and middle-income countries.
To this end, a working paper, released by the C40 Cities Climate Leadership Group and the Overseas Development Institute (ODI), is calling for the creation of a new institution to finance green city projects.
The initiative is supported by ClimateWorks Foundation and law firm Baker McKenzie.
Under a low-carbon scenario, the paper forecasts that $93 trillion will need to be invested in infrastructure globally by 2030 with 70 per cent of this infrastructure related to urban areas.
This is in contrast with $463bn across the 2015-2016 period.
The paper scopes the feasibility of a Green Cities Development Bank (GCDB), which would combine key elements of development banks with the proven green bank model, focused on city support.
Such an institution would lend directly to cities and subnational governments enabling the rapid development of sustainable urban infrastructure projects.
“More than 80 cities have already committed to develop climate action plans that deliver their fair share of emissions reductions to keep global temperature rise below 1.5 degrees Celsius, said Mark Watts, executive director of C40 Cities writing in a blog post.
"A Green Cities Development Bank would radically improve the financing conditions for cities and help tackle the significant financing barrier cities face”
“That represents a huge amount of sustainable infrastructure and investment that needs to be urgently delivered. That is why we need transformational solutions, capable of deploying capital to cities rapidly and at scale. A Green Cities Development Bank would radically improve the financing conditions for cities and help tackle the significant financing barrier cities face.”
“For cities in the global south with limited resources and competing priorities, a Green Cities Development Bank can help us accelerate sustainable development programmes which we could not have supported otherwise,” said Anies Baswedan, governor of Jakarta.
In many developing countries, the will to go green is there but there are too many competing priorities to prioritise green projects, such as electric buses. The provision of basic services, such as water, electricity, and sewerage, remain a priority,” added Krish Kumar, chief financial officer of eThekwini municipality, Durban.
“In addition, access to funding green and smart city initiatives is a huge obstacle. Accordingly, there certainly is a need for such a development bank due to the growing demand for green infrastructure financing in cities. We therefore welcome and fully support such a development bank.”
The paper has been launched as a consultation draft with the aim of capturing and incorporating feedback and ideas from across the sustainable cities sector.
C40 Cities is collating feedback and invites submission of any observations, comments or expressions of support to James Alexander, director of the city finance programme at C40 Cities at [email protected]
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