By Aris Moro
Research by the C40 Cities Climate Leadership Group (C40) and other organisations identified access to finance as one of the most significant barriers that mayors and city leaders face in delivering on their climate change plans for their cities. This challenge is particularly acute in cities from developing countries and emerging economies where there is a shortage of expertise in securing investment for infrastructure projects.
To help address this challenge, the C40 Cities Finance Facility (CFF) was launched at the Climate Summit for Local Leaders at Paris City Hall during the COP21 negotiations in December 2015. The CFF is currently funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), and supported by the Inter-American Development Bank (IADB). Delivery of technical assistance is coordinated jointly by C40 and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
After a thorough and comprehensive application process, the first two pilot projects have been announced: the CFF will support the development of cycling infrastructure in Bogotá and assist with the purchase of a fleet of electric buses in Mexico City. The cities will each receive up to $1m in dedicated technical assistance, provided by experts in urban infrastructure project preparation. Once fully funded and operational, the projects will deliver significant reductions to greenhouse gas emissions, supporting the cities’ efforts to become sustainable, low-carbon megacities.
The CFF’s technical experts will ensure city officials are fully involved in the project preparation, thereby developing capacity within each city government. Successful financing and project structuring models and mechanisms will be shared with other cities across the C40 network and beyond, creating replicable models that have impact far beyond the individual cities involved.
The announcement has been welcomed by C40 Chair and Rio de Janeiro Mayor Eduardo Paes: “Mayors of the world’s great cities know what needs to be done to tackle climate change and create resilient communities for their citizens. I have made it a priority of my time as Chair of C40 to ensure cities can get access to the finance they need to deliver on their climate change ambitions. C40 cities have committed to cut their greenhouse gas by 3.0 Gt by 2030 and the CFF has a major role to play in helping cities in the Global South to meet those targets. I am delighted to see these pilot projects receive the support they deserve.”
Dr Gerd Müller, German Federal Minister for Economic Cooperation and Development, also welcomed the selection: “Cities play a vital role in efforts to achieve our climate and development goals. Often one bottleneck is poor access to finance and I hope that the initiative will quickly prove successful and thus win more supporters.”
The CFF will deliver technical assistance in the two pilot cities until the end of 2017. The intention is to secure additional funding beyond 2017 to continue supporting these cities and to open applications for a further round of support to eligible C40 cities at the end of the pilot phase.