Private Capital for Climate-Resilient Cities: How Can the Double Leap Succeed?

How can rapidly growing cities provide adequate housing while becoming more climate-resilient? Birgit Pickel, Director General – Sustainable Development and Climate, BMZ, discusses the role of cities, municipal partnerships and urban financing at WUF13.

We are here at the World Urban Forum, the world’s most important specialist forum on urbanisation and sustainable urban development. What brings you here personally, and what are you hoping to get out of this forum?

We all know that urbanisation is a clear megatrend. Almost 50 per cent of the world’s population lives in cities, and that number will continue to rise. I have just been speaking with an Indian delegation: in India, more than 500 million people currently live in cities, and by 2050, that figure will be close to one billion. That illustrates the scale of urbanisation and why it is so important to talk about the urban sector, urban development, and cities.

That is what motivates me to come here and work alongside the many actors from governments, civil society, the private sector, and international organisations who are gathered at the World Urban Forum to look for solutions to this trend, which will continue whether we want it to or not.

Why do you see sustainable urbanisation and urban development as an important area of action for German development policy?

Germany is a country with a very strong tradition of subsidiarity, with strong cities and municipalities. It is part of our history that this is a good model. That is why there has long been considerable demand for cooperation in the area of urban development, particularly in the area of decentralisation. This is a firmly established pillar of German development cooperation.

Our partner countries bring considerable interest to the table, and we have the know-how and expertise to contribute to advancing urban development and sustainable development more broadly – including the implementation of international agreements, the Paris Climate Agreement, and the 2030 Agenda. Through our work in cities and municipalities, and on decentralisation, we are close to people on the ground, so that solutions can be found that genuinely improve lives locally: better housing, better water supply, access to energy, and, a very important aspect, participation at the municipal level.

The figures are well known: by 2050, two-thirds of humanity will live in cities. The pace of urbanisation is particularly dramatic in Africa. During these six days of the conference alone, African cities will probably gain around 240,000 new residents. Where do you see the most pressing challenges, and where are the biggest obstacles?

Yes, urban growth on the African continent is enormous, as it is in India. This growth is often accompanied by a great deal of informal development. When people come to cities looking for somewhere to live, they frequently cannot find suitable housing.

We know this issue in Germany, too. When refugees arrive and settle here, municipalities face the challenge of providing housing, nursery places, and school places. All of these questions have to be addressed by municipalities on the African continent on a far greater scale.

That is precisely why I think it is right to come to the World Urban Forum and look for solutions together. There is a great deal of mutual learning happening here: African countries are exchanging ideas with countries in Latin America. Today, we had Mexico and Argentina on the panel, alongside India and Cambodia. These very different countries are discussing with one another what good solutions look like. I find that a very promising approach.

Through our development cooperation, we want to help cities, particularly on the African continent, make the double leap: on the one hand, managing the growth that is happening now as people migrate to cities in search of work, and on the other, finding a climate-resilient, sustainable approach at the same time. This way, we can avoid and reduce emissions from the outset. Cities can be planned and equipped to better withstand the extreme weather events that are increasing as a result of climate change. We pursue this both in cooperation with governments and with communities, civil society, and the private sector – in other words, with a range of actors.

Let’s take a closer look at the German approach: what defines it, and what levers is the Federal Government using?

The German approach is interesting in that we, as the Federal Government, are now the largest funder of international public development finance, partly given the sharp decline in US financing, even though our own development cooperation budget is also shrinking. Nevertheless, we can still do a great deal. We can seek solutions through technical advice and exchange. For example, we have a large number of municipal partnerships between cities, where solutions are sought in a very hands-on way. These strong partnerships are a core component of the German approach.

In addition, through both technical cooperation via GIZ and financial cooperation via KfW, we are trying to use the resources we have to mobilise additional funding for development investment. A major topic here at the World Urban Forum, for example, is how we can help cities in South Africa, Morocco, Kenya, and India to mobilise financing for their own urban development and essential infrastructure, such as water supply. Many cities are currently unable to do this. They cannot take out loans because the necessary framework conditions are not in place. That is where German development cooperation comes in.

What is interesting is that empowered municipalities, such as Cape Town in South Africa, also become attractive as contracting partners in their own right, including for German companies and the German economy. We are trying, so to speak, to create win-win solutions for both sides.

If you had to highlight one key agreement, insight, or impulse from this rich and wide-ranging forum, what would it be?

The impulse I am taking away is to take the role of cities in the development of so many countries genuinely seriously and to place it at the centre of our thinking, because so many issues crystallise there. When we talk about participation, better water supply, access to energy, or the provision of adequate, affordable housing, cities play a central role. That impulse runs through all the discussions here, and I am taking it home with me for our cooperation work. Beyond that, I believe there is still enormous scope to bring private investment to the table so that these sustainable, climate-resilient, future-relevant investments are actually made.

Thank you very much for your time.