By James Alexander, Head of C40 Finance and Economic Development Initiative
Across the world, mayors of C40 member cities are developing their visions for a low carbon future. Yet they frequently report, as revealed in C40’s Unlocking Climate Action in Megacities report, that a lack of access to finance is one of the biggest barriers preventing cities from delivering those bold plans. C40 cities have the leadership, the powers and the determination to act on climate change, however too frequently lack the financing to take the necessary action.
To prevent catastrophic climate change in the years ahead requires a rapid shift to dramatically increase the flows of climate finance into cities, and support a transformation in the availability of urban capital.
This week during the World Cities Summit in Singapore C40 and our partners Siemens and Citi have launched a detailed guidance document, to help cities looking for new models or techniques to finance sustainable infrastructure.
New Perspectives on Climate Finance for Cities provides insights on potential financing options for climate change programmes and projects in cities, including details of the lead times, steps required, and lessons learned from cities around the world.
The report includes detailed chapters on climate financing techniques and mechanisms, including green bonds, equity capital, emissions trading schemes and best approaches to international financing institutions and agency finance.
The report also assesses the ways cities can utilise the growing number of climate funds that now exist at the international and regional level. In addition, it provides guidance to cities considering setting up their own green funds as many C40 cities have already done, including Toronto, Melbourne, Amsterdam, London Chicago, and New York.
Case Study: London
Investing in London’s energy and waste infrastructure
The London Green Fund was developed under the European Commission’s JESSICA initiative (Joint European Support for Sustainable Investment in City Areas) which allowed European regions to use a portion of EU grant funding to make repayable investments in projects, thereby creating a revolving investment fund for the regeneration of urban areas. The London Green Fund is a Holding Fund, managed by the European Investment Bank and is made up of £50 million from the European Regional Development Funds and £50 million in match funding from the Mayor of London and the London Waste and Recycling Board (LWaRB). The Fund provides equity, loans or guarantees to projects at an early stage of their development or construction phase where project risks are higher, to encourage further commercial investments in environmental projects of this nature. It supports projects in line with the priorities of the Mayor’s strategies. The London Green Fund is in a position to take a longer-term view of the scale and timing of financial returns expected from their investments than the commercial markets, particularly in the current economic environment.
C40 and our partners are committed to build on this work to support C40 cities to achieve our shared ambition of a climate financing landscape that allows cities to realise their bold low-carbon visions.