We interview experts in the field of climate finance to share insights on how cities can access finance for sustainable, resilient development. In this video, Priscilla Negreiros from CCFLA is interviewed by ICLEI Africa’s Rebecca Cameron.
Highlights from this video
A recent report from the Coalition of Urban Transition states implementing low carbon measures in cities by national governments will be worth almost US$ 24 trillion by 2050 and this could reduce emissions from cities by 90%. There are a lot of opportunities and improving governance is a key area.
Globally around 2.5 – 3 billion people are expected to move from rural to urban areas by 2050 and there is a need for climate resilient infrastructure to support this shift.
This is special in the case of Africa whose population of around 1.1 billion will actually double by 2050 and more than 80% of that increase will occur in cities. Very importantly, two-thirds of the urban space that Africa will have in 2050 does not exist and so must be built over the next 45 years. Given the crucial role that cities will continue to play, there is a central need to respond to challenges faced in having access to finance to build all this infrastructure.
Main barriers to unlocking climate finance
1. Municipal budgets. Municipal governments are unlikely to finance the large green infrastructure gap themselves due to budget restriction and sometimes high levels of debt, especially in cities in emerging economies.
2. Creditworthiness. Trying to look for finance outside their own budgets and outside national government budgets – there is a general lack of creditworthiness, which is the likelihood that a city will be able to respond to a credit obligation. According to the World Bank only 4% of developing cities are creditworthy in international capital markets.
3. Bankable projects. We have a lack of bankable projects with a sufficient size or quality. So cities are often unaware of investor’s needs.
4. Project preparation. There is a need for project preparation in cities, to have better projects and a ready-to-go pipeline. This is also an opportunity for various organisations.