Post on 23-Dec-2015
Financing climate change adaptation: Options for Asian
cities and the role of third-party brokers
Presented by
Verena Streitferdt (verena.streitferdt@uts.edu.au)
CDIA consultant
For the Session G3 at Resilient Cities 2012Financing the Resilient City: Public grants and
Market-based instruments
Statements regarding climate financing
Mexico City’s Mayor Marcelo Ebrard underlines: “The architecture that is available now is not working, why, because it is not designed to help the cities; it is designed to work with the national governments.”
Andrew Steer, the World Bank’s Special Envoy for Climate Change, says: “We have got to be more imaginative in our environmental financing, managing to make things more comfortable for investors, and maximizing returns”.
Outline
Cities development Initiative Asia Background
CDIA case study
CDIA/PAKLIM study on cities and climate finance
Tips for cities who seek financing for climate change measures
Asia’s Urban Challenge
Asia’s economic growth is predominantly urban based
The estimated urban environmental infrastructure investment need in the Asia-Pacific region is about $100 billion per year
Current urban environmental infrastructure investment is about $ 40 billion per year
=> Investment gap
Bridging the urban infrastructure investment planning and programming gap
CDIA Rationale
Cities often have macro-development strategies and spatial plans, but city infrastructure projects to implement them are often not adequately defined and prepared for financing
Particular issue for the 1,400+ medium-sized cities in Asia’s developing countries with populations of 250,000 to 5,000,000
Difficult to use standard feasibility study instruments for these purposes, need for additional instruments Cities Development Initiative for Asia
?
CDIA City Interventions (ongoing, completed)
I M P L E M E N T A T I O N S T A T U S , M a r c h 2 0 1 2
- 42 APPROVED CITY APPLICATIONS IN 13 COUNTRIES (67 PFS)
- SUPPORT COMPLETED IN 21 CITIES INCLUDING 33 PFS
- ONGOING SUPPORT IN 21 CITIES (34 PFS)
City example
Naga, Philippines
InitiationMayor Bongat send an application letter to CDIAObjective: Integrated Naga River Revitalization Project 1. Urban Renewal (River walk)2. Wastewater Management, Drainage 3. Flood Protection/Climate Change Adaptation
Method5 months consultancy work and coordination with local governments
DurationAug – Dec 2011OutcomePre-Feasibility studies presented in March 2012
Cooperation:Cities Development Initiative in Asia (CDIA) and GIZ project: Policy Advise for Environment and Climate Change (PAKLIM) Support
Objective: To identify the financing possibilities to support the cities to implement respective climate change mitigation and adaptation activities
Approach:
National study in Indonesia
Regional Study in the Asia Pacific
Studies on financing local climate action
Results – international
Only 2 out of 14 international funds are accessible to cities
Emerging climate financing- Green Climate Fund - Carbon markets and Green bonds- National appropriate
mitigation actions (NAMAs)
- National appropriate adaptation actions (NAPAs)
Þ Limited opportunities for direct finance access to cities
Results – Private Capital
Investment in public goods and infrastructure- Public Private Partnership (PPP)
Market Launch and diffusion of goods and companies on the supply side- Development partnerships- Carbon market financing (only mitigation)
Þ Market launch very dependent on enabling investment frameworks (e.g. guarantees for investment etc.)
Þ Investment package might attract private financing (e.g. Bus terminal in Banda Aceh)
Results – government
Limitations of Local (city) finance National finance in form of programmes
(e.g. Indonesia: Special allocation fund for drinkable water)
Tax and levies Loans and municipal bonds
Þ Main opportunity for cities investment seem to come from national government programmes.
Advice for cities seeking climate finance
Prepare proposals (Vulnerability assessment and prioritisation)
Access to Private capital: Improve credit worthiness and leverage their existing assets and financial resourcesEngage in Public/private partner cooperations
Engage with NGOs and national and international technical assistance agencies - bilateral: CDIA, GIZ etc.
- multilateral: UNDP, UNHABITAT
Start with small projects now to create visibility!