Navigating Climate Finance for Sustainable Urban Projects in South Asian Cities

Securing adequate financing is often vital for sustainable and resilient urban development projects. Addressing this crucial topic, the Global Covenant of Mayors for Climate and Energy (GCoM) South Asia convened a webinar on ‘Mobilising Climate Finance for Cities – Unveiling Strategies for Navigating from Concept to Financing’ on 19 March, 2024, with support from the European Union Delegation to India (EUD), the GCoM India Coordinator, and the GCoM South Asia Networking and Governance Coordinator.

The webinar aimed to equip a diverse group of stakeholders — municipal engineers, administrative officials, local government representatives, NGOs, civil society members, and academicians — from GCoM South Asian cities with the capacity and knowledge needed to develop quality applications and expressions of interest (EoIs) for accessing climate finance.

Experts shared insights on project preparation and financing platforms available globally to strengthen the development and implementation of climate-resilient infrastructure projects. Central to the discussion was an exploration of the support ecosystem fostered by the GCoM alliance, amplifying cities’ climate initiatives, and facilitating access to climate finance.

Role of GCoM in Supporting Cities

The webinar was structured to offer an understanding of climate finance mechanisms and strategies useful for cities in the South Asia region. On behalf of the GCoM South Asia Technical Coordinator, Mr. Keshav Jha highlighted the work being undertaken by GCoM in supporting cities for climate action planning and accessing finance in his opening remarks. Following this, Mr. Abhishek Pandey, representative from the GCoM South Asia Networking and Governance Coordinator, spoke about the GCoM Regional Business Matchmaking workshop held in December 2023 in Kathmandu, Nepal, in which representatives from 25 cities met technology providers from Europe to discuss solutions to various climate challenges.

The webinar simplified some of the complex aspects of climate finance, project planning and developing strategies needed for effective climate reporting. The 241 GCoM signatory cities in the Asia region represent around 49% of the average GHG reduction targets globally. To reach their net-zero goals, it is crucial for these cities to access private capital and public funding. This will also help leverage innovation and technology while mobilising climate finance. 

Mr. Pablo Gandara, Team Leader of GCoM Asia Project, provided insights into GCoM initiatives supporting cities in accessing technical assistance through platforms such as the Climate City Gap Fund and the Transformative Actions Program (TAP). 

Ms. Asma Jhina, Senior Advisor for Urban Climate Finance and Inclusive Action at GCoM, also shared the context of cities’ contribution to global energy consumption and GHG emissions, and how financing plays a major role in converting targets and plans into impacts, mitigation, and adaptation actions.

Empowering Cities with Technology and Finance for Climate Action

The South Asian signatories cities of GCoM are ready to lead significant changes with the help of technology. Ms. Johanna Mansson-Delerce, Policy Officer, EUD, spoke about how innovation can greatly increase the effectiveness of climate finance, especially in Indian cities. She mentioned the European Union’s support for climate projects such as GCoM and CITIIS2.0, which nurture evidence-based climate planning and action across cities.

In a similar context, the key findings from the ‘State of City Climate Finance’ report and recommendations for cities were highlighted by Mr. Alastair Mayes, Programme Associate at Cities Climate Finance Leadership Alliance (CCFLA). Some of the recommendations included embedding climate considerations at all levels of city planning, strengthening municipal finance capacities, leveraging own sources of revenue to incentivise investment, and working closely with city networks and project preparation facilities to develop bankable projects. 

Meanwhile, Ms. Christine Zhou, Executive Director of Bankers without Boundaries, shared her views that along with city climate action plans, there is a need for city investment plans to transition from a grant-funding model to a private-financing mindset. She also shared two examples of such project financing from Europe — the Latvian Baltic Energy Efficiency Facility (LABEEF) that takes financing risk away from Energy Service Companies (ESCOs), and the Wyre Natural Flood Management Project, which used a blend of public and private finance to implement nature-based flood management solutions. 

Enhancing City Proposals for Climate Finance

The City Climate Finance Gap Fund (the Gap Fund) aims to help cities understand their exposure to climate challenges, develop plans and strategies to reduce emissions and vulnerability to climate risks, and identify and prioritise climate-smart urban infrastructure investments. It is co-implemented by the World Bank and European Investment Bank in partnership with the Deutsche Gesellschaft für Internationale Zusammenarbeit. GCoM and ICLEI are among global partners for the Gap Fund mobilising applications on sustainable infrastructure investment projects.  

The objective of the Gap Fund is to support the early stages of project preparation, when cities often lack the resources and capacity needed to transform ideas into tangible projects. The speakers highlighted the need for substantiating the climate challenges, their impacts on the population, past climate trends, the scope of the project, and the project benefits. A concise format for submitting Expressions of Interest to the Gap Fund was also discussed with the participants during the webinar.

Emphasising this importance of technical assistance and specificity in a sustainable infrastructure project design, Ms. Jazlyn Lee and Mr. Marvin Lagonera, Regional Focal Point and City Advisor, respectively, for The City Climate Gap Fund of GCoM, offered insights into project preparation and key learnings from the fund. The City Gap Fund provides technical assistance to cities during project preparation to bridge the gap between project ideation and implementation. 

The webinar concluded with an engaging Q&A session, where participants shared their experiences and difficulties with accessing climate finance, needs for their cities’, and the support from GCoM and its partners. Mr. Ashish Verma, GCoM India Coordinator, in his closing remarks, captured the key takeaways, and reaffirmed GCoM South Asia commitment to support cities in their journey towards resilience and sustainability.

The webinar provided GCoM South Asian cities with information to leverage private capital and public funding, and to access technology to maximise the impact of climate finance. 

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