Financing climate change adaptation: Options for

Report
Financing climate change
adaptation: Options for Asian
cities and the role of thirdparty brokers
Presented by
Verena Streitferdt
([email protected])
CDIA consultant
For the Session G3 at Resilient Cities 2012
Financing 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
CDIA Rationale
Bridging the urban infrastructure
investment planning and programming gap
 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)
IMPLEMENTATION
STATUS, March 2012
- 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
Initiation
Mayor Bongat send an application letter to CDIA
Objective:
Integrated Naga River Revitalization Project
1. Urban Renewal (River walk)
2. Wastewater Management, Drainage
3. Flood Protection/Climate Change Adaptation
Method
5 months consultancy work and coordination with
local governments
Duration
Aug – Dec 2011
Outcome
Pre-Feasibility studies presented in March 2012
Studies on financing local climate action
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
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)
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)
-
 Market launch very dependent on enabling investment frameworks (e.g.
guarantees for investment etc.)
 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
 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 resources
Engage 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!
THANK YOU!
Cities Development Initiative for Asia
Suites 202-203, Hanston Building
Emerald Avenue, Ortigas Center, Pasig City 1600
Metro Manila, Philippines
www.cdia.asia

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