Banking on cities: How to boost private investment in green urban infrastructure?
There is a strong case for financing climate action in cities, with the potential to create 87 million jobs by 2030 and a global economic dividend of USD 24 trillion. However, as highlighted in the 2021 State of Cities Climate Finance report published by the Cities Climate Finance Leadership Alliance, climate finance flows for cities amounted to USD 384 billion according to the most recent estimates, far short of urban climate finance needs, estimated in the trillions.
Securing funds to urban climate projects is crucial to achieving the Paris Agreement [and respective Nationally Determined Contributions (NDCs)] and the Sustainable Development Goals (SDGs). Today, private finance in urban climate projects represents only a small fraction of total investments, despite the growing evidence that private funds are available and commercial institutions are willing to commit. One of the main barriers preventing private investment in urban climate infrastructure projects is the shortage of bankable projects attractive to the private sector.
Initiated by the German Federal Government at the UN Secretary General’s Climate Action Summit in 2019, and hosted by the Cities Climate Finance Leadership Alliance, the Leadership for Urban Climate Investment (LUCI) is a framework to promote collaboration between initiatives aiming to close the urban climate finance gap and track their contribution toward green and climate-resilient cities. The LUCI framework is structured around four targets reflecting the value chain for urban climate finance, including capacity building, project preparation, and linking to finance.
This event, held during the New York Climate Week, will bring major private institutions, city officials, and LUCI initiatives together to discuss how project preparations can help increase private investment in urban climate projects.