New Perspectives on Results-Based Blended Finance for Cities
There is clear evidence on the need for cities to rapidly scale-up their investments in climate change mitigation programs and build strong foundations for climate-resilient communities. Investing in low carbon infrastructure and climate resilience...
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| Format: | Report |
| Language: | English |
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World Bank, Washington, DC
2019
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| Online Access: | http://documents.worldbank.org/curated/en/917181563805476705/Innovative-Finance-Solutions-for-Climate-Smart-Infrastructure-New-Perspectives-on-Results-Based-Blended-Finance-for-Cities http://hdl.handle.net/10986/32192 |
| Summary: | There is clear evidence on the need for
cities to rapidly scale-up their investments in climate
change mitigation programs and build strong foundations for
climate-resilient communities. Investing in low carbon
infrastructure and climate resilience can generate
competitive returns and is crucial for preventing a reversal
of the development gains made in low-income countries up
until now. Overcoming the barriers in financing
climate-smart infrastructure in cities means adjusting their
currently unattractive and inadequate risk-return investment
profile. Our analysis explains that well-targeted
concessional funding can derisk the financing structure of a
project and turn a typical non-bankable project to financial
viable one. Additionally, it makes the case for
results-based blended finance approaches that strengthen the
accountability in project development by linking financing
to the achievement of measurable, pre-agreed results.
Addressing the lack of creditworthiness, the limited
accountability and capacity in institutions and service
delivery practices should be at the center of urban
investment strategies. The report highlights the need for
technical assistance and capacity building programs that
will support cities bring order to their financing and
accounting practices, support shadow credit ratings and help
them become creditworthy. It is estimated that only 20
percent of the 500 largest cities in developing countries
are considered creditworthy. Cities and development partners
face a common challenge: Making the most effective use of
available public finance instruments and disburse scarce
public (concessional) funds in a way that maximally
leverages private sector co-investments. |
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