A new fund that aims to help pave the way for low carbon and resilient cities in developing and emerging economies by unlocking infrastructure investment at scale has been launched.
The City Climate Finance Gap Fund, with a target capitalisation of at least €100 million (£91.7m), has been launched by ministers and directors of the Governments of Germany and Luxembourg together with the World Bank, European Investment Bank (EIB) and the Global Covenant of Mayors.
The Gap Fund offers technical and advisory services to assist local leaders in prioritising and preparing climate-smart investments and programmes at an early stage, with the goal of accelerating preparation, enhancing quality and ensuring they are bankable.
It aims to unlock at least €4 billion (£3.7bn) of final investment in climate-smart projects and urban climate innovation.
Cities are on the frontlines of the climate emergency and currently account for around 70% of global CO2 emissions and urban centres’ share of emissions is expected to grow as 2.5 billion people migrate from rural to urban areas by 2050.
Before the COVID-19 pandemic struck, it was estimated more than $93 trillion (£73tn) in sustainable infrastructure investment was needed by 2030 to meet climate goals.
EIB President Werner Hoyer said: “There can be no return to business as usual. Our recovery from the COVID-19 crisis must be the opportunity to rebuild better, in particular with respect to the climate and environment. We must also ensure that this recovery leaves no one behind, supporting livelihoods and communities.
“The Gap Fund will help cities in developing countries to implement their transformative climate projects. This is a tangible example of how the EIB’s partnership with governments, local authorities and the World Bank can support the global shift towards a climate-neutral economy and the achievement of the Sustainable Development Goals. The Gap Fund will play an important role in this endeavour and I encourage cities to share their ideas and apply for support.”