Low Carbon Livable Cities Initiative gains momentum from UN Climate Summit

September 23, 2014


Cities such as Seoul are taking the initiative to invest in low-carbon livable urban growth.

Chisako Fukuda / World Bank

Story Highlights
  • Cities need to tackle the dual challenge of rapid urbanization and climate change – and more than $1 trillion will be needed to bridge the infrastructure gap for climate-smart urban growth
  • In one year, the Low Carbon Livable Cities Initiative’s City Creditworthiness Academy has reached 66 cities in 22 countries, helping to improve financial management practices to increase access to capital
  • The Cities Climate Finance Leadership Alliance, launched today at the UN Climate Summit, brings together 21 partners to expand these and other efforts to accelerate investment

September 23 - One year after launch, the World Bank Group’s Low Carbon Livable Cities Initiative (LC2) is moving ahead to help cities plan and finance sustainable urban growth. The Cities Climate Finance Leadership Alliance and other partnerships announced today at the United Nations Climate Summit will enable the Bank to collaborate more closely with partners and expand these efforts to accelerate investment in climate-smart infrastructure.  

The Low Carbon Livable Cities Initiative is one way we are helping cities improve climate-smart planning and financial management practices, so they can access the capital they need for urban infrastructure investments,” said Ede Ijjasz-Vasquez, Senior Director, World Bank Group Global Practice for Social, Urban, Rural and Resilience. “The new Alliance and other partnerships will enable us to increase impact, reaching more cities as they work to manage the dual challenge of rapid urbanization and climate change.”

Estimates say that over $1 trillion a year is required to finance infrastructure needs in developing countries over what is being built – even more for low-carbon infrastructure. The need is vast and urgent, but currently, investments are hindered by a lack of critical information, institutional and regulatory constraints, inadequate levels of municipal creditworthiness, and the scarcity of projects with business plans to attract potential investors.

The new Alliance brings together 23 global partners from development agencies, city networks, financial institutions, private sector investors and CSOs including the Bank, UN Habitat, US government, Citibank, Standard & Poor’s Ratings Services, Development Bank of Latin America (CAF), Japan Investment Cooperation Agency (JICA), and others, to close the investment gap in urban areas over the next 15 years.

Partners will leverage the Alliance to expand the scale and scope of individual efforts and remove obstacles to ensure additional capital flows to cities – particularly from the private sector. To create an environment that encourages private sector investment, the Alliance will explore opportunities through policy and regulatory reforms to create incentives to plan, design, and invest in secure, cost-effective and profitable projects in low-carbon and climate-resilient infrastructure.

“The Alliance brings the value of collective action to attract investment. The idea is to get the conversation going and connect the full range of actors that need to be involved, sharing knowledge so successful examples can be replicated,” said Stephen Hammer, World Bank lead specialist for cities and climate change. “Assessing the challenges that cities and financial institutions face to mobilize investments, and working with the private sector as well as national and international public financial institutions to scale-up financial products are some of the activities that we need to take on together.”

" The Low Carbon Livable Cities Initiative is one way we are helping cities improve climate-smart planning and financial management practices, so they can access the capital they need for urban infrastructure investments. "

Ede Ijjasz-Vasquez

Senior Director, World Bank Group Global Practice for Social, Urban, Rural and Resilience

A partnership to enhance creditworthiness in 300 cities

A city creditworthiness partnership also announced today at the UN between the World Bank, Bloomberg Philanthropies and C40 (Cities Climate Leadership Group) will help 300 cities enhance their creditworthiness and develop more attractive opportunities for investors. The partnership builds on efforts led by the Bank through its LC2 Initiative, which has delivered City Creditworthiness Academies to 66 cities in 22 countries since its inception last October.

The Bank’s Academies provide training and follow-up technical assistance to improve municipal financial management and build climate-smart capital investment planning capacity. Through the new partnership, partners will provide transaction support and conduct feasibility studies for project development where there are opportunities for investment aligned with a city’s climate goals.

Robert KyuKyu, of Kampala, Uganda, who participated in the latest Academy held in Arusha, Tanzania last month, says the program is something growing African cities need. “Preparing capital investment plans, and addressing issues of resilience in our municipalities as a credential for proper creditworthiness to enable other private partners and investors to come and invest in our cities – these are really key issues that we should be addressing and taking on as a municipality.”

Local government participants of the Academies are already working to enhance creditworthiness by improving their financial management practices.  Officials from Ulaanbaatar, who participated in the Seoul workshop held in April, are preparing for a municipal debt management system based on a self-assessment and action plan developed through the Academy. 

After undertaking a series of revenue management reforms, Kampala has increased its own-source revenue levels by 86% in one year. Because their borrowing cap is limited to 10% of their own-source revenues, they’ve effectively doubled their ability to borrow. 

Cities Climate Finance Leadership Alliance Partners
(as of September 2014)

African Development Bank, Bank of America Merill Lynch, Bloomberg Philanthropies, C40 – Cities for Climate Action, Citibank, Cities Development Initiative for Asia (CDIA), Climate Bonds Initiative, Development Bank of Latin America (CAF), European Investment Bank, French Agency for Development (AFD),  Global Infrastructure Basel (GIB), Gold Standard Foundation, ICLEI – Local Governments for Sustainability, Japan Investment Cooperation Agency (JICA), Meridiam, Standard & Poor’s Ratings Services, UN-Habitat, The United States, West African Development Bank (BOAD), World Resources Institute, World Bank Group, WWF.