Urban Development

The World Bank’s work in urban development aims to build sustainable cities and communities through an urbanization process that is inclusive, resilient and low carbon, productive, and livable, contributing to the Sustainable Development Goal (SDG) No.11, implementation of the New Urban Agenda, as well as the World Bank’s goals to end extreme poverty and boost shared prosperity.

Specifically, the Bank invests directly in urban infrastructure and helps national and municipal governments build fiscal and financial systems to expand revenues and provide enhanced access to private capital to finance investment needs sustainably.

The World Bank invests an average of $6 billion in urban development and resilience projects every year. The Bank’s annual disaster risk management financing across the entire portfolio increased from $3.7 billion from fiscal year (FY) 2012 to $4.5 billion in FY 2019. Through a combination of investment project financing, policy development loans, and Program-for-Results funding, the Bank aims to help cities meet the critical demands of urbanization.

The World Bank’s Urban Development strategy focuses on three priorities that are essential for successfully implementing SDG 11 and the New Urban Agenda:

• Financing the New Urban Agenda

The global investment needed for urban infrastructure is $4.5-5.4 trillion per year. Most of this need lies in the developing world, and only a small fraction of this urban infrastructure can be supplied by aid. In this context, the World Bank’s strategy is guided by the goal of helping cities expand access to finance from multiple sources, including private and commercial finance.

• Promoting territorial development

A second key element for SDG11 is to promote territorial development in developing countries and cities. Economic activities are concentrated in only a few places – only 1.5% of the world’s land is home to half of its production. This concentration is inevitable, and it is also desirable. The evidence suggests that prosperous and peaceful countries have been successful by bringing people and businesses closer to each other in cities, harnessing agglomeration economies to boost productivity, job creation, and economic growth.

The World Bank’s work on territorial development looks at cities not only as individual entities, but also at the connectivity between them that allows faster economic growth and links people to better jobs.

• Enhancing urban resilience to climate change and disaster risks

The third key element for reaching SDG11 is to build resilience to disasters and climate change. Today, 90% of urban expansion takes place in developing countries, and much of it occurs near natural hazards, rivers, and coastlines, and through informal and unplanned settlements. Lack of adequate infrastructure, land use planning, and building codes exacerbates the risks to which urban dwellers are exposed.

Poorer segments of the population are particularly vulnerable, since they tend to live in more hazardous settlements and lack the necessary safety nets to recover from economic or environmental shocks. Preparing cities for disaster and climate risks and strengthening urban resilience are thus critical to all development and poverty reduction efforts.

ENGAGEMENT SUMMARY

The three priorities are translated into six business lines:

• Cities and economic growth
• Urban poverty and inclusion
• Municipal infrastructure and services
• Affordable housing and land
• Urban management, finance, and governance
• Cities and urban environment

Last Updated: Sep 25,2019

Research and analytical services

Understanding urbanization: The World Bank is conducting research on urban spatial development, housing, and urban environment, focusing on regional, as well as country specific Urbanization Reviews that aim to support national and city-level policymakers in thinking strategically about the opportunities – and addressing the challenges – of urbanization.

Other recent analytical work and tools to help cities manage urbanization and support sustainable, inclusive growth include: 

• Africa’s Cities: Opening Doors to the World and Greening Africa’s Cities
• Cities in Eastern Europe and Central Asia: A Story of Urban Growth and Decline
• Cities of Refuge in the Middle East: Bringing an Urban Lens to the Forced Displacement Challenge
• Competitive Cities for Jobs and Growth: What, Who, and How
• East Asia and Pacific Cities: Expanding Opportunities for the Urban Poor
• East Asia's Changing Urban Landscape: Measuring a Decade of Spatial Growth
• Investing in Urban Resilience: Protecting and Promoting Development in a Changing World
• Leveraging Urbanization in South Asia: Managing Spatial Transformation for Prosperity and Livability
• Raising the Bar for Productive Cities in Latin America and the Caribbean
• Rethinking Lagging Regions: Using Cohesion Policy to Deliver on the Potential of Europe’s Regions
• Urban Regeneration: Decision Tool for City Planners
• What a Waste 2.0: A Global Snapshot of Solid Waste Management to 2050

Financing the New Urban Agenda

The World Bank helps cities and national governments put in place the financial framework to attract investment and grow in a sustainable manner. The Bank is helping countries establish and strengthen urban institutions to deliver improved infrastructure and services, for example:

• In Sub-Saharan Africa, the World Bank has an operational portfolio of almost $1.1 billion in urban projects focusing on improving financial and institutional performance and strengthening decentralization in Ethiopia, Kenya, Senegal, Tanzania, and Uganda.
• In Morocco, a $200 million World Bank loan aims to improve the city of Casablanca’s investment capacity by improving its revenue management systems and attracting private investment to municipal infrastructure and services through public-private partnerships.

Innovative ways of leveraging investment are also needed, including from private and non-traditional sources, such as land value capture, sometimes in combination with multilateral development banks (MDBs) and other agencies; by reforming intergovernmental fiscal transfers; and strengthening municipal finances.

• Through the capital raising strategy of its City Resilience Program (CRP), the World Bank is pushing the boundaries in this area with its Capital Mobilization Strategy, which works with city leaders to consider the Bank a catalyst to development financial solutions beyond World Bank loans. To do so, the program connects cities to co-financing by donors and other international financial institutions (IFIs). The program also supports cities in combining public investment with private opportunities through private sector engagement, where feasible .
• The Resilient City Development Program (RECIDE), a partnership of the Spanish Agency for International Development Cooperation (AECID) and the World Bank, is empowering cities in Sub-Saharan Africa to strengthen resilience, and to access a broader range of financing options. RECIDE has been granted approval to access resources from the EU External Investment Plan of up to EUR 100 million in guarantees and EUR 14 million in technical assistance to source, originate, and execute transactions.
• The City Creditworthiness Initiative (CCI) aims to strengthen the financial performance of local governments and prepare them to tap domestic / regional capital markets without a sovereign guarantee. The initiative has trained over 630 municipal officials from 250 cities in 26 countries. 

Promoting territorial development

• The World Bank’s report, East Asia and Pacific Cities: Expanding Opportunities for the Urban Poor, encourages cities in the region to ensure inclusive, equitable urban growth through a multi-dimensional approach to planning, incorporating aspects of economic, spatial, and social inclusion to foster economic growth and reduce poverty.
• Another report, Raising the Bar for Productive Cities in Latin America and the Caribbean, provides a rigorous analysis of the key factors constraining the productivity performance of cities in the region and provides evidence to show how planning, investments and policy reforms to promote a more connected, and, therefore, integrated, urban system can foster economic growth and inclusion.
• A new report, Which Way to Livable and Productive Cities? A Road Map for Sub-Saharan Africa, brings together a large body of analytic work to show that urban livability and prosperity cannot be pursued effectively without distinguishing priorities for larger cities from smaller towns. Lack of institutional capacity in the smaller towns across Africa may require a slower transition of responsibilities for planning and investment management, as well as enhanced technical assistance so that institutions can perform their tasks.
• In Kenya, northern areas of the country have mostly been excluded from the benefits of rising living standards. The World Bank is launching the North & Northeastern Development Initiative (NEDI), a multi-sectoral program with projects in transport, water, energy, agriculture, livelihoods, and social protection to help connect the region to national and global markets.

Enhancing urban resilience to climate change and disaster risks

In recent years, the World Bank has worked in cities and towns across over 140 countries, investing $4.5 billion during FY19 in disaster risk management.

• In Mozambique, the Mozambique Cities and Climate Change Project, funded by $120 million IDA credit, includes a stormwater drainage system whose 11 kilometers of canals and flood control systems to prevent the city from flooding, strengthening the city’s resilience to weather-related hazards. Soon after the Idai and Kenneth cyclones hit that affected millions of people, the port of Beira was back in operation and the city cleaned up, partly thanks to this project. The project also includes solar-powered street lighting, which at one point was the only source of light in the city.  To help the cyclone recovery, the World Bank announced nearly $700 million in support for Mozambique, along with Malawi and Zimbabwe. Mozambique received a commitment of $350 million from the IDA Crisis Response Window to re-establish the water supply and rebuild damaged public infrastructure and crops. The financing supports disease prevention, food security, social protection, and early-warning systems in the impacted communities.

The World Bank has also facilitated global partnerships, including with the Agence Française de Développement (AFD) and the Asian Infrastructure Investment Bank (AIIB), to support countries in their urban resilience work.

• Through the CRP, supported by the Global Facility for Disaster Reduction and Recovery (GFDRR), the Swiss Economic Secretariat, and other partners, the World Bank is helping cities around the world raise the finance they need to build resilience to climate change and disaster risks, connect investors with bankable projects, and keep millions of people safer and stronger. The objective of the CRP is to support cities in embedding resilience into investment projects and mobilizing capital beyond World Bank loans. To do so, the program offers support in the planning process and capital mobilization. To support planning, the program engages with the tech community delivering digital tech solutions to better understand the built and natural environment. To support finance, the program engages with an ecosystem of donors, IFIs, and financial advisors to crowd in the necessary market to deliver finance to cities.
• Urban resilience goes hand-in-hand with environmental sustainability. The World Bank’s Global Platform for Sustainable Cities (GPSC) is a partnership and knowledge platform that includes 28 cities across 11 countries that have received $151 million from the Global Environment Facility.
  • This support has leveraged $2.4 billion in project co-financing. The platform promotes integrated solutions and cutting-edge knowledge for cities seeking to improve their resilience and overall urban sustainability in the areas of indicators and tools, integrated urban planning and management, and municipal finance.
  • One example of GPSC providing solutions and knowledge to cities is the Urban Sustainability Framework. This guidance document developed by GPSC includes the Measuring Frame work that incorporates 177 indicators into a clearly laid out process for cities to track their urban sustainability. The most important 14 “core” indicators are associated with SDG 11.
  • By using these core indicators, GPSC helps establish comprehensive multicity data sets tied to each indicator and this in turn helps: track international progress toward SDG 11, allows cities to compare their performance with their peers, and overall enhances knowledge sharing between cities. GPSC is currently utilizing the SDG 11 core indicators to roll-out a benchmarking assessment for more than 30 cities worldwide.

More project results

In Belize, the Bank supported the national government in developing and implementing the National Climate Resilient Investment Plan (NCRIP) through the Climate Resilient Infrastructure Project, which helped position the country to leverage additional climate financing from international financing institutions. In the Eastern Caribbean countries, the Bank has mobilized over $200 million for enhancing climate resilience and strategically reducing their vulnerability to climate change and disasters caused by natural hazards, including $83 million from the Strategic Climate Fund, and immediately following disasters (e.g., Saint Lucia Disaster Vulnerability Reduction Project).

In Colombia, the national government has put forward a series of institutional and policy changes to promote the peace building process. With the support of the World Bank, these efforts focus on strengthening institutions for land management and territorial planning, as well as improving subnational financial management and investment prioritization.

In Georgia, the Regional Development Project assists the country’s regions in improving their infrastructure in order to capitalize on a growing tourism market; thus assisting in improving their local competitiveness and economic development. In Azerbaijan, World Bank loans supported the rehabilitation of the main landfill site and establishment of a state-owned waste management company, increasing the population served by the formal solid waste management to 74% in 2012. Support also led to further sustainable waste management practices, helping achieve a 25% recycling and reuse rate.

In Indonesia, the Indonesia National Slum Upgrading Program, which includes substantial additional finance through co-financing from the Asian Infrastructure Investment Bank (AIIB), is improving access to urban infrastructure and services in targeted slums. In Argentina, the Metropolitan Buenos Aires Urban Transformation Project is supporting the improvement of living conditions for around 48,000 residents in disadvantaged neighborhoods in the Buenos Aires Metropolitan Area.

In Jordan and Lebanon, two related projects are supporting local authorities and communities hosting Syrian refugees, and include strong consultation and feedback mechanisms. The Jordan project to address the urgently needed rehabilitation of municipal infrastructure has benefitted about two million people, including 250,000 Syrian refugees. In Lebanon, interventions to release tensions reached 250,000 people within a year – three times the initial target – particularly those in the host communities close to refugee camps, and also improved service delivery to more than one million Lebanese people. 

In Pakistan, the World Bank is helping the five largest cities in the province of Punjab improve their systems for planning, resource management, and accountability through a $150 million results-based financing. The city governments are developing and implementing medium-term, integrated development and asset management plans with evidence-based prioritization for municipal infrastructure and services, resulting in increased revenue collection and reduced expenditures, providing financial headroom. Automated systems for public access to information and grievance redressal, as well as updated websites with information on budgets and procurements, are ensuring greater accountability.

In rapidly urbanizing Vietnam, the Vietnam Urban Upgrading Project – with $382 million financing from the World Bank – improved the lives of 7.5 million urban poor with better water and sewage connections, as well as improved roads, sewers, lakes, canals, and bridges.

Last Updated: Sep 25,2019