On the 3rd of May, the Matchmaker project organised its first workshop facilitating a discussion between city representatives and investors on how to connect urban mitigation projects with climate finance. The workshop was hosted by the WRI Ross Center for Sustainable Cities in Washington DC on the sidelines of the Climate Action Summit 2016.
The Matchmaker project is a Low Carbon City Lab (LoCaL) initiative, of which South Pole Group is a founding partner and is led by CDP and ICLEI, with support from Gold Standard. It brings together cities and investors to explore barriers and solutions to the financing of low-carbon city projects.
South Pole Group, represented by Ingo Puhl, Director Strategy, presented core metrics as a means to create a shared language to facilitate a "quantified" description of low carbon projects for assessment by investors:
"Infrastructure under the control of cities is responsible for 70% of global GHG emissions but only 4% of cities have direct access to the capital that needs to be invested to transition into the low carbon economy. Our objective is to increase this access."
Four city representatives from Belo Horizonte, Recife, Medellin and Santa Monica presented on their plans to reduce emissions in their cities via concrete projects. These included bus rapid transit, building efficiency and bike sharing master plans. These presentations facilitated a discussion among both public sector investors, including the World Bank Group, IADB, AFD and GEF and two private sector investors from the Closed Loop Fund and Global Environment Fund, on how a matchmaking service could help them find these kind of projects and make them attractive to financiers by various funding mechanisms.
The discussion illustrated the function of the matchmaking service not only to connect city representatives and investors, but also as a facilitator to help cities prioritize concrete climate action projects that can be marketed to capital providers. Indicators for ensuring quality in terms of financial feasibility and sustainable development were discussed in detail by all parties. Cities highlighted the difficulty of finding finance for smaller projects below 20 mln USD and aligning several departments within their city, including finance and sustainability experts, to this same goal. Investors on the other hand highlighted creditworthiness barriers and the crucial role for development banks to function as leverage private finance via guarantees and de-risking facilities.