The City Finance Lab (CFL), a joint venture between sustainability solutions provider South Pole and Climate-KIC's Low Carbon City Lab (LoCaL), has selected the first round of winning proposals for innovative financing solutions targeting climate action projects in cities.
In the first half of 2018, the CFL conducted its first pilot, supporting the City of Bologna to develop their municipal carbon market, channelling private finance from industries in the region into municipal climate mitigation and adaptation projects.
"Considering that cities generate 70% of global emissions and only receive 15% of global climate finance, being able to better match financing solutions and cities will help accelerate the move towards climate-resilient urban centres," says Hans-Peter Egler, Director Public Affairs, South Pole.
Following a first public call for proposals on 14 June, the Committee of the CFL - a council of municipal finance experts from the European Bank for Reconstruction and Development (EBRD), Agence France Locale, Atkins, Climate Resilience Consulting and Climate-KIC - have chosen five solutions that will receive tailored technical advisory until the end of the year. The objective of this support is to implement and scale the final solutions in 2019. The innovative financing solutions cover a variety of climate action themes:
“Municipal finance differs substantially from sovereign finance and commercial finance. Not only in terms of creditworthiness, scale, and citizen relationships but also the regulatory and political environment. This is why it was so important for us to select financing solutions that are tailored to meet the distinct needs of cities," says Sean Lockie, Director of Urban Transition, Climate-KIC and CFL Committee Member.
In 2019, the CFL will share lessons learned from the supported initiatives through detailed “blueprints" that will be made publicly available to encourage the replication of the piloted solutions. The CFL will also engage in targeted capacity building activities to give cities the tools to implement such solutions. The long-term goal of the CFL is to expand its activities beyond the European continent to cities in other regions such as Latin America, Asia and Africa where the access to finance for cities remains an even greater challenge.