Barriers and solutions to climate investment for cities

What are the main obstacles for financing urban mitigation projects and how can these be overcome? 

A new Low Carbon City Lab (LoCaL) White Paper by CDP identifies these main barriers and offers new insights into the solutions, making an important step in linking cities with investors.

Extensive research has been carried out among city representatives, investors and other stakeholders, providing a detailed outline on improving access to climate finance for cities and offering bankable climate projects to investors.

Key findings include:

• The huge potential that cities have when it comes to market their climate mitigation–projects due to an increasing interest from the private sector in financing climate investments
• The four main barriers with regard to a shortage of bankable projects: capabilities gap, a perceived lack of mandate from the electorate, a lack of public and private cooperation and transaction costs calling for projects pooling and a lack of track record or low credit worthiness.

This paper highlights further the need for establishing a match-making facility for investors and cities as a solution to make capital available for cities, enable flexible financing, reduce costs and support reporting and marketing of projects. The development of this matchmaking platform is currently being supported by the Climate-KIC as part of LoCaL’s activities.

The White Paper

Access the White Paper HERE

Find out more about LoCaL

The main aim of the Climate-KIC flagship programme LoCaL is to reduce 1 Gt of CO2 and mobilize €25 billion of climate finance for cities annually by 2050. It is an innovation platform aiming to provide cities with better tools for assessing greenhouse gas emissions, planning, investing and evaluating progress. Started in 2015, LoCaL is a growing community of more than 20 organisations dedicated to unlocking climate finance for cities. This paper was realized as part of the project Climate Financier under LoCaL and conducted by CDP.

Contact

victor.gancel@climate-kic.org