Lessons from leaders and experts: How local governments can access climate finance
Two key resources will help cities access climate finance by providing information about different financing concepts and projects and sharing success stories from cities.
Cities have repeatedly called for support on how they can best prepare projects, and the different finance models available to support their implementation. This is why one session during CoM SSA Day event at LoCS4Africa specifically responded to this call. The session not only provided a platform for funders and partners to share insight on project financing, but also served as the launch of the CoM SSA Financing Roadmaps for Climate Projects study, which was specifically developed to accelerate climate project implementation in sub-Saharan African cities. This key resource will assist in expanding the initiative’s focus to unlock climate finance at the local level.
“Finance Roadmaps for Climate Projects: How can Local Governments in Sub-Saharan Africa facilitate access to finance?” provides an overview of financing roadmaps for local governments with an introduction to key concepts and roadmaps for different project types. Concrete roadmaps highlighting the possible proactive roles of local governments are defined for 10 specific climate actions, covering each stage of the project lifecycle from project identification to project development, finance, and operation.
“The CoM SSA Finance Roadmaps outlines actions and the stages of the project life cycle for 10 different types of projects and their benefits in terms of service delivery and financial benefits,” said Carla Rooseboom, Senior Finance Expert, Global Clearinghouse for Development Finance (GlobalDF) and partner on creating the publication.
Accessing funding and using municipal resources wisely
With over 50% of climate finance coming from the private sector, cities need to improve their ability to access this capital in order to increase the finance available for climate projects. However, cities struggle to access finance for the early stages of project preparation that will enable them to access this capital.
Drazen Kucan, Lead Urban and Energy Efficiency Specialist at the Green Climate Fund, stated that the Fund has pledged $9.8 billion to the One Fund and has implemented 124 projects to the value of $5.6 billion with 396 projects having accessed $269 million in Readiness Grant Funds. Importantly for countries to access these funds, there must be a translation of national objectives into investment grade projects. Kristina Eisele mentioned the European Investment Bank’s African Sustainable Cities Initiative and the Gap Fund which have recently launched, with the aim of supporting early stage project preparation and connecting city projects with project preparation facilities.
Sasank Vemuri explained how MobiliseYourCity works with cities in Africa to identify projects through a comprehensive planning process that has successfully unlocked investment for low carbon transport initiatives. “Resources are perpetually scarce. As a collective we need to learn to do more with less. International support should help local governments use and manage their own resources effectively by focusing on the results rather than the outputs,” he said.
To close the session, Mary Mbenge, Chief Officer Environment and Natural Resources of Makueni County, Kenya, shared her experiences in identifying and preparing projects. Her advice to cities is that they should start with a dialogue with partners and funders and demonstrate their climate commitment with their own funds, wherever possible. “Start somewhere, even if it’s with small fund mechanisms, before going to donors. In Makueni County Government, 1% of the municipal budget goes into a climate change fund. Over time we’ve secured funding from the Green Climate Fund and others”.
Click here to read more about “Finance Roadmaps for Climate Projects: How can Local Governments in Sub-Saharan Africa facilitate access to finance?”
Click here to watch the recording of the session at CoM SSA Day event in English.
Click here to listen to the French recording.