Clean Energy | September 28, 2020

New fund aims to bridge the ‘city climate finance gap’

Nicole Reed
Guest Author

Nicole Reed

ImpactAlpha, Sept. 28 – Cities account for 70% of global CO2 emissions, a figure that is expected to rise steeply as another 2.5 billion people migrate to urban areas by mid-century.  Yet cities, especially in developing markets, often lack the financial and technical resources to get sustainable infrastructure projects off the ground. That is only likely to worsen as city budgets are strained by the COVID pandemic. 

The City Climate Gap Fund, launched at last week’s NYC Climate Week, aims to fill that gap. It will provide funding and technical assistance to cities to help advance clean energy, water, and other infrastructure projects and build a high-quality project pipeline for investors.

“There is no sustainable future without sustainable cities,” said the World Bank’s Mari Pangestu in announcing the fund during last week’s Climate Week. 

Other partners include the governments of Germany and Luxembourg, which have put up an initial €55 million, and the European Investment Bank and Global Covenant of Mayors.

The partners hope to raise a total of €100 million ($116 million) to unlock at least €4 billion in total funding to meet the challenge. Africa alone will need to build the equivalent of 60 New York Cities by 2050 to keep up with urban growth, noted Germany’s Norbert Barthle.

The fund is now open for proposals from municipalities. 

Green Recovery

Separately at Climate Week, a dozen cities representing over 36 million residents pledged to divest from fossil fuel companies and advocate for sustainable investment and green jobs.

Cities signing onto the “Divesting from Fossil Fuels, Investing in a Sustainable Future,” declaration include Berlin, Bristol, Cape Town, Durban, London, Los Angeles, Milan, New Orleans, New York City, Oslo, Pittsburgh, and Vancouver.