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Financing climate change adaptation: Options for Asian cities and the role of third- party brokers Presented by Verena StreitferdtVerena Streitferdt

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Presentation on theme: "Financing climate change adaptation: Options for Asian cities and the role of third- party brokers Presented by Verena StreitferdtVerena Streitferdt"— Presentation transcript:

1 Financing climate change adaptation: Options for Asian cities and the role of third- party brokers Presented by Verena StreitferdtVerena Streitferdt (verena.streitferdt@uts.edu.au) CDIA consultant For the Session G3 at Resilient Cities 2012 Financing the Resilient City: Public grants and Market-based instruments

2 Statements regarding climate financing Mexico City’s Mayor Marcelo Ebrard underlines: “The architecture that is available now is not working, why, because it is not designed to help the cities; it is designed to work with the national governments.” Andrew Steer, the World Bank’s Special Envoy for Climate Change, says: “We have got to be more imaginative in our environmental financing, managing to make things more comfortable for investors, and maximizing returns”.

3 Outline  Cities development Initiative Asia Background  CDIA case study  CDIA/PAKLIM study on cities and climate finance  Tips for cities who seek financing for climate change measures

4 Asia’s Urban Challenge  Asia’s economic growth is predominantly urban based  The estimated urban environmental infrastructure investment need in the Asia-Pacific region is about $100 billion per year  Current urban environmental infrastructure investment is about $ 40 billion per year => Investment gap

5 Bridging the urban infrastructure investment planning and programming gap CDIA Rationale  Cities often have macro-development strategies and spatial plans, but city infrastructure projects to implement them are often not adequately defined and prepared for financing  Particular issue for the 1,400+ medium-sized cities in Asia’s developing countries with populations of 250,000 to 5,000,000  Difficult to use standard feasibility study instruments for these purposes, need for additional instruments  Cities Development Initiative for Asia ?

6 CDIA Focus Areas City Development Plan/Strategy Infrastructure Investment Programming Pre-Feasibility Studies/Project structuring Feasibility Study Project Implementation Operation & Maintenance CDIA Focus Areas Financing Arrangements Infrastructure Investment Project Cycle UP-STREAMDOWN-STREAM DIRECT SUPPORT CAPACITY DEVELOPMENT

7 CDIA City Interventions (ongoing, completed) IMPLEMENTATION STATUS, March 2012 - 42 APPROVED CITY APPLICATIONS IN 13 COUNTRIES (67 PFS) - SUPPORT COMPLETED IN 21 CITIES INCLUDING 33 PFS - ONGOING SUPPORT IN 21 CITIES (34 PFS)

8 City example Naga, Philippines Initiation Mayor Bongat send an application letter to CDIA Objective: Integrated Naga River Revitalization Project 1. Urban Renewal (River walk) 2. Wastewater Management, Drainage 3. Flood Protection/Climate Change Adaptation Method 5 months consultancy work and coordination with local governments Duration Aug – Dec 2011 Outcome Pre-Feasibility studies presented in March 2012

9 Cooperation: Cities Development Initiative in Asia (CDIA) and GIZ project: Policy Advise for Environment and Climate Change (PAKLIM) Support Objective: To identify the financing possibilities to support the cities to implement respective climate change mitigation and adaptation activities Approach:  National study in Indonesia  Regional Study in the Asia Pacific Studies on financing local climate action

10 Results – international  Only 2 out of 14 international funds are accessible to cities  Emerging climate financing - Green Climate Fund - Carbon markets and Green bonds - National appropriate mitigation actions (NAMAs) - National appropriate adaptation actions (NAPAs)  Limited opportunities for direct finance access to cities

11 Results – Private Capital  Investment in public goods and infrastructure -Public Private Partnership (PPP)  Market Launch and diffusion of goods and companies on the supply side -Development partnerships -Carbon market financing (only mitigation)  Market launch very dependent on enabling investment frameworks (e.g. guarantees for investment etc.)  Investment package might attract private financing (e.g. Bus terminal in Banda Aceh)

12 Results – government  Limitations of Local (city) finance  National finance in form of programmes (e.g. Indonesia: Special allocation fund for drinkable water)  Tax and levies  Loans and municipal bonds  Main opportunity for cities investment seem to come from national government programmes.

13 Advice for cities seeking climate finance  Prepare proposals (Vulnerability assessment and prioritisation)  Access to Private capital: Improve credit worthiness and leverage their existing assets and financial resources Engage in Public/private partner cooperations  Engage with NGOs and national and international technical assistance agencies - bilateral: CDIA, GIZ etc. - multilateral: UNDP, UNHABITAT  Start with small projects now to create visibility !

14 THANK YOU! Cities Development Initiative for Asia Suites 202-203, Hanston Building Emerald Avenue, Ortigas Center, Pasig City 1600 Metro Manila, Philippines www.cdia.asia


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