Three new finance initiatives and partnerships have been launched that will accelerate the implementation of the Paris Agreement in cities and local governments.
The Global Covenant of Mayors has partnered with the EU, the European Investment Bank (EIB) and European Bank for Reconstruction and Development (EBRD) under the umbrella of ‘Global Urbis’. The partnership will provide financial advisory services and financing to foster low carbon and resilient investments.
The EIB, which plans to lend US$100 billion in the next five years for climate-related projects, aims to develop a global advisory and financing facility focused on facilitating climate action investments in cities. This global ‘one-stop shop’ will address market failures by providing investment and advisory support for Covenant cities.
Meanwhile, the EBRD will work with the Covenant to support the development and financing of cities’ action plans and projects necessary to cut carbon emissions with a focus on the European Neighbourhood area and the Middle East and North Africa. EBRD’s initial investment today totals €500 million, with the goal of mobilising over €1.5 billion in financing to ensure 40 to 60 Covenant cities have necessary resources to enact critical climate actions.
“This marks an important step towards providing the much-needed resources cities need to enact critical climate actions,” said Suma Chakrabarti, President of the European Bank for Reconstruction and Development. “As cities around the world drive climate leadership, we are pleased that this investment will ultimately support the quality of life at the local level and contribute to addressing the global climate challenge.”
World Bank partnership
Working with the Covenant, the World Bank will invest US$4.5 billion over the next three years through its City Resilience Program to provide technical and financial assistance to 150 cities across the world as they undertake aggressive climate action.
The partnership will help leverage the private sector by developing bankable business plans, structuring public-private partnerships to crowd in private sector investment, monetising increases in land values, and designing and implementing credit enhancement mechanisms to allow for commercial financing to cities.
“As the force of natural disasters intensifies, we need to better plan and build more resilient cities,” said Jim Yong Kim, President of the World Bank Group. “We are proud to partner with the Global Covenant of Mayors to do just that. With the World Bank’s investment of US$4.5 billion in cities, we can support local leaders to protect people from the impacts of climate change.”
Vertical integration of local authorities
Spearheaded by Global Covenant of Mayors Board Member and Mayor of Quito, Mauricio Rodas, in collaboration with the mayors of Buenos Aires, Medellin, Mexico City and Seville, local authorities are being called on to work on vertical integration in national climate investment plans. The group is calling for a demonstrative flagship pilot with a focus on rolling out low emissions/zero emissions measures in urban historic centres. The mayors aim to work with city networks and financial institution partners to release demonstrative vertically-integrated nationally determined contribution (NDCs) investment plans in 2018.
“Since signing the Paris Agreement, mayors have demonstrated the power of local action to make their cities and our planet more sustainable,” said Maroš Šefčovič, Co-Chair of the Global Covenant of Mayors for Climate & Energy and Vice President of the European Commission. “The Global Covenant of Mayors’ announcements at the One Planet Summit, and its strong partnerships with the European Commission, the EIB and EBRD, will fill a much needed gap by providing cities with new levels of access to investments, financing and advice, critical to furthering urban climate action.”