Press Release – Milan, Italy, 30 October 2017 – The first finance innovation lab for accelerating climate action in European cities has been launched by Climate-KIC, South Pole Group, the Global Fund for Cities Development (FMDV), CDP and the Climate Finance and Investment Centre at Imperial College Business School.
The City Finance Lab will work with European cities to overcome finance barriers holding back critical climate mitigation and adaptation projects, and offer incubation support for novel financial instruments. The Lab expects to leverage USD 500 million in additional finance for climate action in cities.
Globally, municipalities will need significant additional investments – on top of business-as-usual infrastructure costs – to improve the climate-impacts and climate-resilience of their infrastructure, in particular in the transport, energy, water, waste, and building sectors. To mobilize those investments, a set of services will be needed, including: project preparation to ensure projects meet the standards of the private investors, the creation of a pipeline of creditworthy projects, and matchmaking initiatives between project leaders and investors, etc.
The City Climate Finance Leadership Alliance (CCFLA) has estimated that the additional global capital investment per annum required to ensure that urban infrastructure is low-emission and climate resilient could be as high USD 1.1 trillion.
Cities consume over two-thirds of the world’s energy and account for more than 70% of global CO2 emissions. Making infrastructure improvements in cities is critical to the global decarbonisation challenge, which requires the carbon intensity of the global economy to fall by more than 6% every year – almost 6 times faster than anything the global community has achieved so far. To date, no EU member-state has achieved a reduction of more than 2% p.a.
As well as being high emitters, cities are also highly vulnerable to climate change, prone to sea level rise, storm surges, water scarcity, flooding and heatwaves.
Drawing down the USD 1.1 trillion needed to cut global emissions and improve resilience
Less than 15% of global climate finance has reached cities, according to the World Bank. European cities are no exception in the struggle to access climate finance, and face multiple barriers to financing climate action:
Until now there has been no platform focused on supporting European cities to overcome these barriers and unlock climate finance.
The City Finance Lab will help cities develop novel financial instruments and bankable climate projects by providing technical assistance through design, development, pilot preparation and scaling.
Cities and investors will be invited to submit proposals for innovative financial instruments for a place on The City Finance Lab’s incubation programme.
The Lab will be scaled up over a three-year period. Launching as Europe’s first innovation experiment for unlocking climate finance for municipalities, it will pilot its approach in Europe and then leverage its successes to roll out the programme in other countries and regions.
The first Call for Proposals is expected to be announced by (latest) June 2018. To register your interest or find out more contact Victor Gancel.
“It is Climate-KIC’s mission to support cities in accelerating their transition, for maximum climate impact,” says Victor Gancel, Low Carbon City Lab Programme Manager. “The City Finance Lab also has the potential to drive growth in climate-responsible funds, by delivering green investment opportunities for public and private investors.”
“Investments in cities are key for a successful transition to a low-carbon and climate resilient future,” says Renat Heuberger, CEO South Pole Group. “We are thrilled to co-initiate this City Finance Lab, which will incubate and accelerate innovative solutions for climate mitigation and adaptation in urban areas.”
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