Addressing Core Challenges in Climate Finance: Reducing the
Cycle Gaps towards Climate Investment
GCoM Southeast Asia and the International Urban Cooperation (IUC) Asia HelpDesk (the Helpdesk), a programme funded by the EU, have been assisting pilot cities to enhance their capacities to develop the Climate Action Plans (CAPs). Developing a CAP allows City to define climate mitigation and adaptation strategies based on evidence-based approach with the engagement of all relevant stakeholders.
The capacity of cities to cope with climate change and its impacts is varied. That makes the global distribution of financial resources is crucial and highly needed. The undeniable vitality of climate finance emphasises the urgency to warrant its optimal and well-aimed distribution.
In recognition of the global financing opportunities, the HelpDesk is assisting pilot cities to acquire the City Climate Finance Gap Fund (CCFGF), an initiative launched by GCoM along with German and Luxembourg Governments. If selected, cities will obtain technical assistance from CCFGF for next step development of their low-carbon and resilient urban infrastructure projects reflected in their CAPs. The CCFGF is unique as it will help cities in the early phases of the project: 1) to clearly define the climate-related challenges that they face (project definition stage), and 2) to demonstrate the feasibility of the project proposed as the solution (pre-feasibility stage). Technical assistance on the project preparation and the completion of the pre-investment cycle is definitely crucial for project bankability. Realising the importance, IUC Asia Team has started preparing cities for the opportunity. Penampang District (Malaysia) is one of the pilot cities that have gone through the preparation process.
Penampang District, with a population of 93,616, is facing the constant threat of major flooding that costs them significant socio-economic loss. Recognising CCFGF prospects, IUC Asia Team helped the local government to identify the core issue of flood prevention and enable them to present a feasible work plan.
IUC Asia Team has also started the preparation process for other cities such as Hang Tuah Jaya and Muar to conduct the preliminary identification on several promising projects, including the one on renewable energy. Technical input has been provided to broaden the scope of projects.
Good stakeholder engagement that enables discussion of projects is a key factor in creating and implementing CAPs and exploring funding. With the preparation is conducted in parallel with CAP creation, IUC Asia Team expects that cities are better equipped to apply for financing opportunities similar to CCFGF after or even before their CAP concludes….. [read more]