On Wednesday, September 23, 2020, City Climate Finance Gap Fund was officially launched virtually, accessible to worldwide audience. The Gap Fund helps cities in developing and emerging countries realize their climate ambitions, turning resilient low-carbon urbanization plans and projects into finance-ready investments. The Fund will address the critical lack of grant funding necessary to mature pipelines of projects from concept to a stage where they can be advanced towards full feasibility analysis and ultimately investment. This will be conducted through a guidance with the goal of attracting more financing and support for implementation. The Fund will, hopefully, significantly increase the pipeline of high-quality bankable climate-friendly urban infrastructure projects that must be progressed to meet the urgency of the climate crisis.
The Gap Fund is targeting at least 100 million Euros in overall funding – funding that can, in turn, leverage more than 4 billion Euros in investment for urban climate action. This will support project preparation activities for low-carbon and resilient urban infrastructure projects in a minimum of some dozen cities per year by pursuing the following three principle objectives:
- Capacity building: Enhance cities and local authorities’ capacity to mature high-quality project ideas to later–stage project preparation;
- Pipeline-building for later-stage technical assistance: Build a solid portfolio of project business cases for initiatives and institutions that focus on providing technical assistance for late-stage project preparation; and
- Pipeline-building for investors: Increase at scale pipelines of bankable projects.
In the City Climate Finance Gap Fund Launch, a number of speakers representing the partners and stakeholders involved in this project were present and delivered their remarks to kickstart the Gap Fund. Among many, there was President Werner of European Investment Bank, highlighting the COVID-19 pandemic as an opportunity to rebuild better and accelerate a green recovery. “This is a tangible example of how the EIB’s partnership with governments, local authorities and the World Bank can support the global shift towards a climate-neutral economy and the achievement of the Sustainable Development Goals.”
Norbert Barthle, Parliamentary State Secretary of the Germany’s Federal Ministry of Economic Cooperation and Development, added, “The climate-neutral and resilient cities of tomorrow are being built today and it’s our responsibility to lend a hand. Through the Gap Fund, cities are enabled to lay the foundation stone for sustainable infrastructure and ambitious climate action from day one, thus mobilising urgently needed investments to achieve their climate targets and drive a green recovery.”
A moderated panel discussion was also held during the Gap Fund Launch, inviting three panelists, including Tri Rismaharini, Mayor of Surabaya, Indonesia. She expressed her enthusiasm in welcoming the launch of the City Climate Finance Gap Fund as she believed this would significantly support Surabaya City, the second largest city in Indonesia, to address its climate challenges. Solid waste management, she mentioned, was among the common urban challenges Surabaya City Government has been dealing with. While having final disposal site with a capacity of 1400 tons of waste per day and a comprehensive community-based waste management system, she was concerned about the current solution being not sufficient enough to cater to the problems. Mayor Risma believes the Gap Fund will definitely tackle the issue of Surabaya’s waste management through the developing of Waste-to-Energy project in landfills which will generate electricity from garbage treatment. The opportunity from Gap Fund, she said, will finance the visibility studies for new sustainable final disposal site that can accommodate up to thousand tons of waste a day.
In the panel discussion, Mayor of Chefchaouen, Morocco, Mohamed Sefiani, also recognises the current main challenge in building a sustainable future: how best to encourage an economic and social recovery that must be green, inclusive, and done urgently. “Cities are the hub of the global green recovery. Mayors are united in their vision for a green and just recovery – one that rebuilds our communities and economies to be stronger and more resilient than ever before. However, even without a pandemic to contend with, cities in the Global South face complex challenges with limited resources. The Gap Fund responds this critical need, empowering cities like Chefchaouen to live up to their climate goals, while also supporting greater resilience, liveability, and health within our communities.”
IUC Asia will be giving technical assistance for our five pilot cities: Malang, Palembang, Hang Tuah Jaya, Penampang, Muar to submit their applications for the City Climate Finance Gap Fund. Further details about its eligibility criteria can be found here.