The World Bank Group, with support from The Rockefeller Foundation, will expand its program to help cities unlock capital to deliver needed infrastructure for a climate-smart urban future.
The Foundation has provided a grant of US$1 million as seed funding for a new multi-donor trust fund to improve financial management and enhance creditworthiness of developing country cities through the Bank’s “City Creditworthiness Initiative.” The grant will enable close collaboration to bring the Bank’s Initiative to five cities over three years, which will include cities selected as part of the network for 100 Resilient Cities – Pioneered by The Rockefeller Foundation .
“In the face of urbanization, globalization and climate change, creating infrastructure that builds resilience in cities is more critical than ever,” said Saadia Madsbjerg, managing director at The Rockefeller Foundation. “For nearly a decade, The Rockefeller Foundation has been working with cities to strengthen access to financing options to get these projects off the ground.”
In a rapidly urbanizing world, the demand for infrastructure is vast. According to estimates,the global investment shortfall in infrastructure is at least $1 trillion per year. Cities will require better access to capital markets and large scale project finance to pursue a low-carbon growth path. Today, just 4% of the 500 largest developing country cities have globally recognized credit ratings and only 20% in local markets, limiting their access to private capital.
The Bank’s “City Creditworthiness Initiative” aims to address this challenge by helping cities improve financial management and creditworthiness through a range of activities spanning several years – from training workshops to follow-up support for action planning, technical assistance for adaptation or mitigation projects, and fund raising.
“Achieving creditworthiness is a long journey, but all cities can benefit while they pursue this path by improving fundamentals. The support provided by The Rockefeller Foundation will enable us to help more cities achieve sustainable and inclusive growth in the long term, working with a broad range of partners focused on the cities and climate change agenda,”said Marisela Montoliu Munoz, director for urban and disaster risk management, World Bank Group Social, Urban, Rural and Resilience Global Practice.
Under the “City Creditworthiness Initiative,” which was developed as part of a World Bank Group program to enable cities to strengthen climate action and avoid the prospects of a 4-degree warmer world – a future that would disproportionately impact poor or vulnerable people – four creditworthiness training workshops have been conducted since October 2013 in Nairobi, Seoul, Arusha and Bogota, helping 80 cities from 23 countries. Additional workshops are planned in Kigali, Kampala, and Amman, for cities in Rwanda, Uganda and West Bank Gaza respectively.
An advisory committee comprised of representatives from The Rockefeller Foundation, 100 Resilient Cities, the World Bank, the Asian Cities Climate Change Resilience Network (ACCCRN) Initiative, and the Public-Private Infrastructure Advisory Facility – Sub-National Technical Assistance Program is selecting the five new cities which will receive support. The scope of work for each city will be developed in collaboration with municipal and government officials. All partners, including those from selected countries, will have a chance to review the action-plans and join forces in the design and implementation of the technical assistance programs.