Last month, the Global Covenant of Mayors, alongside the Governments of Germany and Luxembourg, announced the launch of the new City Climate Finance Gap Fund. The Fund aims to gather €100 million in grants – including €40 million from the German government and €10 million from Luxembourg – in order to unlock investments of €4 billion for high-quality, low-carbon, and climate resilient infrastructure projects in cities.
Cities’ climate action plans are crucial to achieving the goals laid out as part of the Paris Agreement. Urban action is being taken and progress is being tracked through initiatives including the Global Covenant of Mayors. However, cities often lack critical resources and capacity to advance high-quality infrastructure projects. There thus exists a vast array of infrastructure project ideas that can contribute meaningfully and concretely to climate change mitigation and adaptation that never reach the stage of investment and implementation.
The City Climate Finance Gap Fund will ensure projects can move from concept to full feasibility analysis and investment. This will include supporting project preparation based on three objectives: capacity-building for local authorities, building business cases for projects to access late-stage technical assistance, and increasing the pool of bankable projects for investors.
Michael R. Bloomberg, UN Secretary-General’s Special Envoy for Climate Action and Co-Chair of the Global Covenant of Mayors for Climate and Energy, explained that “Cities are at the forefront of our global efforts to fight climate change, and the City Climate Finance Gap Fund is an important new step to support them. The fund will help cities turn their ideas into concrete projects that create sustainable infrastructure, reduce emissions, and protect residents from the worst impacts of climate change. Cities’ actions are already making a big difference – and this initiative will allow them do more, faster.”
The Fund was announced at the UN Climate Action Summit, which took place on 23 September in New York. The UN put out a press release alongside the event that points to the critical role of innovative urban infrastructure projects, such as those that will be supported by the Fund. Pulling from the recent Coalition for Urban Transitions global report, the press release acknowledges that “national governments can achieve faster, fairer economic development by investing in zero-carbon cities.” The City Climate Finance Gap Fund is one avenue through nations are doing just that.
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