This third publication of the International Urban Cooperation (IUC) financial series aims to give an overview on innovative financing mechanisms. While traditional forms of municipal finance retain their importance, the role of new financial instruments and the engagement of the private sector become vital. Still, as experience show even when creditworthiness is not an issue, most of local and regional governments are either not aware or are afraid of using unconventional tools of financing. The aim of this booklet is to collect the most frequently used innovative financing schemes also applied in emerging economies, illustrated with case studies.