On November 12th, at COP 22 in Marrakech Morocco, the Cities Climate Finance Leadership Alliance (CCFLA) organised an official UNFCCC side-event launching a new report, CCFLA 2016 Scoping Report mapping gaps and opportunities in localizing climate finance for CCFLA members and beyond.
Merlyn Van Voore, coordinator for UNEP’s engagement with the Adaptation Fund and Secretariat of the CCFLA, moderated the proceedings.
Mr Jean-François Habeau, Executive Director of FMDV and Secretariat of the CCFLA outlined the main results of the Scoping report that is available on the CCFLA website (http://ccfla.wpengine.com). A number of CCFLA members went on to present their achievements in 2016, as well as the work of CCFLA Working Groups:
Mrs Carina Borgström Hansson, Senior Advisor, Global Lead Earth Hour City Challenge, WWF Sweden, presented the WWF flagship sustainable cities initiative Earth Hour City Challenge, and invited members and attendees to join the Sustainable Energy Investment Metrics Consortium.
Mr Holger Dalkmann, Director, Strategy and Global Policy, WRI, raised a key question: How to unlock already existing funding and shift it from brown investment into green and how to bring the already existing innovative financial solutions into cities? One of the main barriers is that the finance sector, as well as the cities and the solution suppliers have limited understanding of these issues. Therefore, some of the drivers that could be followed are: capacity-building, elaboration of a common language, strengthening institutions and consolidation of procedures. WRI is supporting the NDC Partnership that unveiled the NDC Funding & Initiatives Navigator, an online database of climate finance and support initiatives aiming at facilitating the information on the technical options of delivery models, funding sources and products avaiable to achieve the Paris Agreement and SDGS.
Mr John Tidmarsh, Chief Investment Officer of R20 Regions of Climate Action, Secretariat of the CCFLA and Co-Chair of the CCFLA Project Preparation Facility Working Group, illustrated the need for project preparation facilities (PPFs) by presenting R20’s 100 Climate Solutions Projects Campaign that identified more than 650 green infrastructure projects globally, working with partners many of whom CCFLA members, and by presenting R20’s Pre-Investment Facilities (PIFs) that will prepare projects for investment. He went on to describe the work of the PPF Working Group of which ICLEI, GIB, C40, AFD, FMDV and R20 are members, inviting others to join.
Mr Victor Gancel, Program Manager LoCal, Climate KIC and Chair of the Innovations Lab Working Group presented new developments and engagement opportunities and an update on the Innovation Labs Working Group. In addition, he presented the “Low Carbon City Lab” initiative that supports projects that are in line with Climate KIC´s work streams: PPF in The Western African Economic and Monetary Union (WAEMU) implemented by FMDV and ICLEI with the objective of supporting project preparation either through direct support to local governments or through existing financial institutions dedicated to local development; The Matchmaker implemented by CDP that connects cities and investors; and Innovative monitoring of CO2 for transport (IMC4T).
Mr Josef Leitmann, Lead Disaster Risk Management Specialist, The World Bank, focused on the need to adopt a different approach: rebalance towards adaptation to enable people living in cities to be more resilient to climate change. Additionally, he underlined that the discussion should shift towards resilience finance instead of climate finance provided that it will allow a comprehensive debate including a broader range of shots and stresses (health, technological, socioeconomic). In order to continue supporting urban resilience projects, the World Bank intends to work hand in hand with the CCFLA and to build other partnerships; but for that purpose the following requirements need to be addressed: more investments into urban resilience finance, bringing domestic private and public capital, and consolidating tools and metrics.
Ms Jennifer Doherty Bigara Rodriguez, Climate Change expert, IDB, declared the necessity to display programmatics in cities given that the challenge will consist in creating projects for many different cities at the same time. The second aspect that was underlined was the need to integrate the analysis of co-benefits in order to design the appropriate measures to include in the planification of cities. For this to happen, the dichotomy between mitigation and adaptation needs to come to an end.
A panel of experts challenged the previous panel and took questions from the attendees stimulating debate between participants. Some of the main questions were: How to make projects bankable? What preparatory work is needed?; How to invest in adaptation measures?; How will the money for climate adaptation and mitigation will be distributed?; Do you work with national institutions to accelerate the access to climate finance? Which ones? In which field do you work with them?
Regarding the first questions, some of the speakers referred to the importance of climate risk avoidance when investing at the urban level. Mr.Leitmann also mentioned the major barriers that the developing world faces when it comes to making projects bankable: lack of reliability of financial management systems, corruption, poor creditworthiness. In terms of distribution of money, it is very hard to anticipate because it will be a demand-driven process. Finally, Ms. Doherty explained that the Inter American Development Bank works with national development banks for projects related to energy efficiency for municipalities.
Mr Sean Kidney, CEO, Climate Bonds Initiative, focused on the importance of cities provided that it is the beginning of a period of extraordinary investment there and it is a crucial moment to consider the way they are built in terms of infrastructure. The biggest challenges are how to shift towards green to these integrated cities, the generalised problems of financial viability and the need to increase the low interest rates. Mr. Kidney stated that the response relies on: on the one hand, the short and easy way is to foster investability through capacity building and credit enhancement; on the other hand, the current models (of transport and energy efficiency) should be transformed. In conclusion, he exhorted countries like Mexico or Colombia to go to the next COP and present their national capital raising plans for trillions to the investor community. The money is there and infrastructure projects will only work if they emerge from a partnership between private capital, government and development banks.
Lance Pierce, President for North America, CDP, presented the “Matchmaker initiative” that was implemented with Climate KIC and ICLEI to bring together capital with projects in order to catalyse more deal flows and investments. Matchmaker is also about using the power of disclosure and understanding better which are the the barriers to get deals done.
There was a final round of questions and comments from the audience. Some of the issues that arose were: can investment in renewable energy be said to be badly rated? How many green bonds have been issued by cities or regions in the last years. Finally, Charlotte Boulanger, Climate Finance Project Officer of the FMDV, announced the preparation of the first practitioners PPF forum in 2017.
The Secretariat Team.