Cities globally face an investment gap of around USD 1 trillion between current infrastructure investment levels and the amount needed to meet the Sustainable Development Goals and limit climate change to less than 1.5 °C. While multiple factors drive the investment gap, the lack of pipelines of investment-ready projects by cities is a key factor. Project Preparation Facilities (PPFs) help to address this challenge by supporting cities in preparing infrastructure projects so that they can secure financing.
The aim of this discussion paper is to map the PPF landscape and identify gaps in the project preparation offering to cities for sustainable and resilient infrastructure, using information gathered for the Green City Finance Directory, a web-based resource by the Cities Climate Finance Leadership Alliance (the Alliance). This mapping and gap identification exercise is intended to enable PPFs to collaborate more effectively to provide support to cities during the full project preparation process.
The analysis of PPFs in the Green City Finance Directory revealed some clear patterns characterizing the project preparation support available to cities.
- Geography: The number of PPFs supporting projects in a country is strongly negatively correlated with the country’s GDP per capita. Countries with lower incomes have more PPFs active in them.
- Sectors: PPFs are overwhelmingly multi-sectoral, with only 12% focused on a single sector. The most heavily supported sectors are Water, Sanitation, and Waste; Transportation/Mobility; and Renewable Energy.
- Support Type: Technical assistance is the dominant type of support followed by grants.
- Information and Contact: Public information on PPFs is mostly in English only, and a third of PPFs do not have clear contact or application information.
- Project Size: Few PPFs give specific size parameters for the projects they will support, but for those that do, the project sizes range from USD 2.5 million to USD 100 million.
- Project Stages: More PPFs support early project preparation stages than later stages, but project stage definitions lack consensus.
- Implementers: Public finance institutions and international organizations are the most common types of implementing organizations.
From the analysis we also make several recommendations:
- Improve public-facing information: Most PPFs lack publicly accessible information, particularly contact information, in languages other than English.
- Standardize terminology: Standardized project preparation terminology and definitions are needed to make it easier for cities to compare and identify suitable PPFs.
- Collect data for future research: The analysis revealed gaps in the current data. Future efforts should concentrate on collecting information on more detailed and clear project stages, and the scale of support at specific project stages.