Project Preparation Action Group

The Project Preparation Action Group, launched in July 2016, supports the Alliance’s members in identifying, coordinating and accelerating existing Preparation Facilities (PPFs) for low-carbon and climate-resilient urban infrastructure projects. It focuses on enabling implementation, supporting local metropolitan and regional governments and their partners to build capacity and to scale up planning, project preparation and financing of their projects. The Action Group also plans raise awareness on the value of Project Preparation Facilities, as well as accelerate replication and innovation; and finally encourage and promote greater cooperation between the Alliance members involved in such mechanisms.

Co-chairs

The Project Preparation Action Group is led by the following organizations:

What is a Project Preparation Facility? How can it help cities?

Most cities, especially in developing countries, face major challenges in identifying and developing financially viable low-carbon and climate-resilient infrastructure projects, which are at the same time attractive to public and private financiers. The preparation of bankable projects at the subnational level is particularly challenging since it often requires high degrees of technical and financial engineering capacities.

Project Preparation Facilities (PPFs) assist cities by supporting activities in the project preparation stage of the project cycle with the goal of successfully connecting with finance. Most PPFs cover four main phases of the project preparation stage of the project cycle:

  • Project Concept Definition: This phase includes the first steps involving project selection and the decision to further develop a project. Pre-feasibility studies, cost estimates, funding analyses and testing of alternative approaches can be part of the project concept definition. The first consideration of environmental and social factors takes also place in this phase.
  • Project Feasibility: This phase proceeds to a more technical level and involves more concrete project aspects like feasibility studies, demand planning, engineering, sustainability and resilience aspects, technical planning, institutional and procurement arrangements, business plan, environmental and social impact assessment.
  • Project Delivery Planning (Structuring and Transaction Support): In this phase, financial, administrative, legal, procurement and risk management arrangements are made.
  • Project Processing and Approval: This phase secures the legal and financial basis for the project, encompassing government approvals, legal arrangements, and financial close.

Infographic of infrastructure lifecycle and project preparation activities.

There is a wide variety of specialisation among PPFs. Some facilities are generalists with a global focus and a wide range of sectors, while others are geographically or sectorally focused. Some PPFs are tied to a specific fund or development bank and serve as a project pipeline for that fund or bank. Certain PPFs also specialise in projects with private project sponsors and Public-Private Partnerships (PPPs). Most PPFs provide technical assistance or grants for the preparation activities in some or all of the project preparation phases.

Assisting cities in project preparation is a key enabler of the project delivery process and advancing new financing models for sub-national low carbon infrastructure projects. It is also a way – from an early stage – to aggregate cooperation efforts and commitments coming from a wide range of stakeholders, in particular public and private investors and financing institutions.

Green City Finance Directory

To further enable cities to connect with support from PPFs, the Alliance launched the Green City Finance Directory, an interactive catalogue of PPFs that support city-led infrastructure projects. The Directory helps sub-national governments and stakeholders identify PPFs that can support them in developing green and resilient infrastructure.

Project Preparation Publications from The Alliance

Assessment of CCFLA’s Value Chain for Early Stage Project Preparation In Mexico, Cities Climate Finance Leadership Alliance, 2019. This assessment aims to propose a pilot strategy for CCFLA members to leverage engagement opportunities between them and local governments in Mexico to improve coordination and communication for technical and financial assistance offered for the development of climate projects.

Summary of Good Practice of Successful Project Preparation Facilities Report, Cities Climate Finance Leadership Alliance, 2018. The report profiles a set of subnational project preparation facilities (PPF) in Asia and Latin America to identify and analyze Project Preparation Facilities (PPFs) experiences and provide recommendations on the comprehensive ecosystem of action to support project preparations needs for cities and regions.

Localizing Climate Finance, Mapping Gaps and Opportunities, Designing Solutions, Cities Climate Finance Leadership Alliance, 2017. The report highlights the great diversity of financial and non-financial products and services developed by CCFLA members, to support cities and regions’ climate-smart investments, particularly through project preparation (eg. funding and technical advisory services in project preparation phases; technical assistance for sustainable infrastructure planning and financial design.

The State of City Climate Finance Report 2015, Cities Climate Finance Leadership Alliance, 2015. The report identifies the gap between the current levels of investment in low-emission, climate-resilient urban infrastructure and the volumes required to ensure that the world is on track to keep global temperature rise below 2 degrees.

Websites and Tools

C40 Finance Facility Knowledge Lab, C40 Cities Finance Facility. A collection of reports, videos, tools and briefing guides, covering the key issues in the fields of climate change, urbanisation and climate change filterable by project preparation.

The EPEC PPP Guide, European Investment Bank. An interactive online guide to the steps required to prepare, procure and deliver PPP projects.

PPPrep Tool, European Investment Bank, 2016. An Excel-based interactive tool to assess the preparation status of a given PPP project by reference to a typical good-practice PPP project development process. Scroll to the bottom of the linked page to download the tool.

Infrastructure Knowledge Exchange, The Global Infrastructure Hub. The Infrastructure Knowledge exchange aggregates publications, case studies, and websites that cover a range of infrastructure planning, project preparation, and finance topics.

Harmonized application for project preparation facilities, The Alliance’s Project Preparation Action Group. A harmonized application form to help cities understand the relevant information being sought for project support, reduce the amount of time cities’ spend in preparing application packages, and to create a streamlined approach to project application.

Publications

G20 Principles for the Infrastructure Project Preparation Phase, G20, 2018. Five key dimensions of project preparation identified by the Infrastructure Working Group.

Unleashing Private Capital Investments for Sustainable Infrastructure Greenfield Projects: Scoping Study regarding the Early Stage Project Preparation Phase, Global Infrastructure Basel, 2020. This study attempts to identify the main reasons why sound project ideas very often cannot make it through the “Valley of Death” for early stage infrastructure projects, leading to recommendations to improve the project preparation landscape by MDBs.

Leading Practices in Governmental Processes Facilitating Infrastructure Project Preparation, Global Infrastructure Hub, 2019. This Reference Tool on Governmental Processes Facilitating Infrastructure Project Preparation is a guidance tool to support governments in implementing infrastructure projects and in their efforts to strengthen the building blocks for project preparation.

Governmental Processes Facilitating Infrastructure Project Preparation, Global Infrastructure Hub, 2019. The reference tool aids policy-makers and practitioners to improve project preparation practices and their capacity for preparing quality infrastructure projects.

Filling the Infrastructure Investment Gap: the Role of Project Preparation and Structuring Facilities, Inter-American Development Bank, 2019. This paper provides reflections and considerations as to how MDBs including the IDB can use the Project Preparation Facilities (PPFs) to help countries fill the infrastructure gap by improving the quality of projects, reducing and mitigating risks, and leveraging private financing.

Project Preparation Explainer, The Project Preparation Trust of KwaZulu Natal, 2016. Infographic of the project preparation process.

 

 

Membership in the Project Preparation Action Group is open to all members of the Cities Climate Finance Leadership Alliance.

Please contact the Secretariat if you are interested in joining: secretariat@citiesclimatefinance.org.