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.
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.
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.
Research Links on Project Preparation from The Alliance
- Assessment of CCFLA’s Value Chain for Early Stage Project Preparation In Mexico
- Summary of Good Practice of Successful Project Preparation Facilities Report
- Localizing Climate Finance, Mapping Gaps and Opportunities, Designing Solutions
- The State of City Climate Finance Report 2015
Other Project Preparation Resources
- Infrastructure Knowledge Exchange (The Global Infrastructure Hub, 2020)
- Project Preparation Explainer (The Project Preparation Trust of KwaZulu Natal, 2016)
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: firstname.lastname@example.org.