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Funding and financing sustainable urban infrastructure

This Global Programme focuses on the fiscal preconditions and financing mechanisms for national governments to mobilise investment in sustainable urban infrastructure at scale.

Creating compact, connected and clean cities could increase economic productivity, improve public health and cut greenhouse emissions. Realising this opportunity depends on funding sustainable urban infrastructure including in buildings, energy, transport, sanitation and water. Today, the financing gap exceeds US$1 trillion a year.

This Global Programme makes the case for a coordinated or systems approach to urban finance. Traditional approaches to urban finance have often focused on actions that cities can take, such as issuing municipal bonds or securing a good credit rating. In contrast, this Global Programme recognises the critical roles that national governments must play in mobilising resources and ensuring long-term fiscal sustainability of major sustainable infrastructure investments at the city level.

The team have already published pioneering papers considering how national economic decision-makers – such as heads of state and finance ministers – can expand the resource envelope and manage liabilities. Where there are robust fiscal underpinnings, this work identifies key instruments to crowd in private finance for low-carbon, climate-resilient projects. Next, they are working with national governments in China and Mexico to appraise national policy options to fund and finance compact, connected, clean cities.

Background papers

The Mexico: Building Back Better paper is part of the Coalition for Urban Transitions’ Finance programme. It has not undergone our rigorous internal and external review process yet and is therefore considered a background paper.

This paper explores the role that compact, connected and cities could play in Mexico’s economic recovery from the COVID-19 pandemic. It focuses on the finance reforms needed at the national, state and local level to create employment and generate the sustained and balanced growth the country needs to offset the health and economic shocks of the past year.