GLOBAL– The Governments of Germany and Luxembourg in collaboration with the World Bank, European Investment Bank and Global Covenant of Mayors have launched the City Climate Finance Gap Fund (“The Gap Fund”) to support development of climate resilient cities in emerging economies.
According to a statement from the European Investment Bank. the launch of the Gap Fund paves the way for low-carbon, resilient and livable cities in developing and emerging economies by unlocking infrastructure investment at scale.
Cities are on the frontlines of the climate emergency and currently account for around 70 percent of global CO2 emissions.
The European Investment Bank notes that Urban centers’ share of emissions is expected to grow as 2.5 billion people migrate from rural to urban areas by 2050.
Before the COVID-19 pandemic struck, it was estimated that more than $93 trillion in sustainable infrastructure investment was needed by 2030 to meet climate goals.
The Gap Fund investment is aiming to unlock at least €4 billion of final investment in climate smart projects and urban climate innovation.
“The Gap Fund will help cities in developing countries to implement their transformative climate projects. This is a tangible example of how the EIB’s partnership with governments, local authorities and the World Bank can support the global shift towards a climate-neutral economy and the achievement of the Sustainable Development Goals.”Werner Hoyer- EIB President
Filling a gap in available project support, the Gap Fund also plans to offer technical and advisory services to assist local leaders in prioritising and preparing climate-smart investments and programs at an early stage, with the goal of accelerating preparation, enhancing quality, and ensuring they are bankable.
As cities strive to recover from the economic impacts of COVID-19, investments in clean energy, climate resilient water and sanitation, and urban regeneration projects will play an important role in eliminating pollution, improving local food systems, and creating green jobs.
They will also lead to cleaner, healthier, and more equitable communities – conditions that can help prevent future pandemics.
However, cities frequently lack the capacity, finance and support needed for the early stages of project preparation – especially in developing and emerging economies.
This leads to impasses where cities cannot move project ideas to late-stage preparation and implementation.
This hurdle is frequently overlooked by national and international support – a challenge the Gap Fund will seek to overcome.
The Gap Fund will be implemented by the World Bank and the European Investment Bank and its mainly financed by the Government of Germany (€45 million) and Luxembourg (€10 million).
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