Cities Development Initiative for Asia Investing in Asia's urban future

Climate Financing for Green Cities

BALAKRISHNAN ELANGOVAN, SENIOR PROGRAMME MANAGER, CDIA- INDIA,

BAQ – 2014, COLOMBO, 20-11-2014

What is CDIA?

CDIA is an international partnership initiative, established in 2007 by the Asian Development Bank and the Government of Germany, with additional core funding support from the governments of Austria, Sweden, Switzerland, and the Shanghai Municipal Government.

CDIA supports the identification and development of urban investment projects and links them with potential financiers.

CDIA provides assistance to medium-sized Asian cities to bridge the gap between their development plans and the implementation of their infrastructure investments.

Mandate

Why CDIA?

Over the next 20 years, Asian cities must be ready to provide infrastructure and services to an expected 1 billion additional people if economic growth and competitiveness are to progress …

Urbanization Indicators Asian cities… Show an enormous population growth -averaging 3% per year - compounding their global impact. Provide 80% of the economic base. Contribute to noise, air, and water pollution. Are the hubs of over 200 million poor and vulnerable.

Urban population in Asia increased from 229 million in 1950 to

1,719 million in 2009, and it is expected to further increase to

3,382 million by 2050. Source: United Nations. (2010). World Urbanization Prospects: The 2009 Revision Population Database.

Impact Areas CDIA supports the identification and development of urban investment projects that emphasize one or more of the following impact areas: Urban environmental improvement Urban poverty reduction Climate change mitigation or adaptation Improved governance

Climate Change Challenges Cities use about 85% of the energy and generate about 75% of GHGs. Developing Asia’s projected global share of CO2 emissions for energy consumption will increase from 30% to 43% by 2030. Many are especially vulnerable to climate change:

Rise in pollution and sea

levels puts trillions in economic output and

millions of people at risk

Urgent need for efficiency-gains,

reduction in pollution & GHGs,

and integrated planning for adaptation

Urban Poverty Challenges

About 700 million people in Asia and the Pacific live on less than US$1 a day, 400 million of them in urban areas.

Urban poverty is complex and multi-dimensional – extending beyond the deficiency of income or consumption:

• Deteriorating sanitation and environmental conditions

• Inadequate access to land and housing

• Physical infrastructure and services

• Livelihood sources

• Health and education facilities

• Social security networks and empowerment

• Exposure to climate change risks

Improved living conditions of

poor and vulnerable people lead to

activate local economy,

improve city image for investments,

create competitive cities,

and increase local revenues.

CDIA’s integrated

approaches assist to

target the urban poor,

ensure affordability and accessibility,

promote economic development,

and foster the involvement of

civil society.

Pro-Poor Urban Development

Financing Asia’s Urban Challenge

Finding Solutions

Cities often have

macro-development

strategies but city infrastructure projects are not related to them.

Bridging the gap requires city-wide

investment planning &

pre-feasibility project

structuring

Cities’ capacity to clearly demonstrate the

viability of projects need to be strengthened

Managing cities in this context requires new forms of engagement with cities and new approaches to financing.

Alternative financing sources for urban infrastructure projects

Linking to Finance

Capital Markets

Private Institutional

Investors

Multilateral, Bilateral &

Export Credit Agencies

Domestic Financial

Institutions

Asset Leverage

(land)

Private-sector Participation & Joint Ventures

Source: KPMG Analysis, Linking Cities to Finance: Overcoming Bottlenecks to Financing Strategic Urban Infrastructure Investments, 27-28 September 2010 , Shanghai, China

CDIA Climate Change Focus

Objective: Based on ongoing CDIA

activities and efforts of other

regional partners enable cities –

by offering an integrated support

package – to better formulate and

structure needed investments and

access finance within the

framework of emerging

international and national climate

change architecture

Key topic areas

CDIA Climate Change Focus

Regional Learning and Knowledge

Generation

Regional Expert Group Meetings

Partnerships with CC Organizations (e.g. Rockefeller Foundation/ACCCRN, UNHABITAT, ICLEI)

Private Sector engagement

Policy Dialogue

Building policy platforms on how cities could better access climate related financing in two or three priority countries (e.g. Bangladesh, India, Indonesia, Philippines, Vietnam)

City-level Support

Further define integrated climate related support offered to cities

Focused climate change related support to cities (e.g. in Bangladesh, China, India, Indonesia)

Capacity-building and training

efforts

“Menu” for cities to better mainstream climate related urban infrastructure investments

Regional cities and climate change training, in close partnership with GIZ and Singapore (MFA, SEI)

What can CDIA do for your city?

Institutional capacity strengthening for infrastructure investment planning and programming & financing.

CDIA uses tools to assist cities meet their urban planning and infrastructure goals Infrastructure Investment Prioritization The City Infrastructure Investment Programming and Prioritization Toolkit assists cities in undertaking a more structured approach to urban infrastructure planning, prioritization, and programming.

Pre-feasibility Studies The Pre-Feasibility Study Guidelines assist cities and consultant teams in formulating integrated, inclusive, and sustainable infrastructure projects.

Linking to Finance The Public-Private-Partnership Guide for Municipalities offers cities a basic understanding on where to begin a PPP process for the implementation of their strategic infrastructure investments.

CDIA Regional and National Partner Organizations Regional Partner Organizations

CityNet (South Korea) ICLEI – Local Governments for Sustainability Singapore Ministry of Finance United Cities and Local Governments Asia Pacific (UCLG-ASPAC) UN Habitat

National Partner Organizations INDIA CEPT University The Energy and Resources Institute (TERI) National Institute for Urban Affairs (NIUA) IDFC Foundation INDONESIA Yayasan Inovasi Pemerintahan Daerah (YIPD) Urban and Regional Development Institute (URDI) PT Sarana Multi Infrastruktur (SMI)

MONGOLIA Urban Development Resource Center (UDRC) NEPAL Town Development Fund (TDF) PAKISTAN Infrastructure Project Development Facility (IPDF) PHILIPPINES Department of Interior and Local Government (DILG) Public-Private Partnership Center (PPP)

SRI LANKA Sevanatha VIETNAM Development Strategy Institute (DSI) Urban Development (UDA)

CDIA City Interventions 92 Cities

70 PFS completed 11 PFS ongoing 46 Prioritization exercises 44 PFS linked to finance

7 Billion US$ expected infrastructure investment value

44 PFS linked to finance

ADB, 15, 37%

KfW, 2, 5%

LFI, 13, 32%

PPP, 6, 15%

WB, 3, 7%

Commercial borrowing,

1, 2%

Selected City Interventions

Cochin, India

Integrated Urban Transport Project with focus

on Water Transport

CDIA Support: US$ 370,000

Package Interventions

1. Ferry Services connecting Island

2. Priority Bus Lanes

3. NMT

4. Total package for more than USD 150 Million

Linking to Finance

KFW funding for 80 Millioin Euros in 2014

India City Interventions

Rajkot, India

CDIA Support: US$ 360,600

Sector Interventions

1. Urban Transport

− Improvements on selected main road corridors

− Central area improvement

− Bottleneck elimination

Investment Value: US$ 15.7 million

Environmental and Climate Change challenge included in the project

Linking to Finance

Internal Funds through State Government and Rajkot Municipal Corporation from 2011-2012

India City Interventions

Vijayawada, India

Integrated Urban Transport and Slum Upgrading

CDIA Support: US$ 450,000

Sector Interventions

1. Selected Corridor Development within the city Investment Value: US$ 40 Million

2. Non Motorised Corridor Development Investment Value: US$ 10 Million 3. Slum Improvement: US$ 16 Million Environmental and Climate Change challenge included in the project Linking to Finance

Potential Public-Private Partnership and external funding

India City Interventions

Chennai, India

CDIA Support: US$ 423,000

Sector Interventions

1.Review of City Development Plan – US$ 600 Million

2.Waterways Rehabilitation/riverbank protection - Investment Value: US$ 128.8 million

3.Solid Waste Management

Extension and improvement of SWM System

Investment Value: US$ 131 million

Additional focus on Climate Change intervention as part of the project

Linking to Finance

Potential KfW Funding

India City Interventions

Pimpri Chinchwad

Water and Sanitation

CDIA Support: US$ 450,000

Sector Interventions

1. Business Plan for water and Saniation Investment Value: US$ 100 million

2. Pre feasibility for 24/7 Water Supply Investment Value: US$ 50 million

3. Support to Instituional reforsm. Awareness and 24/7 pilot Investment Value: US$ 31.0 million Green water initiative through reduction in Non Revenue Water and water Loss in the distribution

Linking to Finance

Internal Funds, JNNURM and KfW

India City Interventions

Vishakhapatnam, India

Water Supply

CDIA Support: US$ 250,000

Sector Interventions

1. 24/7 water supply Investment Value: US$ 25 Million

2. Revision of the City Development Plan – US$ 400 million Green water initiative through reduction in Non Revenue Water and Improvement in Distribution System Linking to Finance

JNNURM or External funding

Pakse, Laos

CDIA Support: US$ 439,000

Sector Interventions

1. Drainage, Flood Protection and Sanitation Investment Value: US$ 25.6 million

2. Solid Waste Management Investment Value: US$ 1.8 million

3. Green Infrastructure Investment Value: US$ 6.2 million

Linking to Finance

ADB Pakse Urban Environmental Improvement Project

Selected City Interventions

Selected City Interventions

Naga, Philippines

Integrated Naga River Revitalization Project

CDIA Support: US$ 321,000

Sector Interventions

1. Urban Renewal (River walk) Investment Value: US$ 5.85 million

2. Wastewater Management, Drainage Investment Value: US$ 41 million

3. Flood Protection/Climate Change Adaptation Investment Value: US$ 12 million

Linking to Finance

Private sector development mixed with preferential borrowing

Selected City Interventions

Ulaanbaatar, Mongolia

CDIA Support: US$ 196,000

Sector Interventions

Energy efficient retrofitting of pre-cast panel apartment buildings Investment Value: 1st Phase: US$ 40 million Entire Program: US$ 450 million

Linking to Finance

Potential ADB funding

Cities Development Initiative for Asia Investing in Asia's urban future

Thank You