Cities account for more than half the global population and around 80% of GDP and are therefore crucial to the transition to a low-carbon economy. They present an opportunity to scale up investment in sustainable urban solutions through the development of innovative business models, as cities often act as test-pilots for new technology. Key sustainability issues for cities include inefficient buildings, traffic congestion, inadequate urban infrastructure and a lack of basic services, such as water supply, sanitation, and waste management.
In order to bridge the gap between the demand for infrastructure and the ability of sub-national authorities to deliver public services, private financing will be vital. Local governments are often facing restricted funds for developing bankable projects, limited financing instruments and mechanisms and a lack of creditworthiness. Multilateral Development Banks (MDBs) are playing an important role in addressing those challenges by bringing local governments to the point of being able to access capital markets by building capacity through technical assistance.