City planners and urban project developers can raise more money for climate adaptation by better aligning climate planning and finance functions, among other recommendations in new report by C40 Cities.
“Adaption finance can be unlocked when cities approach projects with financial risk-return clarity, and when financiers engage as long term partners in structuring solutions,” said C40, a global network of mayors from the world’s leading cities.
The organisation’s new report found that current adaptation finance flows fall far short of what cities need to become more climate resilient.
“Cities are the front lines of the climate crisis, yet the lack of accessible finance remains the single greatest barrier to action,” said Andrea Fernández, managing director of climate finance at C40 Cities.
The report includes several recommendations, which include developing clear adaptations strategies and investment pipelines to create strong demand signals. Urban planners and policymakers should also engage with private investors early in project design to ensure scale and bankability.
Another recommendation is for government stakeholders to build partnerships with the private sector to align on risks, returns and shared benefits.
Policymakers can also look into developing viable monetisation pathways including tariffs, land value capture and blended finance structure.
The C40 report also recommended investing in project preparation capacity and strengthen transparency and reporting frameworks to bring projects to market and maintain investor confidence.
Adaptation finance investment is urgently needed as climate risks affect a country’s mortality rate. By 2035, developing countries will need US$310–400 billion annually for climate adaptation. In Asia, 95 out of 300 cities in the region will experience an increase in temperature-related mortality. People living in heavily populated areas will be the most vulnerable.
According to C40 Cities, city policymakers can encourage businesses to assess climate-related risks and invest in adaptation so that companies to discover their own investment opportunities for adaptation.
Examples of successful local climate initiatives highlighted in C40 Cities’ report includes the SMART Tunnel in Kuala Lumpur, Malaysia, which demonstrates how large-scale flood infrastructure can be delivered with private sector financing and expertise. The dual purpose tunnel provides stormwater diversion during extreme rainfall and acts as a tolled motorway during normal conditions, generating user-fee revenues.
Another example is the Nhieu Loc–Thi Nghe canal restoration in Ho Chi Minh City, Vietnam, which catalysed private real estate investment to reduce flood risk while improving drainage and sanitation. The canal rehabilitation was initiated by local government and supported by the World Bank, offering a model of indirect private sector involvement.
