Global Review of Finance For Sustainable Urban Infrastructure

The overall aim of the work programme on Financing the Urban Transition is to empower national decisionmakers with the knowledge and tools to better unlock, direct, and facilitate urban finance. Doing so will enable compact, connected urban infrastructure that supports sustainable development.

This paper is a background review representing part of the initial phase of the Financing the Urban Transition work programme. The review builds on a growing body of research that highlights both the importance of national sustainable infrastructure and the need to develop more effective and efficient financing mechanisms for delivering compact, connected cities that meet the UN’s Sustainable Development Goals. While progress has been made in both these areas over the last five years, there remains a policy gap between the international/ national level and the municipal level. In a survey of around 100 cities worldwide, LSE Cities found that 55% of municipalities identified lack of public funding as a major barrier to sustainable urban growth, while 50% cited insufficient national support. Furthermore, in previous New Climate Economy (NCE) research, few countries were found to have comprehensive strategies for urbanisation, while international funders have traditionally not invested in sustainable urban infrastructure projects.

Given this policy gap between levels of government, this review focuses mainly on the role of national governments and the international community in unlocking, directing, and facilitating finance flows that can deliver sustainable urban infrastructure.