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New financing options for climate-resilient urban infrastructure

Globally, cities need to invest US$57 trillion in infrastructure in order to accommodate both their existing needs and projected growth. To finance this, a global effort by nations, banks, cities and the private sector is needed, according to a new report by Siemens, C40 Cities Climate Leadership Group (C40) and Citi.
Launched today at the World Cities Summit 2016 in Singapore, “New Perspectives on Climate Finance for Cities” provides insights on potential financing options for climate change programs and projects in cities, the lead times and steps required to access different types of climate finance, and the lessons learned from cities around the globe.
"Following the historic Paris climate agreement, we must now take bold action to protect our planet for future generations. The only way to do this is dramatically increasing climate financing and attracting more investments," said Mr. Seth Schultz, C40’s Director of Research, Management and Planning. "By providing an introduction for cities seeking to understand climate finance options, this report is a first step in that direction. It identifies possible routes for supporting climate-related projects and programs, including bonds, where the market in labeled green bonds has risen substantially from $0.8 billion in 2007 to $42 billion in 2015."
Transformative financing options
To maximise impact, the report recommends six innovative financing mechanisms – and likely finance providers - for mobilising investment for cities and looks at the benefits and challenges of each approach.
1. Emission trading schemes: According to the report, 12 percent of global greenhouse gas emissions are covered through regional, national and sub-national trading schemes. Whilst emissions trading schemes offer flexibility, they can be vulnerable to unexpected economic impact.
2. Green bonds are useful for funding large infrastructure or aggregated programs over the medium to long term. In fact, many cities are now looking at issuing their own green labeled bonds following the pioneering efforts of Gothenburg and Johannesburg.
3. International Financial Institutions (IFI) and agency finance have broad policies to support certain sectors and market development. In some cases, IFIs may invest in projects that are considered too risky by commercial banks.
4. International and regional climate funds: The Green Climate Fund, for example, has over US$10 billion to invest in the developing world. More city governments are also establishing their own funds to attract other sources of financing to private sector projects.
5. City government-backed funds can de-risk or open up new markets where the private sector is unwilling to lend directly on its own. With this approach, cities can ensure that funding is directed towards their own priorities.
6. Equity capital: Institutional investors alone are managing US$71 trillion of assets in the OECD. Some cities are providing equity to projects to encourage further private sector funding as debt or equity.
"New financing models can support sustainable infrastructure development and corresponding investments in cities," said Mr. Kenneth Hsi Jung Koo, Deputy General Manager and Citi Chief Representative, Citi Orient Securities. "The key is to understand and embrace new approaches to infrastructure and devise enabling financing solutions that will benefit each city according to its specific needs and economic situation."
The scaling up of climate finance is an iterative process which requires national governments to create conducive strategies, policies, and regulatory frameworks to allow public-private collaborations.
Underscoring the importance of partnerships, Mr. Martin Powell, Head of Urban Development at Siemens Global Center of Competence for Cities, said: “This joint report between C40, Citi and Siemens, provides a spring board for urgently-needed financing solutions and captures the synergistic efforts of the most innovative climate actions taken by cities around the world. Siemens has been instrumental in driving successful infrastructure projects around the world by providing business-to-business financial solutions and intelligent infrastructure to cities."

About C40 Cities Climate Leadership Group
The C40 Cities Climate Leadership Group connects more than 85 of the world’s greatest cities, representing 650 million people and one quarter of the global economy. Created and led by cities, C40 is focused on tackling climate change and driving urban action that reduces greenhouse gas emissions and climate risks, while increasing the health, wellbeing and economic opportunities of urban citizens. The current chair of the C40 is Rio de Janeiro Mayor Eduardo Paes; three term Mayor of New York City Michael R. Bloomberg serves as President of the Board. C40’s work is made possible by our three strategic funders: Bloomberg Philanthropies, Children’s Investment Fund Foundation (CIFF), and Realdania. To learn more about the work of C40 and our cities, please visit or follow us on Twitter @c40cities.

About Citi
Citi, the leading global bank, has approximately 200 million customer accounts and does business in more than 160 countries and jurisdictions. Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerages, transaction services, and wealth management.

Additional information may be found at | Twitter: @Citi | YouTube: | Blog: | Facebook: | LinkedIn:

About Siemens
Siemens AG (Berlin and Munich) is a global technology powerhouse that has stood for engineering excellence, innovation, quality, reliability and internationality for more than 165 years. The company is active in more than 200 countries, focusing on the areas of electrification, automation and digitalization. One of the world’s largest producers of energy-efficient, resource-saving technologies, Siemens is No. 1 in offshore wind turbine construction, a leading supplier of gas and steam turbines for power generation, a major provider of power transmission solutions and a pioneer in infrastructure solutions as well as automation, drive and software solutions for industry. The company is also a leading provider of medical imaging equipment – such as computed tomography and magnetic resonance imaging systems – and a leader in laboratory diagnostics as well as clinical IT. In fiscal 2015, which ended on September 30, 2015, Siemens generated revenue of €75.6 billion and net income of €7.4 billion. At the end of September 2015, the company had around 348,000 employees worldwide. Further information is available on the Internet at

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