Leveraging National Development Banks to enhance financing for climate-smart urban infrastructure

This report sets the stage to explore the mandate and capacities of National Development Banks in accelerating financing for local governments’ climate-smart urban infrastructure. Infrastructure financing needs have been estimated at USD 4.1-4.3 trillion per year from 2015 to 2030. An additional USD 0.4-1.1 trillion per year is required in making infrastructure low-emissions and climate-resilient. However, the benefit-cost ratio is about 4:1 for climate-resilient infrastructure. The World Bank estimates that investing USD 1 trillion in the incremental cost of making infrastructure more resilient in developing countries would generate USD 4.2 trillion in benefits. Yet there is a critical shortage in investment-ready climate-smart infrastructure projects and therefore an urgent need to invest more resources, particularly from National Development Banks (NDBs), into project preparation and feasibility.

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