The International Finance Corporation (IFC), the private sector wing of the World Bank, has entered into a contract with Switzerland’s government to initiate the next phase of the Sustainable Cities program. This initiative promotes the growth of eco-friendly urban infrastructure within emerging economies.
Offering support to regional governments and private industry partners, the Sustainable Cities program of IFC aids in drawing investments and financing for various urban infrastructure endeavours.
The areas covered include transportation, water supply, wastewater management, solid waste management, and district heating and cooling. Spanning from 2023 to 2027, the initiative targets the facilitation of over $500 million in commercial financing through mechanisms such as non-sovereign loans, municipal bonds, and public-private partnerships (PPPs).
Complementing its previous contributions, Switzerland’s State Secretariat for Economic Affairs (SECO) will be investing $19 million.
Building on the achievements of its initial phase, IFC’s Cities program managed to secure nearly $400 million between 2018 and 2022 to enhance services in urban infrastructure.
A significant portion, 87%, of this program’s total went toward climate-related ventures. More than 10 cities have benefited, reaching over 1.7 million inhabitants, such as in Bogota, Colombia; Casablanca, Morocco; and Ekurhuleni, South Africa.
Additionally, IFC extended comprehensive advisory services to almost 30 partners and launched tools like the Advanced Practices for Environmental Excellence in Cities (APEX) and the E-Bus Toolkit, enhancing their offerings for climate-resilient urban infrastructure needs.
Dagmar Vogel, Head of Infrastructure Financing Division at SECO said, “IFC’s Sustainable Cities program is well-aligned with our priority development areas and our mission to support green urban infrastructure in emerging markets,”
“We are pleased to renew our long-standing partnership with IFC, demonstrating SECO’s strategic approach to engaging the private sector in key partner countries and regions.”
This initiative aligns with the World Bank’s recent climate change action plan, aiming to boost climate finance, reinforce climate adaptation, and align financial activities with the Paris Agreement.
The program’s new phase fits into IFC’s broader strategy to access fresh markets, cultivate feasible projects, and stimulate private sector solutions and investments within emerging markets. This strategy complements other IFC urban infrastructure projects such as Utilities for Climate (U4C) and Circularity Plus.
Part of the funding from SECO is earmarked to support Ukraine’s rebuilding efforts, aiding the government in identifying ways to utilise donor and public resources, and spurring private investment.
Sumeet Thakur, IFC’s Global Head for Cities, Water, and Waste said, “Cities and metropolitan areas remain powerhouses of economic growth. However, they face a series of challenges in the context of rapid urbanization and climate change. These challenges have amplified existing urban challenges and need to be addressed through ramped-up investments in sustainable infrastructure, including subnational borrowing and public-private-partnerships.”
Source : Tradefinanceglobal