Localizing Climate Finance, Mapping Gaps and Opportunities, Designing Solutions

Acting as an ongoing learning tool that presents a global overview of CCFLA members’ activities that are available worldwide, and support the development, financing and funding of subnational and local climate action, the report highlights the great diversity of financial and non-financial products and services developed – often in a joint thematic, sectoral or through constituencies collaboration – by CCFLA members, to support cities and regions climate smart investments in particular through project preparation (eg. funding and technical advisory services in project preparation phases; technical assistance for sustainable infrastructure planning and financial design; existing funding and financing lines and programmes; resilience and sustainability standards and certifications for market integration; environmental, social and governance assessment tools; training packages for readiness; etc.).

In line with CCFLA’s five key recommendations addressing the financial gap for Local and Regional Governments (LRGs), the Mapping presents an analysis of the global range of initiatives that contribute to:

• Overcome the Project Preparation gap by providing capacity building solutions on strategy and planning or adapted technical assistance to local and regional government’s administration;
• Support matchmaking opportunities and set pipelines of fundable projects;
• Support LRGs to access banking and capital markets;
• Channel climate finance to local & regional levels through an integrated approach;
• Encourage the mainstreaming of resilience and sustainability in overall LRGs climate action or in the project design; Develop innovative financial engineering to better mobilize private financing.

About 180 initiatives were identified of which 89 were mapped out targeting specifically the urban, subnational and climate nexus, their analysis reveals that: CCFLA members are leading a total of 27 Project Preparation Facilities (PPFs) with 15 of these PPFs being urban-specific while 25 PPFs operating directly at the project or sub national level. The subnational level of action is being increasingly acknowledged with a growing number of international coalitions including subnational and/or a city dimension to their action. A recent and growing commitment from CCFLA members with 50% of the initiatives which started to be operational less than 2 years ago. Leading or co-leading 50% of the initiatives mapped, Multilateral Development Banks (MDBs) and bilateral or national Development Finance Institutions (DFIs) demonstrate they are leading the movement towards the localization of climate finance. They play therefore a pivotal role in building financing models for resilient infrastructure and a growing trend, within central governments’ instruments, in better integrating subnational stakeholders in the implementation of NDCs.

The Mapping of CCFLA members’ initiatives supporting cities and regions financing of climate action represents a strategic step in reinforcing data production and analysis, converging of efforts, and cooperation among CCFLA members, as well as with other key climate finance stakeholders and coalitions.