Framework agreement to support the Cities Finance Facility: Capacity Development for the financial feasibility of urban climate infrastructure projects in energy, mobility and waste sectors_Lot 1

The Climate Resilient Investment in Cities (CIVIC) programme platform is a global project embedded in the policy field of "Sustainable Urban Development". It offers partner cities in the focus regions of Africa, Asia and Latin America a holistic range of support along the value chain of sustainable urban infrastructure, including a link to finance sources. The implementation of CIVIC consists of the Cities Finance Facility (CFF) and the Covenant of Mayors in Sub-Saharan Africa (CoM SSA) initiatives. It is carried out in strategic partnership with the international city networks C40 and CoM SSA.

The CFF facilitates access to finance for climate change mitigation and adaptation projects in urban areas by providing technical assistance to develop cities" climate action priorities into finance-ready investment proposals. The CFF delivers technical-financial project preparation in accordance with IFC Performance Standards. Beyond, the CFF supports its partner cities in linking their projects to finance. Finally, the CFF has a strong focus on capacity development amongst City´s employees and fosters knowledge sharing.

The project preparation facility is funded by the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Foreign, Commonwealth and Development Office (FCDO). The fourth phase of CFF is starting in November 2024 and is expected to end in December 2027 with an estimated budget of EUR 20m and the possibility of an extension. Implementation will be in cities of the C40 network and other cities in ODA-recipient countries in Africa, Latin America, and Asia.

The CFF is implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH together with the C40 Cities Climate Leadership Group (C40).

Problem and potential analysis, program objective and description of the area of intervention

Cities play a crucial role in reducing greenhouse gas emissions and promoting resilient development. In particular, the urban sectors of mobility, the generation of renewable energy, but also the waste sector are key for a sustainable transformation of cities in terms of a socially just transition.

However, Cities frequently lack the requisite investment and financing resources to implement resilient, climate-friendly and socially just infrastructure. Furthermore, many cities face high challenges to develop robust and ready-to-finance infrastructure project proposals. As a consequence, cities often fail or even do not search for project funding. Thus, they do not capitalize on potential GHG reductions through tangible development projects, ultimately do not achieve a sustainable and just transition. The potential of cities and urban areas as effective actors in the implementation of the Paris Climate Agreement and the achievement of the global Sustainable Development Goals is not being used.

Area of intervention: The CIVIC programme platform supports cities and urban areas in ODA-eligible countries worldwide in the preparation of sustainable infrastructure projects until they are ready for financing in a demand-oriented and application-based manner. The CFF initiative implemented under CIVIC focuses on the three world regions of Africa, Asia, and Latin America.

Infrastructure projects include the sectors of transport, energy, and waste, which contribute to the avoidance or reduction of CO2-equivalent greenhouse gases (mitigation). The selection process of partner cities for these infrastructure projects is closely coordinated with CFF donors and implementing partners within the framework of a joint steering group.

The present tender applies to the following outputs:

Output 1: Partner cities are better positioned to develop climate-friendly, resilient, and inclusive urban development plans and strategies.

Output 2: Finance-ready, climate-friendly, resilient and inclusive infrastructure projects are developed by partner cities in accordance with international standards for sustainable infrastructure.

Output 3: The individual, organisational and institutional capacities of the partner cities with regard to linking climate-friendly, resilient and inclusive infrastructure projects to finance are improved.

Output 4: The enabling framework for the preparation and financing of resilient, climate-friendly and inclusive urban infrastructure has improved at the (sub)national level.