The International Finance Corporation (IFC), the private sector arm of the World Bank, has entered into an agreement with the government of Switzerland to kickstart the second phase of the Sustainable Cities programme. This strategic collaboration aims to support the development of green urban infrastructure in emerging markets.
The IFC’s Sustainable Cities programme is designed to provide vital assistance to subnational governments and private sector partners. It will enable them to attract crucial investments and financing for essential urban infrastructure projects across various sectors. These sectors include transport, water, wastewater, solid waste, and district energy. This programme, which is slated to run from 2023 to 2027, has set an ambitious goal of facilitating over $500m in commercial financing for sustainable urban projects. This will be accomplished through non-sovereign loans, municipal bonds, and public-private partnerships (PPPs).
Switzerland’s sustainable cities
Switzerland’s State Secretariat for Economic Affairs (SECO) is contributing $19m in support, adding to its previous backing of the programme. This new funding builds upon the success of the first phase of IFC’s Sustainable Cities programme, which facilitated almost $400m in financing between 2018 and 2022. The programme’s achievement has significantly improved urban infrastructure services, with 87% of the investments directed towards climate-related projects. More than 1.7 million people have benefited from the programme, which financed projects in more than ten cities worldwide, including Bogota, Casablanca and Ekurhuleni.
Dagmar Vogel, head of the infrastructure financing division at SECO, expressed excitement about the renewed partnership with IFC, stating in a release, “IFC’s Sustainable Cities programme 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.”
Adapting to climate change
The programme is closely aligned with the World Bank’s new climate change action plan. This plan is designed to increase climate finance, strengthen climate change adaptation, and align financial flows with the Paris Agreement on Climate Change. The second phase of IFC’s Sustainable Cities programme also aligns with IFC’s broader strategy to unlock new markets, develop bankable projects, and mobilise private sector solutions and investments in emerging markets. This effort further supports the delivery of IFC’s other flagship initiatives in urban infrastructure, including Utilities for Climate (U4C) and Circularity Plus.
Part of the funding from SECO will be dedicated to supporting Ukraine’s reconstruction efforts. This will help the government identify opportunities to leverage donor and public funds while catalysing private investment.
Sumeet Thakur, IFC’s global head for cities, water and waste, emphasised the significance of the Sustainable Cities programme, stating, “Cities and metropolitan areas remain powerhouses of economic growth. However, they face a series of challenges in the context of rapid urbanisation and climate change. These challenges have amplified existing urban issues and need to be addressed through ramped-up investments in sustainable infrastructure, including subnational borrowing and public-private partnerships.”
[Read more: The cities adapting best to climate change]
