Daily CSR
Daily CSR

Daily CSR
Daily news about corporate social responsibility, ethics and sustainability

Financing Sustainable Urban Infrastructure Would Create An Economic Boost


Cities are the future, therefore it is important to invest in them sustainably while bridging the finance gap for building the infrastructure.

Vikas Vij reports that in the coming fifteen years’ time cities will be home to over “two-thirds of total investment infrastructure”. In fact, by the year of 2050, it is said that sixty six percent of the total population of the world will be residing in urbanised areas, while around more eight hundred million people will be “living in cities” even in Africa.
Until the year of 2030, estimation show that there is an annual demand and supply gap of “$1 trillion” that requires to bridge the gap of the infrastructure and the “needs of a growing urban population”. Therefore, it would be wise to invest in creating efficient cities that are “connected” and made more ecological with “sustainable public transport systems”, whereby boosting the growth of economy with a positive environment impact.
The New Climate Economy’s research show that if we invest in “sustainable urban infrastructure”, whereby looking into public transport, managing waste, and building efficiency energy worth “$16.6 trillion” could be saved by the year of 2050.
Moreover, the next important issue to solve is to find ways of scaling up the finance for creating “more sustainable urban infrastructure” and for this the first step would be to make private finance sector more accessible to the cities by “improving their creditworthiness”. Presently, in the developing countries among the total five hundred “largest cities”, only four percent are “creditworthy”, therefore the ability of the rest for raising capital gets majorly hampered.
If the private sectors pitch in for investments and “right policies” are put in place then almost fifty percent of financial crunch in the infrastructure development of the cities can be taken care of. While Vikas Vij also adds that:
“Municipal green bonds are another way to attract capital. The municipal green bond market is relatively small, but fast growing. Last year, in the biggest issuance yet, Seattle's Sound Transit sold nearly $1 billion of green bonds that will help fund regional transit projects”.
Another way to boost financing is to encourage private-public partnerships like that of “Bangkok's Skytrain and Bogota's Bus Rapid Transit”, whereby both were partly financed in this manner. Moreover, “international climate funds” and “multilateral development banks” could also play a role in developing countries. Likewise, the “Global Environment Facility” has come up with a new programme worth “$140 million” and the pilot twenty two cities are “expected to leverage $1.4 billion for smart urban development”.
According to Vij:
“City-level action works best when supported by national policies that place urban infrastructure at the heart of economic development. A new global initiative – the Coalition for Urban Transitions, with experts from more than 20 of the world's leading urban-focused institutions – will help support national governments to develop these strategies”.
There are several “city networks” like “C40 Cities Climate Leadership Group, ICLEI-Local Governments for Sustainability, and United Cities and Local Governments” which could share their “best practices, spread new technologies, facilitate new forms of finance and support project preparation”.