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Climate Finance Climate Finance

Explainer: How to finance urban infrastructure?

Cities across the world need more and higher-quality infrastructure. However, many cities struggle to find the right finance to realise their projects. The potential relative benefits of financing through the public sector, the private sector, and international organisations are unclear. City governments often lack the capacity to assess these relative benefits, to access the range of finance options, and to determine the most appropriate ways of funding the infrastructure – both the initial construction, as well as the operation and maintenance. These shortfalls result in less sustainable projects, some of which can become a significant burden for citizens.

The Explainer answers the following questions:

  • What are the basic options for urban infrastructure finance?
  • What financing can be provided through the private sector?
  • What additional financing can be provided through the public sector?
  • What additional financing can be provided through international organisations?
  • What options exist for funding urban infrastructure?
  • What capacities do city governments need to effectively use the described financing and funding options?