UN Organizations Work Jointly to Finance Cities as an Accelerator of the Sustainable Development Goals (SDGs)
The United Nations Human Settlements Programme (UN-Habitat) and the United Nations Capital Development Fund (UNCDF) have announced the launch of the Cities Investment Facility as part of a partnership between the two organizations.
As part of a Memorandum of Understanding signed April 27th 2022 by the two organizations, UN-Habitat and UNCDF will jointly implement the Cities Investment Facility (CIF), which is designed to support investment in small and intermediary cities, as well as develop and deploy innovative financial models. The Cities Investment Facility will play a critical role in advancing sustainable financing at the local/subnational level, where the vast majority of services that support sustainable development are delivered.
UNCDF and UN-Habitat will aim to raise USD 40 million over the next four years to support the programming, operations and technical support needed to finance the partnership. The goal of both organizations under the partnership is to reach 250 cities through their sustainable finance support by the year 2025.
UN-Habitat and UNCDF announced the partnership during an event held on the sidelines of the 2022 Forum on Financing for Development—the UN’s high-level convening on financing the implementation of the global Sustainable Development Goals (SDGs), which preceded the UN General Assembly High Level Meeting on the New Urban Agenda – the UN’s blueprint for sustainable urban development.
UN-Habitat Executive Director Maimunah Mohd Sharif stated, “Today we are delighted to join forces with UNCDF in a Fused Offering for Cities. Through this offering, cities in developing and emerging economies will be supported to build effective own source revenue and public financial management systems, supported to prepare SDG impact projects and supported to reach local and international investment partners that will enable their delivery”. Added UNCDF’s Executive Secretary Preeti Sinha: “The partnership between UN-Habitat and UNCDF will look to leverage each organization’s distinct strengths in order to support sustainable finance at the local level”.
Through this offering, cities in emerging and developing economies will be supported to build effective own-source revenues and public financial management systems supported to prepare high impact project that can be financed and reach local and international investors to deliver the SDG’s impact.
The United Nations Human Settlements Programme, UN-Habitat, is the United Nations agency working for a better urban future. It is mandated by the UN General Assembly to promote socially and environmentally sustainable towns and cities with the goal of providing adequate shelter for all. Cities are facing unprecedented demographic, environmental, economic, social and spatial challenges. There has been a phenomenal shift towards urbanization, with 6 out of every 10 people in the world expected to reside in urban areas by 2030. Over 90 per cent of this growth will take place in Africa, Asia, Latin America, and the Caribbean. In the absence of effective urban planning, the consequences of this rapid urbanization will be dramatic. In many places around the world, the effects can already be felt: lack of proper housing and growth of slums, inadequate and out-dated infrastructure – be it roads, public transport, water, sanitation, or electricity – escalating poverty and unemployment, safety and crime problems, pollution and health issues, as well as poorly managed natural or man-made disasters and other catastrophes due to the effects of climate change. Mindsets, policies, and approaches towards urbanization need to change in order for the growth of cities and urban areas to be turned into opportunities that will leave nobody behind. UN-Habitat, the United Nations programme for human settlements, is at the helm of that change, assuming a natural leadership and catalytic role in urban matters. Mandated by the UN General Assembly in 1978 to address the issues of urban growth, it is a knowledgeable institution on urban development processes, and understands the aspirations of cities and their residents.
The United Nations Capital Development Fund, UNCDF, is a technical and financial partner for local transformation. Its clients encompass local and regional governments, cities as agencies of local transformation, domestic capital market participants and regulatory and budgetary authorities. UNCDF combines finance and investment instruments with sector expertise across all aspects of subnational public and private finance. To this end, UNCDF offers its clients financing and policy expertise in three overlapping transitions: (a) the urban transition to implement the New Urban Agenda that transforms cities into inclusive, sustainable and resilient places with everyone benefiting from growth, access to transport, housing, water and sanitation, green space and the “right to the city”; (b) the green transition; and (c) the productive transition. UNCDF designs, pilots and tests out financing mechanisms and business models in both public and private sectors that support locally designed public investments and revenue generating capital investment projects. The investment financing toolboxes include fiscal decentralization, local development funds for public capital investment programming, structured project finance, municipal finance, SME Finance, and Public-Private Partnerships.