WUF9 Networking Event: Empowering Cities to Implement the 2030 Agenda and New Urban Agenda: Finance and Partnerships for Sustainable Infrastructure in Asia Pacific
The international community has adopted two bold agendas to address urbanization: The 2030 Agenda for Sustainable Development and the New Urban Agenda (NUA). Many governments are moving forward to support the integration of these global agreements into sub-national development plans. A major challenge of these agendas, however, is lack of long-term, scalable finance to support local actions. Many local governments, especially in countries with special needs, struggle to provide their citizens even with the most basic infrastructures and services. Often, they lack the authority that only higher-level governments have to finance the infrastructures and services needed to cope with rapid urbanization.
According to recent estimates from the Asian Development Bank (ADB), meeting the infrastructure needs of Asia and the Pacific alone will require annual investments of around $1.7 trillion from 2016 to 2030 or $26 trillion in total. This annual estimate is more than double the $750 billion estimated in 2009 (ibid). This increase is due to continued rapid growth as well as the costs associated with climate mitigation and adaptation leading to a current infrastructure investment gap of 2.4 per cent of projected GDP for the period from 2016 to 2020 (ibid). This infrastructure gap is particularly evident in secondary cities ranging from 150,000 to five million people, which are the fastest growing urban areas, and likely to double or triple in population in the next 15 to 25 years. However, these cities often depend on financial transfers from their national governments, which are insufficient to ensure sustainable infrastructures and services for a growing urban population.
This lack of municipal finance stands in contrast to the increasing responsibilities and demands that local governments are expected to meet. Achieving the 2030 Agenda and the NUA requires local governments to ensure that every citizen has access to services and that their provision is safe, affordable and sustainable paying particular attention to the needs of vulnerable groups. The Addis Ababa Action Agenda (AAAA) emphasizes municipal finance, saying that investments in sustainable development will need to be made at the sub-national level, which often lacks much needed financial, technological and institutional capacities. Municipal finance can help control unplanned urban growth and mitigate the effects of climate change, preparing cities better for both natural and man-made hazards. It can also have positive effects on economic growth, revenue collection and ensure long-term competitiveness, bringing benefits which will eventually outweigh the costs. Hence, local governments need to receive access to diverse sources of finance and be enabled to make long-term investments in sustainable urban development.
However, finance for sustainable urban infrastructure is hindered by many of the same barriers faced by sustainable infrastructure in general including market failures and short-term thinking. Many cities around the world are constrained in their ability to retain local revenue sources, take on debt, capture the full value of land and engage in public-private partnerships (PPPs). There are also financing challenges that are specific to urban infrastructure. National and local policies may not always be aligned, creating conflicts, which for investors present regulatory uncertainty. Cities often have limited capacities to plan, finance and oversee large urban infrastructure projects.
In this context, the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) and the United Nations Human Settlements Programme (UN-Habitat) will jointly convene this 60-minute networking event as a regional contribution to financing the implementation of the 2030 Agenda and the NUA in Asia and the Pacific.
This networking event will present the findings of new research commissioned by UNESCAP which provides an analytical basis for dialogue with city and national governments to leverage their resources through longer tenor debt and equity financing of urban infrastructure. The research draws on experience from developed and developing countries in raising private debt and equity for financing urban infrastructure and identifies appropriate policy actions for a financing in the Asia-Pacific region.
The event will have the format of an interactive discussion among decision-makers and prominent stakeholders from Asia and the Pacific – with a focus on showcasing challenges and opportunities for countries with special needs and providing an open space for voices from civil society. The event aligns with this year's theme of the World Urban Forum “Cities 2030, Cities for All: Implementing the New Urban Agenda” which places the focus on the NUA as a tool and accelerator for achieving the 2030 Agenda in and by cities.