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CDIA Talks About Municipal Financing and How Cities May Benefit from Integrated Approaches to Financing Local Infrastructure

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In the run up to the Habitat III Conference of the United Nations in Quito, Ecuador, the Third Session of the Preparatory Committee was held on 25-27 July 2016 in Surabaya, Indonesia. The event brought together more than 4,000 participants from 142 countries to discuss crucial points in the New Urban Agenda to ensure integration of all facets of sustainable development.

CDIA, through its Program Coordinator Mrs. Claudia Hermes served as a resource person in the Urban Speaker Corner on 26 July 2016 between 4:30-5PM, wherein she talked about the importance of strengthening municipal financing and presented case studies from CDIA experiences.

In particular, CDIA presented its observation that financing for infrastructure had been traditionally sourced by the central government in the forms of grants and loans. Nowadays, however, cities are increasingly responsible for financing their infrastructure needs, despite their limited capacity to do so. More and more cities are also considering private sector financing in the forms of commercial debts, private equities, etc.

CDIA emphasized that for cities to effectively benefit from the full range of available financing sources for their infrastructure projects, they need to strengthen their capacities and competencies in infrastructure financing; as well as create an enabling framework to establish the rules and regulations for successful public-private engagements.

CDIA also shared two case studies that have successfully integrated and coordinated various approaches to financing local infrastructure projects.

As cities are now faced with the growing gap between meeting their infrastructure needs and the resources available to implement various infrastructure investment projects, it is crucial for them to be proactive and creative in looking for options to supplement their existing source of financing. Partnering with CDIA to identify and develop their investment projects, as well as link them up with potential financers could further help cities remain engines of growth and contribute to sustainable development.

 

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