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Financing Energy for Low-carbon Investment - Cities Advisory Facility (FELICITY)

As of: November 2019

Objective and activities

The emissions mitigation potential of sustainable energy systems in cities cannot be realised despite an increase in the supply of financial instruments. Cities and municipalities in developing countries often lack the knowledge, capacities for the development of bankable projects as well as adequate framework conditions for the fulfillment of international loan requirements. The Gesellschaft für Internationale Zusammenarbeit (GIZ) and the European Investment Bank (EIB) plan to establish an Advisory Facility at the EIB with the aim to address these challenges. FELICITY supports the implementation of mitigation measures in cities and communities by: 1. Demand-oriented consulting for cities to acquire and use funds; 2. Capacity building in local governments; 3. Policy advice at national level on framework conditions for international climate financing; 4. Knowledge management on financing mechanisms; Development of relevant instruments and methodologies (e.g. Nationally Determined Contributions/NDC). 

State of implementation/results

Approval by BMU for technical support for five projects in Mexico and Brazil via FELICITY following the meeting with EIB and GIZ on 10 July 2018 in Berlin. Technical assistance started in August 2018.

  • Brazil: Following FELICITY's successful identification of three urban mitigation projects, the EIB has extended the framework loan with the local partner bank in Brazil by an additional EUR 30 million. China: Urban infrastructure projects can no longer be financed through direct loans from cities in order to limit the size of public debt. Therefore, FELICITY will only be eligible for projects from state-owned enterprises. Further framework conditions make it difficult to identify projects with an international financing option, mainly due to increasing restrictions on EIB financing by the EU (trade disputes) and minimum loan size of EXIM Bank (< EUR 40 million). At the same time, KfW is preparing a framework loan to EXIM Bank; this may provide FELICITY with new starting points.

Project data

worldwide, Brazil, China, Mexico

Implementing organisation:
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

Partner institution(s):
  • Ministry of Cities Brazil, Secretariat of Finance and Public Credit (SHCP) - Mexico
  • European Investment Bank

BMU grant:
€ 5,600,000

03/2017 till 02/2020