City Climate Finance Gap Fund II - EIB

Cities and municipalities are facing various challenges in developing and implementing climate change mitigation projects and range from increasing debt and budgetary constraints to inadequate credit ratings. In addition to financial constraints, local authorities often do not have sufficient capacities for planning, designing, preparing, and implementing projects. The City Climate Finance Gap Fund intends to fill this gap. It provides direct support at an early stage of project preparation to cities in low and middle-income countries that have already made commitments in line with the Paris Agreement. The City Climate Finance Gap Fund is expected to mobilize more than €100 million for the preparation of climate projects. This financial support aims at facilitating a pipeline of low carbon and climate-resilient infrastructure projects with a total value of at least €4 billion.

Project data

IKI funding
15,000,000.00 €
Duration
11/2020 till 06/2025
Status
open
Implementing organisation
European Investment Bank
Implementing Partner
  • Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH

State of implementation/results

  • The Global Covenant of Mayors for Climate & Energy together with the governments of Germany and Luxembourg announced the establishment of the City Climate Finance Gap Fund at the UN climate summit in September 2019. Both governments are providing grants totaling EUR 55 million (Germany: EUR 45 million, Luxembourg: EUR 10 million).
  • One year after its operational launch, the Gap Fund has received over 140 expressions of interest and approved technical support for 33 cities in 19 developing and emerging countries. An additional 30 cities are currently undergoing a detailed assessment for potential Gap Fund support.
  • 227 participants took part in four webinars in the first half of 2021, in which an introduction to the work and funding opportunities of the Fund were given ("Get to know the Gap Fund").
  • Development of technical notes on Greenhouse Gas (GHG) emissions inventories, Urban GHG modelling tools and urban form and GHG emissions.
  • Official establishment of the Gap Fund at the UN Climate Week on 23 September 2020.
  • The Gap Fund supports project preparation activities for low-carbon and resilient urban infrastructure projects in cities by pursuing the following three main objectives:
    • Capacity building: Improving capacity of cities and municipalities for the development of high-quality project ideas as well as support for project preparation;
    • Pipeline building and technical support: Building a solid portfolio and business opportunity for organizations with a focus on providing technical support for project preparation; and
    • Pipeline development for investors: Scaling of pipelines for bankable projects.

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