Multilateral Development Banks (MDBs) have reaffirmed their commitment to scaling up and improving access to climate finance for cities. The recent roundtable, titled “Scaling Sustainable Investment in Cities: The Role of MDBs,” marked the third in a series of high-level meetings that began in 2023. These meetings aim to close the $4.5 trillion annual urban climate finance gap projected through 2030.
Two strategic priorities dominated the discussion: increasing urban climate finance and enhancing climate adaptation efforts, particularly in the Global South.
According to Professor Anyang’ Nyong’o, Governor of Kisumu, Kenya, meaningful progress hinges on robust partnerships between national and subnational governments. “We are on the frontlines, designing, delivering, and sustaining the solutions our communities need,” he said. “When MDBs invest in cities, they’re not just funding infrastructure, they’re investing in more resilient, inclusive, and empowered communities.”
Co-hosted by the C40 Cities Climate Leadership Group, the Global Covenant of Mayors for Climate and Energy (GCoM), and Bloomberg Philanthropies, the meeting marks a milestone in global efforts to align multilateral development with local climate needs.
Dr. Nasiphi Moya, Executive Mayor of Tshwane, South Africa, welcomed the banks’ willingness to listen and respond to cities’ funding needs. “This isn’t just about money. It’s about making a real impact in the lives of the billions who call cities home,” she emphasized.
The letter called for direct funding for city-led climate initiatives, alignment of urban needs with national and sectoral strategies, tailored climate programs, greater technical support for project preparation and implementation, and expanded access to public and private finance.
“We’ve had countless conversations and studies on the urgency of climate action. Now is the time to shift from talk to tangible implementation. As city leaders, we’re ready to lead, act, and take responsibility. All we need is support,” said Dr. Moya.
In response, MDBs in November 2024 pledged to scale up concessional funding, subnational lending, and de-risking instruments to attract private sector investment. They also committed to sharpening their focus on urban climate adaptation. Future meetings will outline concrete actions by MDBs, city networks, and local governments in preparation for COP30.
To raise awareness and build momentum, city leaders have also called on national governments and development finance institutions (DFIs) to increase public investment in urban climate finance to at least $800 billion annually by 2030. This appeal was launched during the 2024 U20 Summit in Rio de Janeiro and included in the U20 Communiqué delivered to Brazil’s President Lula.
Despite recent increases in investment, current public funding meets only 23% of the annual urban climate finance goal. “We urge MDBs to significantly increase funding for social and climate action. The time has come for national governments and financial institutions to recognize the vital role of local leadership,” said Governor Nyong’o. “Local governments can no longer be treated as secondary actors in the fight against the climate crisis.”
Juan Pablo Bonilla, Sector Manager of Climate Change and Sustainable Development at the Inter-American Development Bank, affirmed IDB’s commitment to scaling investments in urban infrastructure. “We aim to align financial flows with climate-resilient development and deploy risk-assessment tools to support cities in Latin America and the Caribbean,” he said.
These efforts also reinforce the work of the CHAMP coalition (Coalition for High Ambition Multi-level Partnerships), launched at COP28. The coalition includes over 75 national governments dedicated to collaborating with subnational actors in climate planning and implementation, including updates to Nationally Determined Contributions (NDCs) and long-term low-emission strategies.
Ambroise Fayolle, Vice President of the European Investment Bank, emphasized the importance of continued collaboration.
“As a member of the multilateral bank family, the European Investment Bank will stay the course,” he said. “We are committed to working with cities and mayors globally to support the development of urban climate strategies and projects that enhance community resilience and prosperity.”
Andrea Fernández, C40’s Managing Director of Climate Finance, Knowledge and Partnerships, underlined the urgent investment needs in clean energy, sustainable transport, and waste systems.
“Public investment by MDBs is essential,” she said. “It plays a catalytic role in helping cities unlock additional public and private capital to meet the $4.5 trillion needed annually to address the climate crisis.”
