Multilateral Development Banks (MDBs) convened to discuss plans to scale up and improve access to climate finance for cities. The roundtable “Scaling Sustainable Investment in Cities: The Role of MDBs” marked the third in a series of meetings that go back to 2023, aimed at enhancing the role of MDBs in closing the urban climate finance gap, which currently stands at $4.5 trillion annually through 2030.
This gathering, convened by the C40 Cities Climate Leadership Group, the Global Covenant of Mayors for Climate and Energy (GCoM), and Bloomberg Philanthropies, represents an important milestone in efforts to bridge the gap between current levels of urban climate investment and what cities truly need.
This meeting marks another step in the ongoing collaboration between MDBs and cities to scale up urban climate finance and increase urban adaptation. In March 2024, more than 40 mayors from over 30 countries signed an open letter calling for MDBs to include urban climate action and finance in their climate, corporate and country strategies. The letter also called for direct support for city-level climate initiatives, integration of urban needs into national and sectoral assistance, the development of tailored urban climate programs, increased technical support for project preparation and implementation, and the scaling up of both MDB and private finance.
The banks’ response in November 2024, expressed support for the mayors’ call to action and reiterated their commitment to accelerating climate finance to cities through concessional funds, subnational lending, and derisking instruments to leverage private sector investment. The institutions also said they aim to sharpen their focus on urban climate adaptation. Subsequent meetings will determine what actions MDBs, city networks and cities can take together, with a view to demonstrate progress in time for COP30 at the end of the year. This week’s convening was led by Anyang’ Nyong’o, Governor of Kisumu, Kenya, and Dr. Nasiphi Moya, Executive Mayor of Tshwane, South Africa, and co-host of this year’s Urban 20 (U20) summit.
Dr. Nasiphi Moya, Executive Mayor of Tshwane, South Africa, said:
“We deeply appreciate the bank’s positive response to our call for funding. This demonstrates that MDBs are not only listening, but are truly committed to supporting the work cities are doing. But this isn’t just about money. It’s about making a real impact in the lives of the billions who call cities home. We’ve had countless conversations and produced endless studies on the urgency of climate action. Now is the time to shift from talk to tangible implementation. As city leaders, we’re not just prepared – we’re committed. We’re ready to lead, ready to act, and ready to take responsibility. All we need is support.”
Discussions centered on two strategic priorities: scaling up urban climate finance and strengthening climate adaptation efforts, particularly across the Global South.
Juan Pablo Bonilla, Sector Manager of Climate Change and Sustainable Development at the Inter-American Development Bank, said:
“The IDB is committed to scaling financial investments for urban infrastructure, aligning financial flows with climate-resilient development and prioritizing tools to assess risks. The Bank fosters sustainable infrastructure for cities and reduces the finance gap for better urban futures in Latin America and the Caribbean.”
Advancing these priorities can significantly support the 75 – and growing – national governments in the CHAMP coalition committed to strengthening subnational climate action. Launched during COP28 in 2023, the Coalition for High Ambition Multi-level Partnerships (CHAMP) brings together national governments committed to working more collaborative with their subnational governments in the design, financing and implementation of climate action, including the Nationally Determined Contributions due at COP30, but also relevant to other climate strategies such as National Adaptation Plans or Long Term Low-Emission Development Strategies (LT-LEDS).
Andy Deacon, GCoM Co-Managing Director, said:
“This is a compelling demonstration of the strong commitment MDBs have made towards financing urban climate initiatives in cities and regions across the world. These discussions represent a significant step forward to accelerate and mobilise public investment to close the urban finance gap, and to strengthen public leadership collaboration between national governments, MDBs, and local leaders through multilevel partnerships that can also catalyse private investment.”
Ambroise Fayolle, Vice President of the European Investment Bank, said:
“Our roundtable meeting in Washington is very timely and cooperation between our organisations is more important than ever. As a member of the multilateral bank family, the European Investment Bank will stay the course. We are committed to working with cities and mayors around the world to support them developing urban climate strategies and projects, and finance climate action which will reinforce stability and prosperity for our communities.“
In an effort to strengthen awareness and commitment for urban climate action, mayors and city leaders are calling on national governments and DFIs to increase public investment for urban climate finance to a minimum of US$800 billion annually by 2030. This call was launched at the 2024 U20 Summit in Rio de Janeiro, Brazil and was included as part of the U20 Communiqué handed to Brazil’s President Lula. In recent years, urban climate finance, including countries’ and DFI’s investment, has increased. However, cities and regions still face a substantial financial gap with current public funding reaching only 23% of the annual goal.
Anyang’ Nyong’o, Governor of Kisumu, Kenya, said:
“We urge MDBs to significantly increase funding dedicated to social and climate action. The time has come for national governments and international financial institutions to recognize the vital role of local leadership. Local governments can no longer be treated as secondary actors in the fight against the climate crisis. We are on the frontlines designing, delivering, and sustaining the solutions our communities need. True progress depends on strong partnerships between national and subnational governments. When MDBs invest in cities, they’re not just funding infrastructure – they’re investing in more resilient, inclusive, and empowered communities.”
Andrea Fernández, C40’s Managing Director of Climate Finance, Knowledge and Partnerships, said:
“In cities around the world, massive investments are needed in clean energy, sustainable transport and waste, and strengthening resilience, to help close the urban climate finance gap. Public investment made by MDBs’ is essential, as it plays a catalytic role in helping cities unlock and access both public and private funding that contributes to reaching the total of $4.5 trillion cities need annually to tackle the climate crisis.”
View the mayors’ open letter and the MDB’s response.