The European Union and the United Nations Capital Development Fund are thought leaders in defining the development dimension of urban finance in Africa. The European Commission INTPA F4 Unit designed the project, “Improving the Ecosystem for Urban Finance in Africa” and selected UNCDF to perform a study of Cameroon, Tanzania and Togo on the subject

The study delivered technical reports that assessed the status of urban infrastructure financing for each country through a Subnational Financing Assessment Framework, and identified the opportunities and challenges, which led to recommendations on alternative financing sources and how to improve the structure of urban finance, particularly with the deployment of EU innovative financing instruments.

The context:

The report on the Africa Urban Finance Ecosystem responds to the European Union (EU) tender ADM-MULTI 2021/425-998.Following a competitive process, the contract was awarded to the UN Capital Development Fund – the United Nations Hub for Sub National Finance.

The European Parliament, the European Commission (EC) and UN Habitat jointly produced the flagship Financing Sustainable Urban Development Report in 2021.The European Investment Bank included a chapter entitled in the 2020 Banking in Africa report (Chapter 7 “Investing Sustainably in Africa’s Cities”).

UNCDF was a member of the advisory council for the Financing Sustainable Urban Development team and built on these publications with its own volume “Local Government Finance is Development Finance”, which incorporated the Malaga Coalition policy agenda for a global financial ecosystem that works for cities and local governments. This policy agenda has been refined through the meetings, podcasts and initiatives of the coalition members – including the EU.

This study was commissioned by the EU to explore the potential and the scope for deploying its development funding and financing toolbox (now expanded to include guarantees) to address the challenges of financing sustainable urbanization as defined in the terms of reference. Details of the EU funding and financing toolbox are available on the European Union website.

Contribution Agreement 2021/430-627 “Improving the ecosystem for urban finance in Africa”, EU contribution: EUR 200,000.