Recognizing the critical role of cities and regions in climate action, the UN Capital Development Fund (UNCDF) and ICLEI – Local Governments for Sustainability jointly developed the concept of the City Bridge Facility. The Facility aims to address the local infrastructure financing gap, particularly in secondary cities of Least Developed Countries, supporting at least 50 local projects over five years.

The City Bridge Facility was launched on the 4th of December at COP28 to integrate sustainability into global urban development and address key challenges, and mobilize and catalyze investment for climate action at the local level.

By providing cities with concessional finance in local currency, this project preparation and investment Facility offers tailored financial instruments and complements existing initiatives like the Transformative Actions Program (TAP) - A global initiative to support local and regional governments transform their net-zero emission and resilient development infrastructure concepts into mature, robust and bankable projects ready for financing and implementation.

The City Bridge Facility is positioned as a groundbreaking finance mechanism. Its flexible financing approach can attract both public and additional private sector capital, scaling up climate finance aligned with Sustainable Development Goals to meet the needs of Least Developed Countries. The Facility marks a gigantic step towards fostering climate-resilience and is a game-changer for sustainable financing at the local level.

CITY BRIDGE FACILITY: A RESPONSE TO SUPPORT SECONDARY CITIES IN DEVELOPING COUNTRIES

As urban populations are expected to double by 2050, and the frequency of catastrophic climate change hazards rises, cities face a daunting challenge to adapt and mitigate this complex issue. While cities have the will, they cannot shoulder the needs for investments alone. Particularly smaller and intermediary cities are often excluded from accessing market-based financial instruments.

International and national climate policies should focus on fostering and enabling institutional frameworks that bridge the subnational development finance gap through multilevel partnerships, capacity building and customized financing instruments.

The Facility will build on ICLEI’s network and project preparation expertise gained through the Transformative Actions Program (TAP) and match the projects with UN Capital Development Fund managed financing instruments.

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