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PROJECT: Finding the Finance: Climate compatible development in Asian cities

Project Reference: RSGL-1202

Urbanisation is a mega-trend in Asia. While capitals and megacities receive much attention, emissions growth and vulnerability are just as pronounced in second-tier cities (such as provincial capitals). These cities can consist of 1 to 3 million people, and rates of population growth are often higher than in capitals, making climate compatible development a necessity there. However, it is difficult for these areas to access climate finance. While total costs often not precisely known, international funding schemes still only meet a small portion of the total financing needed to support climate compatible development in cities.  The Green Climate Fund (GCF) presents a new opportunity; the “design and planning of cities to support mitigation and adaptation” being one of its initial focus areas.

Research partners Germanwatch, the Vasudha Foundation, the Institute for Essential Service Reform, the Institute for Climate and Sustainable Cities and Eberswalde University for Sustainable Development will assess the climate finance needs and gaps for climate compatible development in second-tier cities across three countries; India, Indonesia and The Philippines. The team will explore how current opportunities can be harnessed to meet the climate finance needs.

Based on this assessment, the project will develop recommendations for how funding from the GCF and other sources can be more accessible to cities, for example through the creation of Urban Implementing Entities. Or how funding can be used in order to incentivise the deployment of national or sub-national resources such as revenues from fees, local taxes or municipal bonds for urban climate compatible development projects.

The research team has defined three principal criteria for climate compatible development in cities:

  • Adequate adaptation measures within cities to safeguard vulnerable urban areas
  • A reduced energy consumption footprint of cities to mitigate global climate change
  • Sustainable urban development that upholds the cities’ elementary functions in times of rapid and unplanned urbanisation and notwithstanding a lack of sufficient environmental awareness in the general population.

The outcomes of this research will set the selected cities in India, Indonesia and the Philippines on a strategic path to achieve these goals. The cities are Gurgaon and Pune in India, Cagayan de Oro in the Philippines, and Kupang in Indonesia.

The research team anticipates that the project will lead to more targeted thinking by urban decision-makers around accessing financial resources for urban climate compatible development. The researchers will make recommendations for increased institutional effectiveness to attract sustainable urban development funding from the GCF and other sources. The inclusion of national decision-makers and other relevant stakeholders in the enquiry will aim to encourage discussions at the national level on cities’ access to funding. A set of recommendations will be translated into Indonesian to ensure that the outcomes will be accessible there.

This research project also aims to have policy impact on a global scale: it intends to raise the prominence of second-tier cities within international processes. Funding institutions, particularly the GCF, see appropriate implementing entities as a prerequisite for channelling investments to cities. If the project is successful in attracting GCF funding to second-tier cities in the three study countries, it may encourage other cities to follow suit; GCF support for climate compatible development in other developing, second-tier cities may follow in the medium term.

Research update

The research is currently underway, using science-based stakeholder dialogues as a core part of the methodology. A series of workshops have been held in the case study cities, and data collection and analysis is underway. The first research outputs are outlined below; further policy papers, blogs and academic articles are to come.


Handbook for Policy Makers: Finding the Finance – Financing Climate Compatible Development in Cities

This publication presents a number of options available for cities to meet their financing needs for translating low carbon and climate resilient development plans into action. It provides insights on how local governments can raise funding locally and gives an overview of the international climate financing landscape that cities can access. Click here to download the publication. (pdf 5 MB)

Going to Town

In spite of growing international climate finance, a particular constraint for urban areas is their restricted access to international climate funds. The limited creditworthiness of local governments as well as the lack of experience and low institutional capacities among many local authorities in dealing with climate change issues prevent cities from attracting investors. This paper illustrates three tangible entry points on how the Green Climate Fund can promote and advance climate compatible developments in cities. Click here to download the publications.

CDKN Funding: £290,000

CDKN Project Manager: Fareeha Irfan Ovais (

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Project Highlights


FEATURE: Seeking out climate finance for resilient Indian cities

Srinivas Krishnaswamy reports on project activities for the CDKN supported project Finding the Finance: Climate Compatible development in Asian cities. Srinivas Krishnaswamy, is the Chief Executive Officer of Vasudha Foundation, a non-profit organization that works on projects and activities related to clean energy, energy access and climate policy.