NewCities Releases Global Report on Urban Infrastructure Financing
- Handbook on Urban Infrastructure Finance is the culmination of a yearlong research initiative led by NewCities Senior Fellow, Dr. Julie Kim.
- Addressed to city leaders, study outlines innovative financing and funding mechanisms for local urban infrastructure.
- “Innovations in Urban Infrastructure Financing” event to gather leaders in New York City, May 9.
Montréal, Canada – May 3, 2016. NewCities has published its Handbook on Urban Infrastructure Finance, designed as a point of reference for those planning, designing and building infrastructure projects in cities around the world.
One million people move to cities each week. As cities grow at this unprecedented rate, city governments are overwhelmed with the task of providing adequate infrastructure. The funds required to bridge the investment gap are astronomical. The McKinsey Global Institute estimates that USD $57 trillion – almost 5 percent of gross world product – will be needed by 2030.
In February 2015, NewCities launched the Financing Urban Infrastructure Initiative with the support of Cisco, Citi and Arup, to examine recent innovations in urban infrastructure financing and funding. The initiative was led by NewCities Senior Fellow, Dr. Julie Kim, co-founder of Stanford University’s Global Projects Center (GPC). The study is structured as a practical handbook to help cities and local governments better navigate the diverse range of infrastructure financing instruments available to cities today.
Beyond detailing traditional mechanisms, the Handbook introduces cities to successful infrastructure financing models, including: crowdfunding and mini-bonds from the United States and United Kingdom; the multi-city pooled approach of Local Government Funding Agency (LGFA) in Scandinavia; Brazil’s new funding vehicle CEPAC (Certificados de Potencial Adicional de Construção or Certificates of Potential Additional Construction) bonds; and performance-based social impact bonds.
Dr. Kim focuses on new solutions for infrastructure development in mid-sized cities in the developing world – the so called Emerging 440. These tier-two cities are expected to drive 65 percent of future productivity growth globally in coming years. The Handbook’s insights are based on in-depth interviews with high-level private and public industry stakeholders. It emphasizes finding sustainable long-term instruments for financing infrastructure rather than resorting to short-term fixes, such as subsidies.
NewCities and its collaborators will showcase the Handbook’s findings at Innovations in Urban Infrastructure Financing, an event in New York on May 9, in partnership with Citi and with additional support from Arup. Key infrastructure experts and nontraditional actors will gather to probe how these innovative financing mechanisms can be implemented to develop cities’ infrastructure around the world.
John Rossant, Chairman of NewCities, said: “Developing new financing mechanisms to meet vast and growing infrastructure demands is one of the most urgent challenges for municipal authorities around the world. The Handbook prepared by NewCities Senior Fellow, Dr. Julie Kim, will be invaluable to city leaders everywhere.”
Dr. Julie Kim, Senior Fellow at NewCities, said: “The world of infrastructure financing is incredibly complex. This “how-to” guide explains concepts and approaches so that city leaders can understand the many financing models available and make informed choices. To build better infrastructure, our cities must become more self-sustainable in the long run. That will take a collaborative effort to create a new, collective vision for our cities.”
Arvind Satyam, Managing Director Business Development, Smart+Connected Communities, at Cisco, said: “Urbanization and digitization are driving infrastructure demands on cities around the world. Innovative financing solutions are needed to address the critical gap in infrastructure funding and to drive bigger and faster deployment of projects. Cisco is proud to collaborate with NewCities to launch the Handbook on Urban Infrastructure Financing. Its an important resource that provides innovative financing models and case studies for public and private stakeholders.”
Ed Skyler, Executive Vice President for Global Public Affairs at Citi, said: “With the demand for urban infrastructure estimated to be $60 trillion globally in the coming decades, there is a great need for cities to be proactive in implementing solutions that support their growth. Citi is proud to partner with NewCities to launch the Handbook on Urban Infrastructure Financing, an invaluable resource that provides cities with innovative tools and strategies to help address the significant infrastructure financing gap and prepare for the future.”
Ignacio Barandiaran, Principal at Arup, said: “In an environment of constrained budgets, it is critically important for cities to be able to finance self-sustaining projects. Arup is proud to have supported NewCities on this important work, sharing our expertise advising cities around the world with successful and creative strategies.”
Read the Handbook on Urban Infrastructure Finance at bit.ly/NCFUrbanFinance
Find out more about NewCities at www.newcities.org
Find out more about The Financing Urban Infrastructure Initiative at http://www.newcities.org/financing-urban-infrastructure/
NewCities is an international nonprofit organization dedicated to making cities more inclusive, connected, healthy and vibrant. Focusing on people, places and policies, we bring together a global network of public and private sector leaders and Urban Tech innovators to foster results-oriented collaboration. We also produce actionable research that can be implemented by decision-makers across sectors