Catalytic Cities sets out to mobilize finance to accelerate the uptake of urban climate solutions, aligning with the goal of 1.5°C maximum global warming.
Our strategic approach includes:
Achieving a market transition to low-carbon technologies in urban sectors with the highest carbon emissions, including building, transport, energy and waste
Increasing financing sources for public and private project developers from commercial and catalytic investors and lenders
Focusing on countries whose cities have the highest or fastest growing carbon emissions
Addressing climate needs
While up to 80% of climate mitigation and adaptation actions will be implemented at the city and local levels, their needs are not currently being met by adequate financing sources and solutions. Hundreds of cities and regions joined the Race to Zero and the Race to Resilience Campaign around the COP26, with Nicola Sturgeon and Michael Bloomberg’s advocacy.
Meanwhile, alliances of investors also committed trillions of dollars to meet the net-zero goal by 2050. This shows the necessity for governments at all levels and the private sector to work hand-in-hand to accelerate climate action.
Catalytic Cities, through collaborating with a coalition of partners (networks of cities, private sector actors, fund managers, public and private investors), aims to bridge this gap by delivering innovative blended-finance investment vehicles. The vehicles will invest in urban climate solutions in key sectors and geographies to yield the most significant climate impact towards achieving the 1.5°C goal, turning city climate action plans into reality.
Bloomberg Philanthropies support
Catalytic Cities is led by Catalytic Finance Foundation with the support from Bloomberg Philanthropies, and in collaboration with C40 Cities and Global Covenant of Mayors for Climate & Energy (GCOM).
Catalytic Cities aims to overcome four key barriers
Lack of pipeline of bankable projects coupled with extensive need for project preparation and de-risking support
Resource intensive and challenging to aggregate small-scale projects to reach scale for investors (e.g., energy efficiency)
More business models to share risk and payments of public goods (e.g., clean air) required
Lack of data and resources to account for external climate-related risks for infrastructure projects
Investor requirements and financial regulations not conducive to long-term investment
Creditworthiness of cities below par (only 20% of cities in developing countries are credit-worthy)
Regulatory barriers to access capital markets
Scarce public and philanthropic climate finance
Limited use of de-risking mechanisms such as development guarantees and insurance
Need for replication and standardization of success cases
Policy and Governance
Domestic policies not adequate to incentivize the integration of externalities
Insufficient integration of climate targets into long-term city investment plans
Lack of political stability, PPP framework and/or track record in some geographies
Poor governance of environmental externalities
Ideation and screening of potential funding concepts
Initial assessment & further screening: investment vehicle memos
Investment vehicle design: identify potential anchor investors and create consortium
Secure funding from anchor investors
Final set-up of Investment Vehicle Consortium
Execution of Investment Vehicle and its TA Fund
Connecting cities with climate finance
Catalytic Cities is mobilizing finance to accelerate uptake of urban climate solutions. This is our plan to help cities align with the IPCC's goal of limiting global warming to 1.5°C.
of Investment Vehicle and its TA Fund