IFC, the private sector arm of the World Bank, and the government of Switzerland have joined forces to launch the second phase of the Sustainable Cities programme, which aims to boost green urban infrastructure development in emerging markets.
The Sustainable Cities programme, led by IFC, offers support to subnational governments and private sector partners to attract investments and financing for various urban infrastructure projects. These projects span across transportation, water, wastewater, solid waste, and district energy sectors.
Scheduled to run from 2023 to 2027, the programme’s ambitious target is to facilitate over $500 million (€457 million) in commercial financing for urban infrastructure projects. The funding will be achieved through various channels, including non-sovereign loans, municipal bonds, and public-private partnerships (PPPs).
Switzerland’s State Secretariat for Economic Affairs (SECO) has pledged $19 million (€17 million) in funding, complementing its earlier support for the programme’s first phase. This new injection builds upon the success of the initial phase, which secured nearly $400 million (€366 million) in financing between 2018 and 2022, mainly focused on enhancing urban infrastructure services. Notably, 87% of the previous programme’s investments were related to climate initiatives.
The positive impact of the programme is evident, benefiting over 1.7 million people across more than 10 cities, including Bogota (Colombia), Casablanca (Morocco), and Ekurhuleni (South Africa). Additionally, IFC provided in-depth advisory services to nearly 30 partners and introduced tools like the Advanced Practices for Environmental Excellence in Cities (APEX) and the E-Bus Toolkit. These tools address pressing needs in climate-resilient urban infrastructure, expanding IFC’s product offering.
Dagmar Vogel, head of infrastructure financing division at SECO, expressed enthusiasm for the partnership, emphasizing how the Sustainable Cities programme aligns with their priority development areas and mission to support green urban infrastructure in emerging markets.
The programme’s objectives are in line with the World Bank’s climate change action plan, focusing on increasing climate finance, strengthening climate change adaptation, and aligning financial flows with the Paris Agreement on Climate Change.
IFC’s new phase of the programme is a strategic move to unlock new markets, develop bankable projects, and mobilize private sector solutions and investments in emerging markets. The effort supports the delivery of IFC’s other flagship initiatives in urban infrastructure, including Utilities for Climate (U4C) and Circularity Plus.
Part of SECO’s funding will also be allocated to assist Ukraine’s reconstruction efforts. The goal is to help the government identify opportunities to leverage donor and public funds and catalyze private investment. This underscores the program’s commitment to making a meaningful impact in various regions and sectors.
