Page 15 - A U4SSC deliverable - Guidelines on tools and mechanisms to finance Smart Sustainable Cities projects

the SDGs. It also suggests that the global infrastructure gap in developing countries constitutes
between USD 1 trillion and USD 1.5 trillion annually. In order to bridge this gap, the Action Agenda
suggests launching new infrastructure initiatives which involve actors from all sectors: national
and multilateral development banks, United Nations agencies, national institutions, development
partners, lenders and private-sector investors. The Action Agenda also recognizes that investments
in sustainable development usually take place at the subnational level, where financing and
technical capacity support is often needed the most. 6

It is critical to involve a wide variety of stakeholders to accomplish projects at the local level. The
2030 Agenda calls for a spirit of strengthened global solidarity, focused, in particular, on the needs
of the poorest and most vulnerable, and with the participation of all countries, all stakeholders and
all people. As such, projects working towards the 2030 Agenda should draw on multi-stakeholder
partnerships that mobilize and share knowledge, expertise, technology and financial resources,
to support the achievement of the SDGs in all countries, and developing countries in particular.

It is important that, in working towards the 2030 Agenda, potential projects are built from the
ground up. The fundamental message of the SDGs, “leave no one behind”, requires a clear flow
of communication from the citizens to the project developers. Citizen input is an integral part of
project identification and can happen in several different ways; for example, via democratically
elected officials or via investment opportunities for citizens (including tax breaks for local project
developers). Strong citizen participation provides credibility and collective ownership of projects.
There are already some good examples of direct citizen participation in the process of project
development. For example, the Dutch government encourages citizens to participate in improving
the liveability of their neighbourhoods. This is part of an ongoing initiative, the ProDemos
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Knowledge Portal, to increase awareness and appreciation of democratic institutions through
education. Through this portal, citizens have the opportunity to grasp what they themselves can
do to improve their local neighbourhood.

Financing sustainable smart city projects

Financing for sustainable development exists, and is available for smart city projects. The size, scale,
and level of sophistication of the global financial system currently in place allows for it. However,
accessing these potential sources of financing for sustainable development is difficult, particularly
for municipalities, as available finance is currently not channelled towards sustainable development
at the scale and speed required to achieve the SDGs. There is an evident need for new and
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innovative methods of financing, which channel the funding towards projects that support achieving
the 2030 Agenda. The problem is not the lack of financing but the lack of “bankable” projects. The
public sector, in particular at the city level, lacks sufficient capacity to develop bankable projects
up to a standard that attracts lenders and investors.

There is no single generic solution for financing SSC projects. A wide variety of instruments can
be used, depending on the objectives of the project, the level of development of the country’s
economy, which aspects of the SSC concept it is supporting, and the time-frame. Financing for

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