Page 8 - A U4SSC deliverable - Guidelines on tools and mechanisms to finance Smart Sustainable Cities projects

Executive Summary

These Guidelines elaborated on within this report have been developed as part of the United
for Smart Sustainable Cities Initiative (U4SSC). They provide practical recommendations for city
governments on how to develop investment-grade projects in support of sustainable smart
urban development. The Guidelines explain what a sustainable smart city project is and provide
an overview of traditional and innovative financing tools that are available and can be used to
finance city projects. They also outline what types of potential investors exist and how to make a
sustainable city development plan attractive to them. The Guidelines promote implementation of
the 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda of the Third
International Conference on Financing for Development.

The objectives of the Guidelines are to:

(a) define sustainable smart city (SSC) projects;
(b) share the criteria potential investors consider when making investment decisions;

(c) explain what a list of investment-grade projects for sustainable cities is and how to create one;

(d) describe the different financing instruments that exist today; and
(e) provide an outlook on potential trends induced by the COVID-19 outbreak which might impact
future investment in urban development.

The introduction explains why innovative financing is more relevant than ever before. It references
major United Nations events and meetings that addressed the topic of financing the 2030 Agenda
and the importance of working across sectors (public and private) and levels of governance
(international, national and local). It also explains why financing urban development projects
at a local level is critical to achieving the Sustainable Development Goals (SDGs) globally. The
introduction suggests that the financial resources needed for urban development projects are
available through private investment. However, there is a need to build up the capacity of local
authorities and stakeholders for them to be able to attract those investments. It stresses the
importance of enhancing sustainable financing strategies and investments at country and regional
levels.

The definition of an SSC project is provided in the first chapter of the Guidelines and is elaborated
with a broader outlook on the areas the projects may touch upon. This chapter also explains the
importance of a baseline reference for the progress of cities in becoming sustainable and smart,
in order to be able to set meaningful targets for further development. The Guidelines suggest that
cities use the U4SSC Collection Methodology for Key Performance Indicators for Smart Sustainable
Cities (2017) to develop their city profiles and set the benchmarks for further development. The
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first section also describes the ECE approach “Sustainable Smart Cities with Innovative Financing”,
which the ECE applies in its work with cities, supporting them to move from an evaluation of their
sustainability to a concrete action plan for development. Action plans include both legislative
recommendations and a list of investable projects for the city’s sustainable development.

vi U4SSC: Guidelines on tools and mechanisms to finance Smart Sustainable Cities projects