Page 79 - U4SSC Compendium of practices on innovative financing for smart sustainable cities projects

Conclusions

At the High-Level Meeting on Financing the 2030 Agenda for Sustainable Development on 24
September 2018, the United Nations Secretary General Antonio Guterres underlined the need
to step up efforts in developing innovative financing and in mobilizing private investment. He
further stressed the need to build stronger partnerships with the private sector and the business
community in order to achieve the 2030 Agenda SDGs.

The cases provided in this compendium highlight best practices in involving the private sector
and the business community in project finance. The compendium demonstrates the need for a
suitable enabling environment and increase capacity among different stakeholders. It should be
used to drive forward the 2030 Agenda and inspire cities to take steps to become smarter and
more sustainable, while enabling investors to make profits in a sustainable way.

The fifteen cases of this “Compendium of Practices on Innovative Financing” demonstrate examples
of innovative financing mechanisms that were used successfully to implement sustainable and smart
city projects. In addition to understanding the essence of the project, it is possible to comprehend
how these projects positively impacted the lives of citizens in the cities and contributed to the
smartness and/or sustainability of the city. As shown in different cases, several SDGs can be achieved
in each project and all of them contributed to make cities more livable. From this compendium, it is
possible to develop an insight into the types of projects that can serve to improve city sustainability
and smartness while acquiring new and innovative ways for which they can be financed, from PPP
to blended financing.

Innovative finance and enhanced public-private partnerships (PPP) can close the financial gap by
providing additional sources to finance projects in municipalities and bringing the expertise of
the private sector into the project cycle. However, a suitable regulatory environment is needed to
entice the private sector to finance public projects. Laws and regulations often prevent investors
from investing in urban development projects. Existing laws and regulations – direct and indirect
legislative barriers – may prevent investors from investing in these types of urban development
projects. Together with the U4SSC Guidelines on tools and mechanisms to finance sustainable
smart cities projects, this compendium provides a useful tool that suggests reviewing and revising
existing institutional and legal frameworks to enable private sector investors to engage in urban
development projects. Effective and transparent legal and institutional frameworks, including risk
and profit sharing, are critical for attracting reliable investment partners. These innovative financial
tools for city projects will ensure the support for priority actions for achieving SDGs and to ensure
that “no one is left behind”.

Compendium of practices on innovative financing for SSC projects | January 2023 67