Investment in urban climate projects is urgently needed worldwide. Cities hold most of
the global population and economic activity and contribute approximately three-quarters of the global greenhouse gas (GHG) emissions, underlining the urgent need for projects to reduce emissions in urban areas and increase climate resilience.

Cities face a variety of barriers in accessing climate finance, posing a clear need for
innovative financial strategies. However, cities’ ability to attract and facilitate investment in badly needed climate-smart urban infrastructure is constrained by a variety of barriers. Chief among these is municipal creditworthiness; weak or non-existent regulatory, fiscal, and governance systems; risks associated with both forex and interest rates; insufficient revenue collection from city services; technological risks and high upfront costs; and organizational or jurisdictional limitations on cities’ ability to finance and fund major projects.

This brief presents one potential strategy for cities to increase access to urban climate
finance, which is financial aggregation. This brief defines financial aggregation as
financial instruments or enterprises that combine multiple investments, participants,
projects, or sectors to scale up financing for urban climate mitigation or adaptation
needs. These strategies may target either one or both of the supply- and demand-sides
of financial transactions. The supply-side aggregation strategies bring together multiple
groups of finance providers and other actors, while demand-side aggregation strategies
combine the purchasing or borrowing power of recipients of finance, including project
developers, operating companies, and individual consumers.


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