Infrastructure Packaging

Historically, cities as separate urban government units had never garnered any significant attention from the United Nations, but at Tuesday’s U.N. Climate Summit in New York, mayors from all over the world took center stage.
A common theme throughout the day was that cities are crucial to fight climate change because urban areas are responsible for nearly 70 percent of all carbon emissions.
To reduce pollution from urban centers, U.N. Secretary-General Ban Ki-moon announced the establishment of the Climate Finance Leadership Alliance, tasked with funding low-carbon and climate-resilient infrastructure projects and make their implementation better and easier as a key component of the struggle against global warming.

Despite the U.N.’s usual good intentions, the purpose of CFLA seems to be a work in progress, not due to a lack of focus by the loose partnership, but in part because infrastructure project funding is so different for various sectors in different cities. Participants at the summit highlighted that any financing initiative must be flexible in order to bring everyone to the table.
So far about 20 partners — ranging from the C40 advocacy group to Citibank — have committed to CFLA, according to Amanda Eichel, adviser to Michael Bloomberg, U.N. special envoy on cities and climate change and former mayor of New York.

Partners will not engage in direct funding of infrastructure projects, but rather leverage the right investors to make those projects a reality in developing countries, precisely where the risk is highest.
CFLA will thus function like a consulting firm for cities on “how to package projects in an interesting way to make them more attractive to investors,” Eichel said.
“A common communication, language and approach” in presenting infrastructure projects is the main reason cities have such trouble funding large infrastructure projects, Bloomberg’s adviser explained.
Investors struggle to navigate the bureaucracy’s competing priorities and the lack of clarity on any potential returns, so the initiative will provide them with guidance on each sector instead of focusing on individual cities, in order to maximize development impact.

To illustrate how the process works, Eichel gave the example of a mass transit development project in a particular urban area. CFLA would study what transport needs are across a range of cities within that sector and give recommendations on how to “market and advertise” that type of project to potential investors. It would then be up to that city to apply that “branding” strategy and choose their own partners and contracts based on individual cities’ criteria.

Outside of its partners, the initiative’s unofficial steering committee is led by the World Bank,Bloomberg PhilanthropiesU.N.-Habitat and the Rockefeller Foundation. Although final roles have yet to be finalized, Bloomberg Philanthropies and World Bank will be in charge of researching and assessing “the state of climate finance in cities” in annual reports, because measuring impact can provide more confidence to investors. U.N.-Habitat will act as technical adviser, determining the type of project for particular needs in various cities. The Rockefeller Foundation will be a core member of this group, although in a still unknown capacity.

Capacity building

Joan Clos, executive director of U.N.-Habitat and former mayor of Barcelona, insisted the problem is not a lack of money but putting it in the right places.
“What is lacking is not funding, what is lacking is the quality of the project,” he told Devex, stressing that the real issue is making sure cities know how to get a slice of that money. “Financial institutions require that [urban infrastructure] projects have a clear business model, they are understandable, in order to be funded.”
We are in the “demand side of the equation” to build up the capacity of developing country cities, Clos said.

The head of U.N.-Habitat specified that “turning solid waste into energy is one of the most important group of projects.” For instance, landfills in developing countries are usually the highest emitters of methane gas, but urban governments there don’t have the technology to harness the waste and turn it into energy. The goal is to convince investors that they can make a return on that type of financial risk, which Clos noted can be done by showing them the potential for “maturity of long-term investment” in sanitation and transportation projects, to name just two.

CFLA, he said, will help create institutional settings to attract investors. These would be “innovative instruments … not necessarily on the financial side” in the form of new water, electricity or transport companies, legislative reform or utility subsidies. The field is open because each city has a unique set of issues despite a shared, overarching problem within different sectors.

“The scarce resource is the solid business plan” for infrastructure projects, and the initiative has been established to remedy just that, Clos pointed out.
CFLA will thus adopt a unique business and climate change-based approach to development, which has the potential to push more private sector engagement if investors see they can make a profit.

Top U.S. banks want to be a part of the initiative, and surely Bloomberg’s name and business acumen will also help attract investors. But it remains to be seen if governments, aid groups and the private sector will be able to work together to achieve the goal of helping cities develop low-carbon and carbon-resilient infrastructure to really make them the next battleground to combat climate change.

Picture: Johannesburg by SmartCityStudio

Clean Energy Centre

“UN-Habitat launched the construction of a Multifunctional Clean Energy Centre at St. Christine Community School Centre in Kibera Kenya. This is a joint initiative funded by DANIDA and UN-Habitat. It is the first of a series of Multifunctional Clean Energy Centres that UN-Habitat plans to construct in other Sub-Saharan African cities.
The proposed 3-floor facility has been designed taking into account bio-climatic and energy efficiency considerations. It will constitute the following spaces:  toilets and bathrooms, a solar charging facility, computer room, a classroom as well as a community hall.  The project seeks to improve access to basic urban services to the community, offering a multi-purpose facility which combines improved sanitation (public toilets and bathrooms), clean cooking fuel and lighting. The toilets will be used by the school of about 415 pupils and the surrounding community.
This facility has been designed as an income generating tool for the school. The local community will be able to have access to the public toilets and bathrooms at a fee. The biogas produced will replace firewood and charcoal which the school currently buys at a high price. This will greatly reduce its expenditure associated with meal preparation. Some of the electricity generated by the solar photovoltaic panels will be used for lighting the building and also at the solar charging facility for recharging of solar lanterns and mobiles phones at an affordable fee.
The biogas generated in the digester, that forms part of the sanitation system, will be used at the school’s kitchen to prepare meals for the children. The liquid fertilizer, an end product of the biogas system, will be used at the school’s garden. A total of 150 solar lanterns, 50 of which have been donated by Philips East Africa, shall be rented out to the school’s parents and the surrounding community to ensure clean, bright and affordable lighting is accessible to replace kerosene lamps thereby enabling children to read at night. In addition, the facility will include a water tank where water will be stored for use at the school and some of it will be sold to the community at an affordable rate.”
Source: UN-Habitat, Picture: Above: Kibera

Community Mortgage

“In many poor and developing countries, land markets, prevailing policies, practices and institutions limit many of the working poor’s access to secure tenure and adequate land for housing. The Philippines is one such country, where patterns of urban growth and development make it difficult for the poor to remain in the cities where employment and other opportunities exist.”

“Through the Community Mortgage Program, the Government lends funds to informal settlers organized as a community association, making it possible for them to buy a piece of land that they can occupy permanently. The land can be on-site, presently occupied by the community, or an entirely new site to where the community intends to relocate. The CMP also offers loans for site improvement and house construction even if, in reality, the majority of CMP loans are issued for the acquisition of land. The CMP was designed to be a demand-driven approach; it is the community that needs assistance that decides to participate in the programme and initiates the process. In an on-site project, informal settlers can obtain ownership of the land they occupy by buying it through a community mortgage loan. One of the requirements is a subdivision plan, where the houses and plots are then re-aligned or re-blocked to conform to minimum subdivision standards. An off-site project, on the other hand, requires relocation to another area that the community chooses and purchases.”

“To be eligible for loans, informal settlers have to have a homeowners’ association (HOA) with at least nine households but no more than 200. After an association has complied with the minimum requirement and met certain criteria, the Social Housing Finance Corporation approves the mortgage and advances payment to the landowner. The group loan is payable monthly for up to 25 years at 6 per cent interest per annum. The land to be purchased serves as collateral for the loan. The HOA is considered to be the borrower.Throughout the process, it is responsible for preparing documentary requirements, negotiating with the landowner, collecting the monthly amortizations of itsmember-beneficiaries, and ensuring that their financial obligations to the lending institution are met. The HOA also enforces sanctions on community members, and oversees the re-blocking and enforcement of the subdivision plan.”

“The Philippines is the fourth most populous nation in East Asia. Growing at an average rate of 2 per cent annually, the population is currently 92 million, of which an estimated 63 per cent live in urban areas. Metro Manila, or the National Capital Region (NCR), is the largest urban centre in the Philippines. At present, its 16 cities and one urban municipality together had an estimated population of 12 million. If the current trend prevails, the Philippines is projected to be 70 per cent urban in less than a decade with an urban population of around 86 million. Unregulated urban growth and acute poverty have resulted in severe housing problems. Of the roughly 10 million Filipino families living in cities today, an estimated 3.1 million lack security of tenure with 2.7 informal settler households in Metro Manila alone according to data from the National Housing Authority in 2007.” Source: Innovative urban tenure in the Philippines, summary report, UN-Habitat / Global Land Tool Network. Picture: Christoph Mohr

Bus Rapid Transit system

Although old news,  Bogota’s Transmilenio Bussystem is a concept which should be added to this Smart City Studio Blog. According to Camilo Santamaría presenting at the UN-habitat Expert Group Meeting in Nairobi, february 18th 2011:

“Transmilenio bus system shows how public transport-oriented city planning can stimulate urban renewal whilst improving the use of space and energy resources. The city is located between a river and a mountain range, and contains a number of heritage buildings in the central business district. It has a population of roughly 6 million people, and is likely to grow an additional 2 million in the next 15 years. Constrained by natural boundaries and a historical urban core, planning for a growing population with a significant number of living below poverty lines is a challenge.The bulk of employment opportunities are located in the CBD, which is situated at the Northernmost edge of the city alongside the mountain and is surrounded by a number of smaller towns to the South. Faced with the challenge of moving people between residential areas and places of work, the city realised that a bus system would be the most cost-effective means of providing public transport, and would require significantly less land than a car-centred approach. Curitiba’s BRT model was adapted to include passing lanes for buses, as observed in Quito. The implementation of the Transmilenio and inclusion of sidewalks, cycle lanes and public transport routes into city design has created numerous opportunities for urban renewal. Areas once designated for roads are now used by cyclists and pedestrians, and a number of tree-lined avenues and public parks have been created around the stations and commuter routes. These green spaces attract members of the public, and the streets are once again busy with people instead of cars. To cater for growing demand for public transport, the city is now considering a metro system to service major routes”.

This article is extracted from the report: “What does the green economy mean for sustainable urban development”, by UN-habitiat, Expert Group Meeting, Nairobi, 17-18 February 2011