Developing projects to address climate change in cities - the C40 Cities Finance Facility (CFF)

Project description

Title: C40 Cities Finance Facility
Commissioned by: German Federal Ministry of Economic Cooperation and Development (BMZ) 
Co-funded by: Government of the United Kingdom - Department for Business, Energy & Industrial Strategy (BEIS), The United States Agency for International Development (USAID), The Children's Investment Fund Foundation (CIFF)
Countries: Global
Overall term: 2018 to 2021

C40 Cities Finance Facility


Addressing climate change is one of the most critical and urgent challenges of our time. Timely action is needed to safeguard a liveable planet for young and future generations. Cities are responsible for more than 70 per cent of global energy-related carbon emissions. Many of the key and emerging climate risks are already affecting cities. They also face rapid demographic and economic growth: By 2050, 70 per cent of the world’s population will live in cities.

Therefore, investment in high quality urban infrastructure is desperately needed. An estimated USD 4 trillion per year in infrastructure investment is necessary in developing countries to leapfrog the fossil fuel-driven economic development of the past and to meet the goals set in the Paris Agreement and the sustainable development agenda. Owing to shortfalls in municipal budgets, cities are increasingly looking at a wider range of financing options to meet their infrastructure needs. A CFF study found that almost 400 cities are actively seeking finance for 1,143 projects worth close to USD 60 billion. This is only a snapshot of cities’ global investment needs. Despite this shortfall, currently only 0.8 per cent of the capital managed by pension funds, sovereign wealth funds, insurance companies and other institutional investors is allocated to infrastructure. 
This shows: 

  • Cities are finding that traditional funding sources are insufficient in meeting the demand for sustainable infrastructure that meets the needs of their citizens. 
  • Financiers have the desire and capital to invest, but are having difficulties finding financially viable projects to invest in.

The C40 Cities Finance Facility (CFF) addresses this gap between cities and finance by providing support to cities in developing and emerging economies to develop finance-ready projects. The CFF supports cities to develop financially sound business proposals for projects that they have identified as priorities and ensures that city administrations retain skills and structures to enable cities to prepare a pipeline of low carbon and climate resilient infrastructure projects.


Cities reduce emissions and increase climate resilience by mobilising finance for local level change action. 


The CFF is a collaboration of C40 Cities Climate Leadership Group and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The CFF is funded by the German Federal Ministry for Economic Development and Cooperation (BMZ), the UK Department for Business, Energy and Industrial Strategy (BEIS), the United States Agency for International Development (USAID) and the Children Investment Fund Foundation (CIFF).

Through its work, the CFF enables cities to play their part in delivering the objectives of the Paris Agreement; limiting global temperature rise to 1.5°C above pre-industrial levels. By championing projects that will simultaneously deliver significant development benefits, the CFF also helps cities to progress their implementation of the Sustainable Development Goals (SDGs), the Addis Ababa Action Agenda and the New Urban Agenda.

How does the CFF work?

  • A dedicated CFF in-city expert, alongside national and international experts, joins the city’s project team to help develop technically and financially sound investment projects structured in the city’s best interests
  • A knowledge and learning programme that catalyses change by disseminating knowledge to other cities, practitioners and policy makers to remove barriers to climate action in cities
  • A tailored plan of trainings and workshops to develop institutional capabilities within city administrations to access finance, to structure infrastructure projects in a sustainable manner and to undertake similar projects more independently in the future
  • A strong network of partnerships - the CFF forges in-kind strategic partnerships with like-minded organisations and networks based on shared vision and value addition


  • The CFF is currently supporting projects in 15 cities worldwide. Three cities have already achieved considerable results:
  • Bogotá is building a first-of-its-kind 25 km bicycle highway connecting citizens from low, middle and high-income neighbourhoods to work, education and recreation opportunities.
  • Mexico City is implementing a 22 km Zero Emission Corridor on the major thoroughfare of Eje 8 Sur, by purchasing a fleet of electric buses and serving an estimated 185,000 users daily. 
  • Thekwini (Durban) is implementing a community-operated river restoration programme, clearing 3,000 km of watercourses surrounding the city and significantly reducing the city’s vulnerability to climate related flooding.