Financial Sustainability - Key to Unlocking Subnational Finance for Sustainable Urban Development

This session, co-hosted by the Asian Development Bank (ADB) and the United Nations Capital Development Fund (UNCDF), presents critical discussions around the significance of subnational funding. We delve into enhancing the financial sustainability of cities to foster sustainable urban development, exploring strategies for cities to bolster their capacity and establish an environment conducive to effectively mobilizing and managing resources.

Throughout the discussion, we examine how cities can attract investments from external sources and analyze various pathways, challenges, opportunities, and real-life examples. Increasingly, subnational governments seek innovative financial mechanisms to unlock additional financing and build partnerships with the private sector due to dwindling public funds to improve public service delivery. The aim is to illuminate the complexities of financing urban projects while ensuring the financial well-being of cities.

Central to our dialogue is understanding the pivotal role of subnational funding in improving infrastructure, services, and overall quality of life within cities. We showcase successful instances of subnational funding and explore its impact on urban development. Additionally, we delve into project preparation facilities (PPFs) and their role in streamlining the project preparation process, thereby enhancing access to funding for urban development initiatives. Real-life examples, including a case study from the Kochi Water Metro System, will demonstrate how the PPF has facilitated project preparation and paved the way for cities to secure essential funding.

Furthermore, we explore critical components of fiscal management that cities must embrace to access subnational funding effectively, including enhancing financial transparency, accountability, and revenue generation strategies. The Kochi case study will also demonstrate what the municipality needs to do to gain access to downstream financing in terms of its financial management, providing valuable insights into the practical steps and considerations involved in accessing financing for urban development projects. The second case study from Banyumas City will demonstrate how the city has been able to upscale its waste management business to unlock additional finance.

Through engaging presentations, panel discussions, and interactive sessions, participants will gain insights from leading experts and contribute to shaping sustainable urban finance systems. This session provides a valuable opportunity for policymakers, urban planners, finance professionals, and stakeholders to deepen their understanding and contribute to the future of urban finance.