Brussels, 10 January 2022 -- Local and regional authorities from the European Union and its partner countries from Africa, Asia, and Latin America recently attended a workshop –organised in part by UN-Habitat – in which the participants discussed challenges to implementing New Urban Agendas in economically sustainable environments.

Discussions at the workshop “Financing Sustainable Urban Development as a vehicle for productive growth and as driver of Green and Climate-smart Recovery” centred around the ability of economies to increase productivity and equitable employment using sustainable urbanization as a vehicle for growth in a broader context of green and climate-smart structural transformation.

“Urban productivity, if unlocked, can be a catalyst to green and climate-smart recovery in sub-Saharan Africa, but infrastructure deficits constitute one of the largest obstacles to sustained economic growth,” Katharina Rochell, UN-Habitat’s Urban Development Specialist told the workshop.

“To help alleviate constraints on mobilising finance by stakeholders at different levels different groups of measures can be found in improving investment planning, raising local revenues and enhancing access to external finance,” she added.

The late November gathering, opened by UN-Habitat`s Chief of the Office for European Union Paulius Kulikauskas, built on the insights from the EU-funded initiative “Financing Sustainable Urban Development”, requested by the European Parliament and implemented by the European Commission, European Investment Bank and UN-Habitat.  It was supported by the International Growth Centre, which helped to identify measures helping mobilize financing for sustainable urban development in low-income countries.

The discussions also drew on the experience of local government representatives and development practitioners, making room for active and participative discussion where the audience was encouraged to share their vision and opinion on the topic.

One example discussed was the city of Hargeisa in Somaliland which plans urban investments in a forward-looking manner by implementing a system of “in-kind” land value capture, or “exaction” through land readjustment.

“Exaction” is a monetary or non-monetary “payment” or service to the community that authorities require from a property owner in return for receiving a land development permit. The “exaction” system helps the city to access the land it needs to provide public infrastructure to service a growing city, whilst rent from the land offers the city a valuable source of income to pay for infrastructure development.

Moderated by Ioannis Ampazis, European Commission Directorate-General for Justice and Consumers, participants identified the key challenges in implementing economically sustainable New Urban Agendas as lack of a structural approach of planning investment to ensure planned outcomes, insufficient funds for urban development and inefficient use of funds available, insufficient cooperation between different levels of government and agencies, fragmented administration, as well as unclear and overlapping mandates.

The workshop’s final recommendations included: focusing on central role of finance in green sustainability; including urban areas in national development and economic planning and using urban development as a vehicle to increase productivity; and raising awareness in cities and encouraging societies to prioritise balanced investment to ensure active participation of different stakeholders. 

Financing Sustainable Urban Development as a vehicle for productive growth, driver of Green and Climate-smart Recovery