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UN-Habitat and partner convene meeting on ‘Financing Urban Sustainable Development in Latin America’
Bogotá, 16 March 2016—Over 40 international experts on finance and urban development last week converged in Bogota, Columbia for the first regional meeting on financing urban sustainable development in Latin America. The meeting organized by the UN- Habitat and Inter-American Development Bank (IADB) with support of Colombia’s Regional Financial Institute for Development Findeter, constitutes a partnership between development agencies, civil society and the private sector for the design of alternative mechanisms to finance urban infrastructure projects.
The director of Sustainable Cities Initiative, Ellis Juan, from Inter-American Development Bank, indicated that there is a financing gap that amount to USD 650 million only for pre-feasibility studies, not considering the cost of financing. Elkin Velasquez, Director of UN-Habitat’s Regional Office for Latin America (ROLAC) took the participants through the challenges of urbanization and finance in terms of the New Urban Agenda that will come from the Habitat III process. Marco Kamiya, coordinator of UN-Habitat’s Urban Economy and Finance Branch, presented the basic financing scheme “Sustainable Urban Investment Fund (SUIF)”, that will allow local city governments throughout the region, to start thinking on a mechanism to obtain revenue stream to finance the development of integrated urban interventions.
The specific objectives of SUIF efforts are to:
- Mobilize domestic credit for basic infrastructure projects that benefit citizens and improve conditions for economic growth
- Lower costs of borrowing, including bond issuance, and encourage more states and municipalities to seek capital market financing
- Help states and municipalities engage directly with private investors through the market
- Provide incentives for local governments to improve financial management and reporting practices
- Promoting an innovative approach for urban sustainable development as part of urban integrated operations
Experts in private and public finance, as well as in urban development highlighted the need of city administrations to access funding beyond traditional sources like taxation or national government transfers. The potential impact of developing a sustainable municipal finance market is great in that it will empower national and sub-national authorities to meet the basic needs of the citizenry and help stimulate economic growth. UN-Habitat and IADB will continue working together to propose a strategy for a pilot project during the first semester of 2016.