NDF - Financing for climate change and development projects

Addressing climate challenges in fast-growing Latin American cities


NDF has approved a EUR 4.0 million grant financing to support the Emerging and Sustainable Cities Initiative (ESCI).

NDF will in partnership with the Inter-American Development Bank provide new support to the Emerging and Sustainable Cities Initiative (ESCI). ESCI addresses fast-growing intermediate (0.5-2.0 million inhabitants) cities’ environmental, urban and fiscal sustainability in a changing climate. ESCI began in 2011 with a grant from IDB to support five pilot cities in Latin America and at present, ESCI is planning to reach 50 cities in 2015.

NDF was the first financing partner to join ESCI with the approval of a EUR 2.1 million grant in December 2011 to support climate profiles and action planning for Cochabamba (Bolivia), Managua (Nicaragua), and Tegucigalpa (Honduras). The results are consolidated Action Plans with prioritised actions that reflect local priorities and have a high level of local and national support. The successful outcome of the first phase led to a proposal from IDB to NDF for additional NDF support to the three cities to overcome the climate change challenges identified in the Action Plans. Through dialogue IDB and NDF selected the most climate relevant activities to be included in a second phase.

The new EUR 4.0 million NDF grant will finance pre-investment studies to make some of the identified priorities into bankable projects. For each city, activities (interventions) have been identified that are vital for reducing CO2 emissions and/or vulnerability to climate change. Some of these interventions (where incentives do allow) will be structured as public private partnerships in order to mobilize additional private capital to finance execution. Where it could be relevant for the individual city it will be explored to use and provide linkages to Nordic urban experiences and solutions.

Latin America and the Caribbean have the fastest growing urban population rate in the world. The region went from 41% in 1950 to more than 75% urban population in 2010. It is therefore not surprising that cities play a key role in Latin America in overcoming the challenges of climate change both in terms of mitigating its scale and reducing the population’s vulnerability to its negative impacts.

The project will be implemented by the IDB’s special ESCI team in close collaboration with local government entities, civil society organisations, private sector entities and research institutions.

The implementation of the project will require consultants to undertake studies and technical assistance. IDB procurement rules will be followed in the procurement of consulting services.

The video below gives an introduction to the project concept and scope.
More information
C68 Latin America: Emerging and Sustainable Cities Initiative (ESCI)