Sustainable Urban Development (DUS) - Improve the access of Brazilian cities to financing for integrated, inclusive climate resilient projects

Project details
Country: 
Brazil
Beneficiary: 
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Donor organisation: 
Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH
Associated enterprises: 
AFC Consultants International
Department: 
Climate Change, Circular Economy & Solid Waste
Project volume: 
899,796 €
Currency: 
€
Value of services: 
899,796 €
Start of project: 
October, 2023
End of project: 
April, 2025
Project background: 

The rapid urbanization in Brazil has intensified the demand for adequate housing, public equipment (education, health, and security) and collective spaces (road systems or green areas). This urban expansion has led to territorial imbalances, budget deficits, and financial stresses, exacerbated by the climate crisis and the associated costs of adaptation and mitigation. Due to their increasing budget constraints, Brazilian cities are seeking new financing strategies to meet growing infrastructure needs but lack the capacities to develop eligible projects that meet the standards of international financiers or the requirements of the private sector. The project seeks to bridge this implementation gap and improve the alignment between investment needs in cities and financing options.

Service description: 

The project is divided into three work packages with the following specific tasks:

Work package 1

  • Assess the financial and economic viability of urban projects and recommend improvements.
  • Support the preparation of financing plans and business models for urban projects.
  • Support municipalities in structuring projects and business plans for cooperation with the private sector or other actors
  • Assist municipalities and communities in the procurement and contracting stage and with risk management.
  • Provide expert advice on the application of urbanistic and land-based financing instruments.
  • Support municipalities in the articulation with regional, national, or international development and financing institutions as well as fund management authorities.
  • Identify the potential of innovative approaches of local economic development within the implementation of the demonstration projects (share economy, circular economy, urban agriculture, etc.).
  • Provide technical and methodological assistance in structuring small investments funds for incentivizing local economic development.
  • Extract lessons learnt, prepare dissemination of good practices, provide input for the national level, and promote peer leaning with other municipalities.


Work package 2

  • Advise Brazilian national government institutions on national framework conditions necessary for international climate finance, especially on the design of programs for sustainable urban development.
  • Support Brazilian national government institutions and operating agents with regulatory frameworks and guidelines for implementation, standards for quality and risk management, selection criteria and application procedures in existing or new support programs.
  • Support Brazilian national government institutions in setting up advisory services for municipal administrations that improves the structuring of bankable projects incl. the application of land-based financing instruments.
  • Contribute to the local implementation of national strategies (e.g., Green Investment Strategy for Regional Development) with pilot measures in demonstration projects.
  • Provide advisory for structuring blended finance and/or business models for cooperation with the private sector in integrated urban development projects, additional to work package 1.
  • Deliver punctual contributions from the financing perspective for measuring, reporting and verification (MRV) with relevance for accessing international funding for sustainable urban development.
  • Articulation with other stakeholders in the financial sector, national and international.


Work package 3

  • Review and improve financial guides for municipalities focusing on the structuring of bankable projects.
  • Prepare training modules (e-learning, workshop and/or mentorship) for leading professionals in national, state, and municipal governments, financial institutions and development agents.
  • Provide expert advice for the selection of advisory products for upscaling in Brazil.
  • Contribute to knowledge management and capacity building of 6 (six) selected municipalities and to the MCid.
  • Contribute to established sustainable urban development networks with finance inputs, good practices and lessons learnt.
  • Contributions to conferences and workshops.
Objectives: 

Overall objective: The project aims to improve the access of Brazilian cities to finance for integrated, inclusive and climate resilient projects.

Specific objectives

  • Selected Brazilian cities must be enabled to prepare and implement fundable investment projects for integrated, inclusive and climate resilient urban development.
  • Brazilian national government institutions (especially the Ministry for Cities) must be enabled to support Brazilian cities in accessing finance for integrated, inclusive and climate resilient urban development.
Result: 

The conditions for implementing integrated, inclusive and climate-resilient urban development projects are improved.

Output 1: Selected cities have introduced local approaches to integrated, inclusive, and climate-resilient urban development.

Output 2: National instruments for the implementation of integrated, inclusive, and climate-resilient urban development are available to the Ministry for Cities (MCid).

Output 3: The provision for knowledge transfer between actors of integrated, inclusive, and climate resilient urban development is extended with a focus on networks and capacity development.

Currency: 
€