Cities are building new financial pathways
Turning infrastructure needs into investment opportunities
Current urban climate finance flows are USD 831 billion per year, far short of the minimum USD 4.5 trillion needed per year to rapidly reduce emissions and strengthen urban resilience.[1] Many cities, particularly in emerging and developing economies, have limited ability to secure public or private capital for essential infrastructure like clean energy, low-carbon transport, energy efficiency, waste management, and flood protection. Climate breakdown costs the world an estimated USD 16 million per hour in damages – affecting human lives, infrastructure, and property. The cost of inaction will far exceed the investments required to build a resilient, equitable future. Yet the adaptation investment gap is massive, with only 8.4% of needs being met.
Sustainable urban finance can be a powerful tool to support global development goals, but there are critical gaps in city capacity, private sector financier incentives, national government alignment, and enabling policies that support access to necessary finance at the local level. Cities are uniquely placed to rapidly deploy funds to address climate change. Mayors make the decisions that determine whether communities receive clean, resilient services like public transport and waste management. They can also build political support and forge partnerships to bring more funding to cities.
C40 helps transform how and where this money flows to shape greener, healthier and more resilient cities. We work with cities to structure climate projects that attract investment from development banks, institutional investors, and private financiers. Every climate project is an opportunity to create good green jobs, cut emissions, and protect the people who need it most.
Breaking down the barriers to climate finance
Cities understand the complexities of accessing climate finance. That’s why effective solutions must:
Reach communities that need protection most
Climate finance must reach projects in areas facing the worst floods, heat, and pollution, not just wealthy areas with easy access to capital.
Move fast enough to match climate urgency
With emissions rising and impacts worsening, finance systems must deliver infrastructure in months and years, not decades.
Create economic opportunity locally
Every climate investment should generate good green jobs and build wealth in the communities it serves, especially for workers transitioning from fossil fuel industries.
Work for cities with limited resources
Solutions must help all municipalities, regardless of credit rating or income scale, access the capital they need to protect residents.
Build resilience for the long term
Climate infrastructure must protect communities from future shocks while generating the revenue streams that sustain ongoing investment.
How C40 supports cities to access climate finance
C40 provides member cities with specialised support to navigate climate finance landscapes and develop bankable projects. This includes initiatives such as:
- Finance Academies where city officials are connected with technical experts.
- Capacity building programmes where city staff develop expertise in project development and sustainable investing.
- Chief Finance Officer networks where CFOs share perspectives and receive tailored support.
- Investor engagement support for pitch development.
The resources below connect different stakeholders with the tools and opportunities they need to collaborate on climate finance solutions that work for cities, investors, and communities.
Access technical assistance for bankable projects
For over 10 years, the C40 Cities Finance Facility has helped mayors and city leaders build sustainable capacity and access technical assistance to structure projects that attract private capital while delivering community benefits.
Connect with cities developing innovative financial approaches
The Clean Investment Forum enables investors to discover stable returns in urban climate infrastructure. Connect with cities that are developing revenue-generating projects like district heating and electric transit systems.
Develop comprehensive project preparation support
UrbanShift supports policymakers in building pipelines of bankable city projects. Partner with cities to develop comprehensive project preparation support that meets both climate goals and investor requirements.
Frequently asked questions
How can mayors and city leaders make their projects more “bankable”?
Cities can strengthen project pipelines by preparing clear technical studies, aligning projects with climate goals, and demonstrating social and economic benefits. Support is available through initiatives like the C40 Cities Finance Facility, which helps cities turn priorities into investment-ready projects.
What is the most effective way to scale up climate finance for cities?
There is no single solution. It requires a mix of approaches: climate-specific financing instruments such as green bonds, increased grant and concessional support, enabling national policies, and stronger collaboration between cities, funders, and investors. Scaling up also means addressing inequities, ensuring finance reaches vulnerable communities and Global South cities that currently receive only a small share.
How can we measure whether our climate investments are actually creating equitable outcomes?
Look for metrics like: number of good, green jobs created in underserved communities, reduction in energy poverty, improvement in air quality across different neighbourhoods, and levels of community participation in climate planning. C40 cities track outcomes like healthcare access for informal workers, energy bill reductions for residents, and involvement of marginalised groups in decision-making.
What kinds of projects are most in demand for climate finance in cities?
Cities are prioritising investment in clean energy, zero-carbon buildings, resilient public transport, waste systems, and adaptation measures such as flood management and cooling infrastructure. These sectors not only cut emissions but also improve public health and create good, green jobs.