How the EBRD is helping cities go green
Cities face many environmental issues, ranging from local air quality concerns, traffic congestion and limited land resources to pressure on water resources and the challenges associated with municipal solid waste.
Now climate change is challenging cities both to mitigate their impacts and adapt to changing conditions - given that, according to the International Energy Agency (IEA), around two thirds of energy use occurs within urban systems.
The scale of investments needed to establish green cities is enormous. The IEA estimated in 2012 that for climate change mitigation alone, over the next decade, nearly US$ 600 billion annually in additional investments are required globally to avoid catastrophic climate change effects.
The need to act to make cities greener is acknowledged on the global stage. Goal 11 of the UN Sustainable Development Goals is to “make cities and human settlements inclusive, safe, resilient and sustainable”.
This goal will be the focus of the forthcoming UN Habitat III Conference (the United Nations Conference on Housing and Sustainable Urban Development, set to take place in Quito, Ecuador, from 17 – 20 October 2016), where the heads of all MDBs, including the EBRD, are to issue a joint statement committing to increased action and investment for green cities.
Still, it is important to invest the money wisely, and this is what the EBRD’s work on Green Cities is trying to achieve.
In response to the pressing environmental issues and the global call for action, several EBRD teams and offices in the countries where we work have developed the Green Cities Programme (GrCP).
The Green Cities Programme builds on the EBRD's two decades of experience investing in municipal and environmental infrastructure – representing over €700 million and 800,000 tonnes of CO2 mitigated annually and multiple local environmental benefits helping address public health issues and improve citizens’ well-being.
Using this experience, the programme will apply the EBRD’s business model, combining bankable investments with technical cooperation and policy dialogue.
The Green Cities Programme’s approach will allow beneficiary cities to prioritise between several sectors when targeting the most effective ways to address its environmental challenges (and make the best use of their money).
Key to the programme is the Green City Action Plan (GCAP). This is a document that articulates a particular city’s sustainable development vision, strategic objectives and actions and investments to address priority environmental issues and meet the plan’s objectives.
Beyond prioritising investments and reforms, the GCAPs are also expected to be a good policy paper helping to promote awareness and additional financing for greener cities.
An example of a project to be financed under the framework is the Yerevan Metro III extension. This project involves energy-efficiency upgrades to the Armenian capital’s existing metro system. This project goes beyond business as usual because, crucially, the loan document requires the city to undertake a Green City Action Plan.
The aim is that through this plan and the associated priority investment list, the city can identify further innovative investment opportunities that could benefit from EBRD or other finance.
At a September meeting to discuss the GCAP with the EBRD, Yerevan Deputy Mayor Vahe Nikoyan praised the plan, saying, “in the conditions of constant growth of Yerevan's population, it is very important for the city to provide a balance between the environment and our citizens. Working out a Green City programme is highly important. We expect significant positive influence on the environment, reduction of the volumes of emissions and effective use of natural resources. Yerevan Municipality is ready to help implement the programme."
Another example is the Chisinau public buildings project in Moldova. Public buildings provide significant potential to improve energy and resource efficiency as well as an opportunity for public leadership in greening the city.
Together with the European Investment Bank (EIB), the EBRD is targeting a €20 million public building renovation programme. As with the Yerevan metro project, the Chisinau public buildings project will require the city to develop a GCAP.
The EBRD is making the switch in Moldova’s capital, Chisinau from conventional high-pressure lanterns to low energy LED lights.
The investment is also supported by the EIB and TaiwanICDF.
If successful, the EBRD plans to expand the Green Cities Programme to other countries, with the Western Balkans being a potential target area.
With the help of investment, technical assistance, and transformational policies such as GCAPs, the programme shows how it is possible to answer the call to significantly increase green city investments.