Enabling city resilience bonds

This article shows how bonds can bridge the resilience finance gap in cities. For the first time in history, more people worldwide live in towns and cities than in rural areas. However, international climate finance has largely overlooked cities’ needs, leading to an urgent requirement for innovative and local mechanisms to generate finance for urban resilience.

This report concludes that the time is right to embrace city bonds as a significant, tried and tested instrument of sustainable finance through which to tackle climate change in cities and urban areas, and that puts city governments in the lead on investment decision making. To ensure uptake, there is a need to identify and meet critical capacity gaps within city governments; for example, to strengthen fiscal protocols, enhance accountability mechanisms and build investment planning capability. There is also a need to develop approaches to manage fiscal risk such as risk pooling and strengthening financial performance to improve creditworthiness.