The governments of Germany and Luxembourg announced new funding of EUR 50 million for the City Climate Finance Gap Fund (Gap Fund), a multi-donor fund, implemented by the World Bank and the European Investment Bank with partners. These resources will support the development of low-carbon and climate-resilient urban investments and will nearly than double the fund’s capitalization, bringing it to EUR 105 million, one of the largest early-stage technical assistance funds for cities and climate.
The Gap Fund is a multi-donor initiative funded by the Governments of Germany and Luxembourg and jointly implemented by the World Bank, and the European Investment Bank (EIB) in partnership with Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It provides much-needed funding for early-stage technical assistance and capacity building so that cities from low- and middle-income countries can operationalize their climate action plans, develop robust project concepts, and access climate finance resources. Since its establishment in 2020, it has supported 183 cities in 67 countries.
The Gap Fund is currently supporting the cities of Mombasa (Kenya), and Porto Alegre (Brazil) in the development of their climate action plan. In Pristina (Kosovo), it supported the assessment of the city’s spatial development plan and the development of recommendations for compact urban growth consistent with the city’s own climate targets. To support adaptation to increased climate risks, the Gap Fund supports the implementation of the stormwater management plan in Mbombela (South Africa) and the identification and prioritization of investments in nature-based solutions for climate resilience in Kinshasa (Democratic Republic of the Congo). The Gap Fund also supports climate mitigation in cities, including the development of climate-smart waste management strategies in cities like Mangalore and Kolar (India) and energy-efficiency measures for public and private buildings in Palembang (Indonesia). It also supports sustainable mobility through the development of a strategy for e-mobility in Buenos Aires (Argentina) and a pre-feasibility study for the deployment of electric school-buses in Bogota (Colombia).
The Fund helps cities identify, prioritize, and develop impactful investments, while lowering the perceived risks of potential follow-on providers of finance. The linkage with downstream resources for detailed project preparation and financing is built into the design of the Gap Fund, which includes matchmaking between Gap Fund supported projects and potential sources of additional support and financing as one of its priorities. With its Euro 105 million in Technical Assistance grant funding, the Gap Fund aims to leverage more than Euro 4 billion in climate investments for cities.
The Gap Fund benefits from strong partnerships with city networks and global initiatives including the Global Covenant of Mayors for Climate and Energy, the City Climate Finance Leadership Alliance, C40 Cities, and ICLEI – Local Government for Sustainability.
The Gap Fund partners collaborate closely to share knowledge, empower cities in addressing climate challenges, and find ways to connect them with follow-on support and funding.