Global Development Incubator

The Capital Advisory Platform for Sustainable Urban Infrastructure Projects (CAP)

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To learn more about – or provide significant funding to – this project, please contact Lever for Change.

Project Summary

Too few sustainable infrastructure projects are being developed in the fastest growing cities in sub-Saharan Africa. This is partly because investors are not in the initial urban planning phases, thus, municipalities ultimately propose projects that are not aligned with investors’ financial and economic requirements. Further, many potential projects are in sectors deemed not “commercially viable.”CAP will leverage UN Habitat’s existing technical assistance to developing cities and incorporate finance professionals in the initial urban planning stages. Working with select municipalities and investors, CAP will support the identification and structuring of a pipeline of derisked investable projects thereby contributing to SDG 11 – making cities more sustainable, resilient, inclusive and safe.Through CAP, considerably more urban development projects for the world’s poorest urban populations will be financed and ultimately developed. This includes urban development for the most marginalised populations including slum dwellers, internally displaced people and those afflicted by natural disasters.

Problem Statement

Today, 4.2 billion people live in cities and that number is growing by 1.5 million each week, such that by 2050, 68% of the world’s population, or 6.7 billion people will live in cities . Ninety percent of this urban growth will occur in Asia and Africa and is concentrated in coastal cities that will also be significantly impacted by climate change. This is fuelling an urban infrastructure financing gap that is today in excess of 3.2 trillion dollars. The infrastructure development journey begins with the formulation of urban development plans by cities and municipalities. This work is often led by urban planners and developers, and in many countries is completed with technical assistance from agencies including UN Habitat. Urban development plans are created using principles that emphasise spatial, administrative, demographic and geographic considerations, while finance emphasises economic potential, appropriate risk allocation, returns, time horizons and the strategic prioritisation of competing opportunities. Too few sustainable infrastructure projects are being developed in the fastest growing cities in sub-Saharan Africa. This is partly because investors are not in the initial urban planning phases, thus, municipalities ultimately propose projects that are not aligned with investors’ financial and economic requirements. Further, many potential projects are in sectors deemed not “commercially viable," they include SDG aligned sectors such as slum upgrading, crisis redevelopment, water and sanitation, low cost mobility, and public green space.

Solution Overview

CAP will leverage UN Habitat’s existing technical assistance to developing cities and will deploy a team of finance experts, the taskforce to work with local and national governments early in the planning stage to ensure bankability. To achieve strong connection and market relevance, CAP will engage private investors and developers to understand their investment requirements. Further the platform will provide advisory and project preparation support to advance concepts along the infrastructure development pipeline. For high impact sectors that are poorly understood, CAP will develop guides, toolkits, and benchmarks that capture financial and non- financial metrics. Finally CAP will connect capital providers to projects.Key markers of progress include: number of sectors mapped and understood, greater demand for CAP services from municipalities and strong investor engagement with the pipeline.Ultimately, CAP aims to unlock an additional $500 billion in capital for urban regeneration and development of at least 30 municipalities in subsaharan Africa. Over the five year grant period, we hope to meaningfully increase the number of projects that are well scoped, meet investment standards, and past the feasibility hurdle. This pipeline will lead to investments and developments over the next five to ten year period. We also want to have a clear, replicable approach that can be applied by municipalities, developers and other project sponsors in the key sustainable urban development sectors that are currently poorly understood. CAP's work will have broad direct impact in specific municipalities, and wider impact through knowledge dissemination.

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