Financing urban and local development - Background paper

The international community is devoting great energy to the critical task of financing sustainable development post-2015 and looking towards the 3rd Conference on Financing for Development (FfD3) in Addis Ababa. A huge volume of public and private investment is needed to reduce poverty, cope with climate change and promote prosperity in the coming decades. Many countries face a sizable infrastructure gap and anticipate new demands from population growth and continued urbanization (more than 2.5 billion urban dwellers by 2050, mostly in developing countries). Estimated requirements vary but are as high as $90 trillion. The vast demand for productive infrastructure investment coincides with unprecedented global liquidity in search of investment opportunities.

This background paper, released in March 2015, aims first to deepen the advocacy work in favor of acknowledging local governments’ core role in the development agenda and for the attainment of the Sustainable Development Goals, and then to analyze the various financial mechanisms to improve for LRGs to be able to fulfill this role.