Author: The Cities Climate Finance Leadership Alliance Secretariat  

As COP28 closes with a groundbreaking commitment to transition away from fossil fuels making headlines across the media landscape, the Cities Climate Finance Leadership Alliance (CCFLA) team has taken some time to reflect on the progress made during this year’s conference in driving our mission forward—to accelerate urban climate finance.  

After the COP28 Presidency announced that $467 million had been mobilized for local climate finance within the initial four days of the conference, expectations were high for a historic space for the urban in the COP agenda. As the forum wraps up, let’s revisit some key developments.  

COP28 was a historic conference for subnational and urban governance. The inaugural Local Climate Action Summit (LCAS), co-hosted by the COP28 Presidency and Bloomberg Philanthropies, was a first-of-its-kind event that saw over 250 mayors, governors, and local leaders come together for the first time at a COP meeting. The LCAS culminated in the launch of the Coalition for High Ambition Multilevel Partnerships (CHAMP) initiative designed to increase multi-level collaboration in developing, financing, and achieving Nationally Determined Contributions (NDCs), signed by over 70 countries and counting. This presence at COP is key because cities are at the forefront of climate change and are already playing a crucial role in mitigating and adapting to the impacts of the climate crisis. To continue doing so, cities need to have their voices heard and must have access to finance, and the LCAS provided an important space for this conversation to happen.  

COP28 also marked the convening of the second Ministerial Meeting on Urbanization and Climate Change, bringing together over 1000 attendees to discuss the role of multilevel action in achieving the Paris Agreement and the importance of urban climate finance to reach this goal. During the Ministerial, over 40 Ministers signed the ‘Joint Outcome Statement on Urbanization and Climate Change’ signaling their backing of 10 outcomes aimed at furthering support for multilevel climate action in the COP process moving forward.  

In addition to these historic engagements, COP28 saw a huge number of side events, including many hosted by CCFLA member organizations. In the lead-up to COP28, we tracked a record 55 side events in our members’ events calendar and were pleased to see the profile of cities and urban climate finance have greater prominence than ever before.  Below, we summarize our key takeaways from COP28 as they relate to our mission of accelerating urban climate finance.  

Multilateral Development Bank Reform
The role of Multilateral Development Banks (MDBs) in accelerating the provision of urban climate finance was a key topic of discussion at COP28. Building on the launch of CCFLA’s latest report, ‘Accelerating Urban Climate Finance in Low- and Middle- Income Countries: An important strategic dimension of MDB reform’, the CCFLA team hosted two events and participated in another four to discuss how MDBs can increase the amount of funding they provide for urban climate infrastructure projects through direct investments, facilitation of private finance, and working more closely with financial intermediaries, both private and public.  

This fed into a wider discussion on the role of Public Development Banks (PDBs) as financiers for urban climate projects. Many of these PDBs highlighted their intention to provide more urban climate finance through innovative financing mechanisms and facilitating private sector investment, but also flagged barriers to their involvement, including a lack of capacity and lack of project pipelines that would benefit from the support of MDBs.  

COP28 also saw the MDBs release a Joint Statement on Climate and Development, which included a reference to assisting sub-national entities to develop long-term strategies for sustainable development. While this represents progress, there is still a lot of work to be done to increase the quality and quantity of climate finance from MDBs reaching cities, and CCFLA will continue to advocate for this in 2024. 

Adaptation and Resilience
Adaptation and resilience were high on the agenda going into COP28 following the launch of the Sharm El Sheikh Action Agenda’s (SAA) first Implementation Report that highlighted developments across multiple systems including human settlements and finance.  

Discussions on financing for adaptation and resilience took place across many side events, with emphasis placed on how to scale investment in urban resilience investments, particularly from the private sector. Developments such as EIB’s just resilience approach, and the first investment from the Urban Resilience Fund (TURF), a facility utilizing blended finance to increase the availability of funding, were highlighted as promising mechanisms for increasing both public and private investment in urban resilience. 

Finance for Nature
Nature took center stage at a number of side events at COP28, with both the challenges and opportunities for investing in urban nature-based solutions highlighted during the forum. 

One solution to emerge was the Urban Nature Program which was launched by a consortium of organizations during the Local Climate Action Summit with a goal to unlock financing and accelerate nature-positive urban development through policy, project preparation, and investment support. ICLEI’s Guide to Biodiversity Financing for Cities and Regions was also launched providing information to cities on how to access finance for urban nature-positive projects, and the announcement of a Cities’ Science-Based Targets for Nature program, launched with many of CCFLA’s partners, further elevated the status of the financing needs for urban nature projects. 

Loss and Damage 
COP28 achieved significant strides in addressing loss and damage, culminating in an agreement to operationalize the long-anticipated Loss and Damage Fund, along with the first pledges amounting to around $700 million from nation states. From an urban perspective, the agreement includes a provision to ensure that subnational entities in developing countries have direct access to the Fund’s resources, marking a win for urban climate finance for loss and damage.  

Building on this development, the launch of C40’s report, ‘Loss and damage: Challenges and opportunities for city leadership,’ helped to explain the key challenges faced by cities and the pathways for managing loss and damage, which this Fund will support with, and UCLG’s Structural Dialogue on Loss and Damage will continue to champion the importance of the urban element in loss and damage.  

Innovative Financing Initiatives
COP28 witnessed a flurry of groundbreaking announcements unveiling innovative solutions poised to bridge the gap in urban climate finance. These included the launch of the Catalytic Cities initiative from Catalytic Finance Foundation, designed to deliver new blended-finance vehicles for urban climate investment. 

The City Bridge Facility, an initiative from UNCDF and ICLEI, is another mechanism that was launched at COP28 and is designed to provide technical and financial support to secondary cities in Least Developed Countries using a range of innovative financial mechanisms. A further example, launched by AMUF and FMDV during COP28, is the Urban Opportunity Fast Forward Initiative (UFFI) which aims to leverage political, technical, and strategic innovations to close the urban financing gap in African cities. 

COP28 made significant strides in amplifying the voice of cities around the world, and witnessed a number of major developments that will help to increase the flow of climate finance to cities that need it. Although there remains substantial work to close the urban climate finance gap, the CCFLA team departs COP with a sense of optimism, fueled by the progress achieved. We eagerly anticipate continuing our collaborative efforts with members to accelerate urban climate finance throughout 2024.