Key messages

 

Meeting the costs of adaptation to climate change in urban areas is a major challenge. However, municipalities across Europe have found ways and innovative mechanisms to overcome the challenge of financing adaptation.

comments (2)

There is a variety of financing options ranging from governmental sources over banks and private investors up to mainstreaming measures into existing budgets including both grants and loans. While some project might only require one financing source, other projects might require a combination of different sources.

comments (0)

Financing adaptation measures that change the way a city is built and organised rather (transformational adaptation)  than specific protection measures can be difficult as the measures themselves often are situated in other sectors, such as water management, transport, nature, health etc. Taking, however, the comprehensive perspective of overall and integrated urban development can reveal overall lower costs and many favourable additional benefits. 

comments (2)

In order to be cost-effective, it is crucial to make an economic analysis of different options and with a broad perspective on the city as a whole (the economic case) first and then select the best adaptation option before looking for financing. Such an approach might reduce the funding needs.

comments (0)

The demonstration of co-benefits of an adaptation measure or of any other measure where adaptation is a co-benefit (e.g. green urban areas reduce storm water burden and lower high temperatures, but also provide space for nature and recreation) increases the chances for funding as acceptance in public or financing institutions is normally higher. This requires to add adaptation issues to the overall city planning.

comments (0)

A limited amount of “seed money” from a municipal government or other funders can leverage adaptation measures and also mobilise in-kind contributions from other stakeholders in form of staff or areas dedicated to the task.

comments (0)

The key for adaptation teams in municipalities is to have the capacities to find, apply for and negotiate the various financing streams - often in parallel. That requires human resources and know-how.

comments (1)

A precondition for successfully obtaining project financing from financing institutions, such as loans, is the ‘bankability’ of the project. Each financing organisation sets their own criteria for bankability, commonly criteria such as technical viability, economic and financial viability, macroeconomic or legal context are evaluated. Not many adaptation measures can be considered as bankable yet.

comments (0)

The implementation of measures needs more than financial resources. Successful implementation also needs sufficient awareness and support among decision-makers in the public and private sector.

comments (2)