State of Decision Making in Indonesia - A Case Study

Transcription

1 Session II: From Planning to Investment Defining Bankable projects Capacity Development for Improved Urban Infrastructure Preparation and Financing Joris van Etten Capacity Development Coordinator, Cities Development Initiative for Asia (CDIA)

2 Asia s Urban Challenges

3 SOLID WASTE MANAGEMENT Infrastructure Solutions Setting Priorities Make BRIDGE Projects WATER TRANSPORT URBAN REGENERATION MASS RAPID TRANSPORT AIRPORT Link Bankable Projects POWER SUPPLY WATER SUPPLY ROAD NETWORK to INDUSTRIAL PARK Financing

4 CDIA Scope and Approach Through a demand driven approach, CDIA assists cities to implement their development strategies Infrastructure Investment Project Cycle Up-stream Down-stream City Development Plan/Strategy Infrastructure Investment Prioritization Pre-Feasibility Studies Linking projects to financing Feasibility Study Financing Arrangements Capacity Development Project Implementation Operation & Maintenance

5 Linking Cities to Financing The CDIA partnership established in 2007 is jointly managed by ADB and GIZ and financially supported by ADB, BMZ, Sida, Government of Austria and the Shanghai Municipal Government with about $58 million ( phase). Budget for phase is $65 million. CDIA is assisting medium sized Asian cities to bridge the gap between their development plans and financing of their infrastructure investments, with emphasis on: - Urban environmental improvement - Urban poverty reduction - Improved governance - Climate change mitigation or adaptation

6 Selected City Interventions Palembang, Indonesia Integrated Urban Transport Project CDIA Support: US$ 370,000 Sector Interventions 1. Strengthen existing BRT system (including park and ride and improvement water transport) Investment Value: US$ 20 million 2. New bridge Investment Value: US$ 155 million Linking to Finance Central government, local commercial banks, Public- Private Partnership, European Investment Bank Establishment of Project Implementation Unit Detailed design for Special Purpose Vehicle (SPV) with public and private stakeholders

7 Selected City Interventions Pakse, Laos CDIA Support: US$ 439,000 Sector Interventions 1. Drainage, Flood Protection and Sanitation Investment Value: US$ 25.6 million 2. Solid Waste Management Investment Value: US$ 1.8 million 3. Green Infrastructure Investment Value: US$ 6.2 million Linking to Finance ADB Pakse Urban Environmental Improvement Project

8 Selected City Interventions Ulaanbaatar, Mongolia CDIA Support: US$ 196,000 Sector Interventions Energy efficient retrofitting of pre-cast panel apartment buildings Investment Value: 1 st Phase: US$ 40 million Entire Program: US$ 450 million Linking to Finance Potential ADB funding

9 Implementation Status Approved support applications for 48 cities in 14 countries including 67 Pre-Feasibility Studies (PFS) 35 PFS and 2 urban infrastructure investment programs completed in 25 cities Estimated infrastructure investment value of projects under preparation about $ 5 billion - CDIA inputs represents approx. 0.25% of this Potential sources of investment financing identified in all approved cases, firmed up for 14 PFS in 12 cities

10 CDIA Capacity Development Approach 1. Strengthening capacity at city level as part of direct interventions 2. Working through Regional/National Partner Organizations to achieve scale, relevance and sustain impact 3. Establish Cities Development Institute for Asia in Manila with nodal offices established in Shanghai, New Delhi and Singapore Urban infrastructure investment planning and programming Pre- Feasibility Studies PPP in urban infrastructure development

11 The Climate Financing Challenge: the Demand side Stabilization pathway: To limit the increase global temperature of 2 0 C or lower (UNFCCC) Mobilization of US$ 100 billion each year for climate change mitigation and adaptation activities Additional estimated investment/financial flows of US$ billion for mitigation actions to reduce GHG emissions by 25% below 2000 levels in 2030 Additional estimated investment/financial flows of US$ billion per year by 2030 for adaptation actions

12 Climate Financing Supply Side Identify the options for cities to obtain financing for their climate change mitigation and adaptation activities National study in Indonesia Regional Study in the Asia Pacific

13 Results Which funds can be used for: Mitigation/Adaptation Level of intervention Nature of support Type of intervention supported Conclusion: Only 3 out of 15 international funds are accessible to cities (Global Climate Partnership and bilateral funds - EU, Japan)

14 Climate Financing: strengthening existing options Budget of City Authorities (Local Budget) Mainstreaming city development plan and resulting budget with climate change mitigation and adaptation measures; National Programs (National/State level budget) Climate change mitigation and adaptation measures supported by line ministries supported by mainstreaming actions; Tax and Levies E.g. possibility to provide incentives for financing climate change measures, specifically ear-marked for climate-related activities (carbon/environmental tax); Municipal Bonds and Loans Not yet seen much in developing countries

15 Financing Climate Change: Private Sector Financing Public Private Partnership Mainstreaming climate change mitigation and adaptation with infrastructure development: e.g. PPP in waste management and drinking water services Corporate Social Responsibility Voluntary support from private sectors Carbon Market Limited window for financing support due to complicated and long mechanism and low carbon price Driven by climate policy with private sector as the player in the field

16 Stimulate synergy between partners to bridge the gap between demand and supply Cities: prioritize climate change investments Technical assistance: assist cities to formulate technically, socially, economically, financially, environmentally sound projects. Financial assistance: enhance financing mechanisms accessible to cities - Guarantees Governments: enhance modalities for cities to access climate change financing Private sector: finance those elements of projects which are revenue generating Case: Quy Nhon, Vietnam, Integrated Flood Management and Drainage project

17 Cities Development Initiative for Asia Suites , Hanston Building Emerald Avenue, Ortigas Center, Pasig City 1600 Metro Manila, Philippines