Resilience planning can uncover investment opportunities at the city level

Resilience planning can uncover investment opportunities at the city level

By Will Bugler

Unlocking investment for new infrastructure is vital for municipal governments to ensure climate-resilient urban development.

Despite this, countries in Asia are faced with a huge infrastructure investment gap. The Asian Development Bank (ADB) estimates that countries in Asia and the Pacific will need to commit over $26 trillion for infrastructure spending by 2030 if the region hopes to sustain growth while meeting the combined challenges of poverty reduction and climate change. [1] However, the principal brake on investment is not lack of funding, or a lack of will from large investors, but a lack of identifiable, bankable projects at the city level.

To address this, cities are in need of support to develop robust, integrated, and climate-responsive infrastructure plans. Investing in a resilience approach to urban planning can support municipal governments to develop such plans and unlock a multitrillion-dollar urban investment opportunity.

Traditional approaches to infrastructure planning, led by national governments and which prioritizes infrastructure investments based on national planning, have not been successful in identifying good quality, infrastructure investments at the city level. A recent report from the Global Facility for Disaster Reduction and Recovery (GFDRR) and the World Bank identifies several reasons why such ‘top-down’ planning approaches have been unsuccessful, and challenges the myth that cities in the developing countries “just need access to global capital markets” to invest in resilience. Three of the most significant challenges identified in the report were:

  1. Lack of government capacity – Chief amongst areas of capacity deficit identified were: (i) the inability to plan and implement resilience investments; (ii) an inability to generate sufficient revenue to meet existing obligations and maintain ongoing programs; and, (iii) general challenges to infrastructure development.
  2. Lack of private sector confidence – The report found this to be driven by governance constraints (financial regulations and complexity, the policy environment including corruption, political uncertainty, and absence of financeable proposals) as well as lack of data and standards to benchmark asset performance.
  3. Challenges in project preparation – The report found that governments had limited experience with project identification and preparation and limited resources to commit to project preparation. This means that the pipeline of well-developed, financeable urban infrastructure and resilience projects offered to investors is limited.
     

There is some evidence to suggest that resilience approaches to urban planning can go some way to addressing these issues. Work under an ongoing ADB trust fund provides support to city-level resilience planning methods that aim to deliver better-quality infrastructure and uncover more bankable infrastructure projects in cities across Asia.

The Urban Climate Change Resilience Trust Fund (UCCRTF) under the Urban Financing Partnership Facility administered by ADB, with contributions from the Rockefeller Foundation and the Governments of Switzerland and United Kingdom, is working in at least 25 cities in 8 countries in Asia to embed resilience into ADB’s investments. The fund is a significant testing ground for resilience approaches to urban planning, as it aims to link $150 million of funding to over $1 billion of ADB loans.

Resilience planning for urban development

To date, UCCRTF has approved over $100 million in projects that support climate-resilient urban development, and a significant proportion of this funding has gone to upstream support to urban planning at the city level. The trust fund has begun to address many of the challenges for developing a pipeline of investable infrastructure assets beginning in the early stages of urban planning.

Identifying suitable infrastructure developments and projects, based on good quality urban plans, requires effective, long-term town-planning and climate vulnerability assessments based on good quality local data. This is no small barrier for Asian cities, especially the thousands of smaller cities with limited municipal budgets. One statistic that demonstrates the stark reality of the capacity deficit in city planning is the number of qualified urban planners – in the United Kingdom there are 38 per 100,000 population; in India there are 0.23.

The lack of planning at the local level means decisions over new infrastructure for cities are often decided at the national level. This top-down approach tends to favor larger physical infrastructure investments, and risks being influenced by the prevailing political climate at the time.

The UCCRTF approach to project identification and prioritization fundamentally shifts the emphasis of urban infrastructure planning from the domain of national governments to city-level decision makers and the citizens themselves. The diagram below shows the four stages of UCCRTF planning. It establishes a systems-centered approach that emphasizes local-level agency, stakeholder engagement, and knowledge and capacity building as central parts of ADB’s infrastructure investment processes.

Phases_Planning_Diagram.png
Phases of urban climate change resilience (UCCR) planning supported by UCCRTF activities.

Introducing a systems-centered approach in Bangladesh
 

In Bangladesh, the UCCRTF approach was piloted in seven towns. The ADB project officer secured funding from UCCRTF to support the towns of Bagerhat, Cox’s Bazaar, Faridpur, Gopalganj, Kushtia Myenmensingh, and Patuakhali to prepare climate-resilient integrated urban plans. A team of consultants prepared climate risk and vulnerability assessments (CRVA) for the towns to determine the problems faced due to changes in climate. 

The analysis included climate modeling information on the cities, combined with city-level data on disasters. Socioeconomic information was also incorporated in order to target interventions for the poor and vulnerable. Local knowledge on historical disasters was gathered through focus group discussions with the local residents.

The resulting CRVAs were then used to guide the preparation of climate-resilient integrated urban plans (CRUIPs) and the formulation of actionable priorities for implementation in the next five years.

The CRIUPs, developed for five cities (Cox’s Bazaar, Faridpur, Gopalganj, Kushtia, and Myenmensingh) through the UCCRTF technical assistance were carried forward into an ADB loan project, and provided reference for the identification of priority investments.

For Bagerhat and Patuakhali, the UCCRTF provided additional financing of $6 million for the construction of cyclone shelters, drainage, emergency access roads, and the preparation of an integrated drainage plan and a fecal and solid waste management plan. These interventions were also identified through the CRUIP process.

Promoting resilience in Pakistan
 

The resilience planning approach was also applied in Pakistan, particularly for the two regions of Greater Abbottabad and Greater Peshawar, and for three cities: Abbottabad, Mardan, and Peshawar in Khyber Pakhtunkhwa Province.

Here, the CRVAs combined two approaches, the top-down approach with climate risk assessments through climate modeling and the bottom-up approach with vulnerability assessments of vulnerable areas and communities through focus group discussions. In addition, guidelines for mainstreaming climate risks and vulnerability assessments into regional integrated urban plans and city development plans (CDPs) were also prepared.

In Khyber Pakhtunkhwa, cities were supported to integrate the assessments into their outline CDPs and project prefeasibility studies. This formed part of the evidence base for final CDPs and the identification of suitable investments.

UCCRTF supported the identification of climate-resilient urban infrastructure and recommended innovative climate resilience measures and technologies for the engineering designs of proposed projects. Furthermore, it supported institutional capacity building on climate resilience at the municipal level.

One statistic that demonstrates the stark reality of the capacity deficit in city planning is the number of qualified urban planners – in the United Kingdom there are 38 per 100,000 population; in India there are 0.23.

A new approach

UCCRTF’s approach breaks with traditional processes in several important ways. Firstly, being positioned within ADB, project officers can tap UCCRTF support for a host of ‘soft’ resilience-building measures such as capacity building, training, and peer learning at the city level. Investment in soft measures that boost the urban planning capabilities at the city level will help to increase the quality and quantity of bankable infrastructure investment opportunities.

Secondly, the process by which the UCCRTF develops the climate assessments, urban plans, and infrastructure prioritization is characterized as ‘iterative-inclusiveness’. This involves understanding urban climate vulnerability and infrastructure needs through a thorough stakeholder engagement process that goes well beyond consultation. This entails many workshops and meetings with representatives from local communities, the private sector, and government at the municipal, regional, and national level.

While still in its early stages, the UCCRTF process is beginning to show its value. In particular the resilience approach has been effective in: 

  1. improving city-level environment and climate data;
  2. improving the quality of urban plans;
  3. identifying investable infrastructure opportunities; and
  4. providing a robust evidence base for project developers.

The UCCRTF approach to urban resilience planning has the potential to transform the way multilateral development banks and other institutional investors identify and prioritize urban infrastructure investments. Embedding resilience principles into the project planning phases may help to find bankable investment opportunities that contribute to creating livable, resilient cities.


Cover photo by FancyCrave on Unsplash.

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