Global Climate City Challenge

For the purpose of this Challenge we will not be able to provide Technical Assistance to early-stage projects. For more information on the stage of the project cycle at which the projects will be eligible please question below "At what stage in the Project Cycle should I apply?".

The following activties can be supported:

• Refining/ complementing existing feasibility, cost-benefit analysis demand and market studies to bring the project to a bankable stage consistent with international standards and EIB financing requirements; Final technical design for project components and assessment of different technological options to optimise climate impact and co-benefits;
• Climate risk and vulnerability assessments at the city level and/or those focusing on the area in which the project will be located;
• Support in the identification of different/ complementary financing opportunities available to cities for climate action projects, including on the mobilisation of private sector investment and potentially off-balance sheet solutions to help to address municipal borrowing constraints, combining commercially priced financing with grant financing;
• Upgrade of Environmental and Social Impact Assessment (ESIA) or Environmental Impact Assessment (EIA) and related studies/plans on environmental and social aspects;
• Support in the development of a Procurement Plan for the project.

Eligible projects include urban projects which contribute to climate change mitigation or adaptation, typically in one or more of the following areas. Specific eligibility criteria apply to climate change mitigation categories, which are not fully listed below.

Climate change MITIGATION

• Urban Transport
  • Urban mass transit (public transport buses, bus rapid transit, underground and above-ground rail rapid transit, tramways, urban ferries);
  • Non-motorised transport (bicycles and pedestrian mobility, including dedicated pedestrian zones, bicycles lanes and bike-sharing schemes);
  • Integration of transport and urban development planning leading to a reduction in the use of passenger cars;
  • Transport demand management measures including ITS dedicated to reduce GHG and other emissions;
  • Low emission light road vehicle fleets;
  • Energy efficiency in transport infrastructure and equipment projects;
  • Infrastructure for alternative fuelled transport (Charging stations and other infrastructure for electric or hydrogen vehicles).
• Energy efficiency
  • Energy savings/ energy efficiency in existing buildings;
  • Cost-effective investments to improve the energy performance of existing public lighting systems;
  • District heating / cooling systems - new systems and rehabilitation or extension of existing systems if energy efficiency criteria are met;
• Waste management
  • Collection bins and trucks for separate collection/transport of recyclables and bio-waste;
  • Material recovery facilities (MRFs) for sorting and refinement of recyclable materials;
  • Composting, anaerobic digestion facilities for source segregated and separately collected bio-waste. Closure of existing landfills and dumpsites, with installation of landfill gas recovery system including energy recovery and if that is not economically justified, flaring;
  • Installation of landfill gas management system on landfills with installation of landfill gas recovery system including energy recovery and if that is not economically justified, flaring;
  • Projects targeting reduction of plastics discharge in rivers and oceans, and subsequent recycling, e.g. port waste management infrastructure, in-river/in-sea plastics collection vessels/equipment.
• Greening of urban areas
  • Afforestation/Reforestation;
  • Development of urban green open spaces (i.e. parks, , recreational areas) or creation of green corridors;
• Water and wastewater
  • Rehabilitation, new or extension of Wastewater Treatment Plants (WWTP) leading to (net) methane emissions reductions and is not already a compliance requirement, or with energy efficiency savings. Only capacity serving existing population is eligible;
  • Rehabilitation, new or extension of Sewer Networks leading to (net) methane emissions reductions, and is not already a compliance requirement, or energy efficiency gains;
  • Rehabilitation, Sectorization and Metering of water supply - Energy efficiency from reduction of non-revenue water (NRW);
  • Energy efficiency from rehabilitation of drinking water treatment plants.
• Renewable energy and co-generation
  • Integration of rooftop photovoltaic in buildings and other forms of distributed renewable energies;
  • Water heating and other thermal applications of solar power in urban sectors;
  • Sustainable biomass and biogas - electricity generation and thermal applications;
  • High efficiency co-generation of heat and power – new plants or rehabilitation/conversion of existing plants, not including coal as a fuel;
  • Storage systems (battery, mechanical, pumped storage) that facilitate integration of renewables, or increase renewable energy production;
  • New information and communication technology, smart-grid and mini-grid that support renewable energy, and advanced smart metering;
• Eco-districts and urban extensions that exemplify a combination of climate mitigation and adaptation eligible activities.

Climate change ADAPTATION

• Projects which contribute to climate change adaptation are those projects where either it has been established that the project is exposed to negative impacts of climate change (increase in temperature, sea level rise, increased severity of storm surge, floods, droughts, cyclones and other weather-related extreme events) based on reliable evidence, or where it has been established that the project and its operation and the services it provides will be affected by these impacts.
• It will be important that there is or will be during project development, an appropriately scoped assessment of the context of the risks, vulnerabilities and impacts related to climate variability and climate change, which could be at project or city level; the project developer has a clear intention to address these impacts and the resulting vulnerabilities through targeted, well-defined measures.
• Examples of projects which contribute to climate change adaptation (non-exhaustive list) and which may be relevant, depending on the location and specific climate change vulnerabilities of the city concerned, are:
  • Green and blue infrastructure measures designed to reduce the effects of worsening heat waves, urban heat islands, flash flooding and/or improve flood management in cities vulnerable to increased risk of heat waves, flooding and other related weather-related extreme events;
  • Retrofitting existing infrastructure with measures to reduce damage and/or disruption resulting from climate change e.g. relocating electrical systems away from basements exposed to flooding;
  • Surface water management, including Sustainable Urban Drainage Systems (SUDS) in cities vulnerable to increased severity of flooding or droughts if combined with water storage;
  • Water storage, conservation and reuse; harvesting and rainwater in cities vulnerable to increased severity of droughts;
  • Underground cabling for utilities in cities vulnerable to increased severity of high wind, flooding and other weather-related extreme events like snow/icing;
  • Seawalls and storm surge barriers, dune reinforcement, protection of existing natural barriers and creation of marshlands/wetlands as buffer against sea level rise and increased severity of flooding;
  • Disaster Risk Management and associated infrastructure – evacuation routes, dual use buildings, shelters, backup systems, early warning equipment, etc. in cities vulnerable to worsening droughts, floods, cyclones and other extreme events;

Investment programmes combining investments across two or more sectors are especially welcome, recognising that climate action is multi-sectoral and may involve investments across the full range of a city’s investment plan.

If your city/local government applies for the “Transformative Actions Program” 2018 managed by ICLEI and your project meets the eligibility criteria for the Climate in Cities Challenge, you can submit the application form you already prepared to GlobalClimateCityChallenge@eib.org. We are also collaborating with other networks that are members of the GCOM, including C40. In addition, if your city has submitted applications via the CDP Matchmaker, it can also indicate so.

The Challenge targets projects under preparation but which may need additional technical assistance to complete/refine their preparation in order to become bankable or to reach international standards. The degree of maturity at the stage of application may vary depending on the nature and complexity of the project, but it should be already clear what the project definition covers, the project concept, there should be at least a preliminary estimate of the project cost, and typically, feasibility studies will already have started.

The Challenge is targeted at projects that are sufficiently advanced and need technical assistance to complete/refine their preparation in order to become bankable. The preparation of general strategies, broad policy or background studies involving problem diagnostics, as well as support to enhance the overall creditworthiness of a city will not be eligible. Once the scoping exercise is complete and the pipeline of projects identified, the programme may be eligible for a future phase of the Challenge.

The selection of the 6 cities that will receive support from the EIB under the Challenge will be made based on the following criteria:

• Scale and level of ambition of climate action impact of the investment;
• Political commitment of the city administration (or local government) to implement the proposed climate action project or investment programme and significant needs;
• Maturity of the project or project pipeline;
• Technical, economic and financial viability of the proposed project or programme;
• Potential to comply with the EIB sector specific eligibility criteria;
• Institutional and financial capacity of the promoter to implement the project and potentially receive EIB funding;
• Innovation, replicability and potential for scaling-up and mobilising private investments;
• Potential to generate additional positive environmental, social and climate benefits;
• Population benefitting from the project;
• Bankability of the investment in terms of sources of cash-flow for loan repayment, loan security, availability of co-financing.

Moreover, the final selection will be made to ensure that the sample of projects is sufficiently diversified in terms of:

• Geographical distribution;
• Types of sectors/projects;
• Types of exposure to climate risks;
• Types of assistance required or different stages in the project cycle;
• Types of beneficiary.

If you are selected the Technical Assistance will be provided free of charge but the local administration would need to demonstrate its commitment to implement the project/programme for which it receives financial support from the EIB, in particular through dedicating staff to act as counterparts to EIB, GCOM and their experts, and confirming interest to obtain financing for project implementation.

We would welcome applications from consortia of utility or other municipal companies and/or groups of cities, if a single leader presents the application. The leader can be one of the concerned municipalities or an entity acting on behalf of them (e.g. association of municipalities or financial intermediary such as a local bank who is interested in financing urban climate action projects in the concerned municipalities). The leader needs to demonstrate sufficient institutional and financial capacity to implement the project and potentially receive EIB funding.

In order to ensure that the advisory and financing provided under the Challenge concretely benefits cities, the concerned municipal and local authorities will be required to provide a proof of their commitment to the proposed project after the first screening phase (e.g. a letter of support). In case the municipal or local government is not applying directly, the applying entity (e.g. utility, municipal company, financial intermediary), this entity will provide some evidence (e.g. reference/supporting letter) from the city showing that their project is in line with the objectives of the municipality or local government.

The EIB adopts a holistic approach towards the financing of urban development projects through a variety of financial products, both directly, through investment loans and framework loans, and indirectly, through loans to financial intermediaries and investments in equity funds. Investment loans are typically used to finance single large-scale projects while framework loans are used to finance multiple small and medium sized projects, usually in the size range €1-50 million, over a period of normally 3-5 years, which generally corresponds to a city’s capital investment programme. With framework loans the EIB does not need to appraise each scheme upfront, thereby allowing for more flexibility for the city.

Intermediated loans are provided to commercial or public sector banks, which then on-lend to final beneficiaries. This product allows the EIB to reach smaller municipalities and smaller projects that could not be financed through a direct EIB loan. Finally, the EIB invests in equity funds in order to catalyse private sector investments in various areas of urban infrastructure (e.g. renewable energy, energy efficiency, social infrastructure, environmental and transport infrastructure).

Projects selected for the Challenge will be supported to make them more bankable. However, they would still need to be presented to, and approved by, EIB’s management bodies. Entering the Challenge implies a commitment to work closely with the EIB and its partners on project preparation, so that they can potentially be co-financed by the EIB, but it does not create a legal obligation to borrow from the EIB.

All queries can be addressed to GlobalClimateCityChallenge@eib.org. Depending on the number and nature of questions received, an interactive Q&A session may be organised. Details will be published on this website and all parties submitting a query will be informed.

Applicants can submit multiple applications for projects meeting the minimum size criterion of €30 million total project cost. In case the city has multiple projects of smaller size they can be aggregated and submitted as a single application.