2023

ACCELERATING
CLIMATEFINANCEWhite Paper.

DisclaimerT

he views, opinions, positions and recommendations expressed in this White Paper are solely those of the authors, task
force members and contributors and do not necessarily reflect the views of the U20 or any of its chairs, conveners, andpartners. Many of the references in this White Paper will direct the reader to sites operated by third parties. Neither
the institutions nor the authors of this White Paper have reviewed all of the information on these sites or the accuracy orreliability of any information, data, opinions, advice or statements on these sites.
The White Paper should be referenced as follows:
Urban 20 (2023) White Paper on “Accelerating Climate Finance”, India

Accelerating
Climate FinanceWhite Paper

Table of Contents

01
02
03
04
05
06
07

Setting the context
Avenues of climate financeKey enablers for mobilising climate
financeTechnical assistance and capacity
requirements
Recommendations across G20 nations
to access and manage
climate finance
Bibliography
AnnexureContributors

U20 ADVISORS
Hitesh Vaidya
Director, National Institute of Urban Affairs (NIUA), India

Nilesh Prakash Rajadhyaksha
Programme Director - Urban Strategy Unit, NIUA, India
Head - U20 Technical Secretariat

Kanak Tiwari
Programme Director - Urban Strategy Unit, NIUA, India
Head - U20 Technical Secretariat

TASK FORCE MEMBERS
Naim Keruwala (Convener)
Program Director, CITIIS, National Institute of Urban Affairs, India

Divya Sharma
Executive Director, Climate Group, India

Emil Ancewicz
Head of Cities and Urban Development Policy, Foreign, Commonwealth & Development Office (FCDO), British High Commission, UK

Hervé Breton
Deputy Director, Agence Française de Développement (AFD), India Office

Neha Kumar
Head-South Asia Program, Climate Bond Initiatives, India

Shruti Narayan
Regional Director - South & West Asia, C40 Cities, India

Vibhuti Garg
Director-South Asia, Institute of Energy Economics and Financial Analysis, IEEFA, India

6 Urban 20 2023 White Paper

RESEARCH TEAM
Amasikha Dey
Deputy Team Leader, U20 Unit, NIUA, India

Asif Raza
Senior Program Officer, CITIIS, NIUA, India

Juhi Sah
Program Associate, NIUA, India

Radha Karmarkar
Program Officer, CITIIS, NIUA, India

Shashank Mishra
Senior Associate, NIUA, India

Uttra Dasgupta
Knowledge Officer, CITIIS, NIUA, India

DESIGN TEAM
Kapil Kumar
Associate, Urban Strategy Unit, NIUA, India

Kaveri Bahure
Research Associate, Climate Centre for Cities, NIUA, India

Radhika BaviskarIntern, NIUA, India

Akarsha Jamuar
Young Fellow, NIUA, India

Accelerating Climate Finance 7

Abbreviations
CBDR
CCFF
CIF
CIP
CTF
DFI
ECB
EMDC
ESC
ESG
ETS
EV
G20
GBP
GCF
GEF
GHG
ICMA
ICMA
IFC
LDCF
MDB
PPP
SCCF
SCF
SFWG
UNDP
UNEP
UNFCCC

Common But Differentiated Responsibilities
Climate Change Financing Frameworks
Climate Investment Fund
Climate Investment Plan
Clean Technology Fund
Development Finance Institution
European Central Bank
Emerging Markets and Developing Countries
Emerging and Sustainable Cities Program
Environmental, Social and Governance
Emissions Trading Systems
Electric Vehicle
Group of Twenty
Green Bond Principles
Green Climate Fund
Global Environment Facility
Greenhouse gas
International Capital Market Association
International Capital Market Association
International Finance Corporation
Least Developed Countries Fund
Multilateral Development Bank
Public-Private Partnership
Special Climate Change Fund
Strategic Climate Fund
Sustainable Finance Working Group
United Nations Development Programme
United Nations Environment Programme
United Nations Framework Convention on Climate Change

8 Urban 20 2023 White PaperAccelerating Climate Finance 9

01/
Setting the context

Climate change is primarily driven by the increase ingreenhouse gas emissions, leading to a rise in global
temperatures. These changes disrupt ecosystems,
threaten biodiversity, and impact the availability ofresources essential for human well-being. Cities are central
to the climate change deliberations, both as one of the
major contributors to carbon emissions (almost 75% of
global carbon emissions come from cities) as well as the
key stakeholders likely to experience the highest impactsof climate change (almost 70% of global population will
live in urban areas by 2050). Rising global temperaturesand sea-levels, extreme weather events, and changing
precipitation patterns are expected to have widespreadconsequences that will expose urban areas to risks. Thereis an urgent need for cities to mitigate and adapt to theimpacts of climate change, which will require significant
investments.
While the exact investment requirements vary basedon city size, existing infrastructure, and specific needs, anumber of estimates are available for the global investment
requirements to support climate action. The International
Finance Corporation (IFC) estimated that the investment
potential in urban climate-related projects globally isaround USD 29.4 trillion by 2030 (IFC, 2021). An estimated
USD 1 trillion per year of climate finance1 will have to be
mobilised in external finance by 2030 for emerging markets
and developing countries (EMDCs) other than China (Reportof the Independent High-Level Expert Group on Climate
Finance, November 2022). The sustainable investment
opportunities in six urban sectors (waste, water, renewableenergy, electric vehicles, public transport and green
buildings) in emerging markets alone amount to USD 2.5
trillion annually up to 2030.
The origin of climate finance can be traced back to theUnited Nations Framework Convention on Climate Change(UNFCCC), established in 1992 to address the challenges
posed by climate change. The principle of “Common But
Differentiated Responsibilities” (CBDR) was also establishedthat recognised different capabilities and differing
responsibilities of individual countries in addressing climatechange. The concept of climate finance was further stressedin the Kyoto Protocol, adopted in 1997, and came into force

in 2005. In 2009, the Copenhagen Accord (a non-binding
agreement) set a goal of mobilising USD 100 billion per year
in climate finance by 2020 to support developing countries
in their efforts to address climate change. This was later
reaffirmed in the Paris Agreement, which was adopted
in 2015 and came into force in 2016 (OECD, 2022). The
UNFCCC also recognises the need for international financial
assistance to developing countries due to the asymmetry
between developed and developing countries in terms of
their contribution to climate change and their capacity to
manage it.
Several initiatives and mechanisms have been instituted
to mobilise climate finance. These include the setting up of
the Adaptation Fund, established in 2001 under the Kyoto
protocol; the creation of the Global Environment Facility(GEF) that manages two special funds—the Special Climate
Change Fund (SCCF) and the Least Developed Countries
Fund (LDCF) focused on projects in developing countries;
and the Green Climate Fund established in 2010 at the
COP16. Some of the other climate funds include Clean
Technology Fund (a multi-donor trust fund), Amazon Fund(set up as a REDD+ fund), the Forest Carbon Partnership
Facility, and others. Additionally, there are a range of otherclimate finance sources, including NBFCs, ECBs, debt frompublic and private banks, private equity investment, DFIs,
etc. that can be accessed by cities.
Climate finance flow has seen a steady increase over thelast decade, leading to a total of USD 665 billion of fundflows in 2020 as per the Climate Policy Initiative (CPI).
Global climate finance almost doubled in the last decade,with a cumulative USD 4.8 trillion in climate financecommitted between 2011 and 2020 (CPI 2022). Publicfinance contributed around 51%, with Development FinanceInstitutions, both multilateral and bilateral, accounting
for 71% of the public financing. While private sector
investments have increased, but this has not happened ata scale or speed that will be required to adequately meetclimate objectives. At the 15th Conference of Parties (COP15)of the UNFCCC in Copenhagen in 2009, developed countries
committed to mobilising USD 100 billion per year by 2020
for climate action in developing countries. However, as of2020, the total climate finance provided and mobilised by

1 The report of the Independent High-Level Expert Group on Climate Finance, November 2022, estimates that emerging markets and developing countries
other than China will need to spend around USD 1 trillion per year by 2025 (4.1% of GDP compared with 2.2% in 2019) and around USD 2.4 trillion per year by2030 (6.5% of GDP).

10 Urban 20 2023 White Paper

the developed countries was USD 83.3 billion, falling 16%
short of the target. Of this total, USD 48.6 billion (58%) was
for mitigation, USD 28.6 billion (34%) for adaptation, and
USD 6.0 billion (7%) for cross-cutting activities (CPI, 2022).
It must be noted that almost 90% of climate finance has
been focused on mitigation activities, with very little financebeing directed towards adaptation projects.The mismatch
between fund-flows toward mitigation and adaptation
sectors has been a longstanding debate.
There are several barriers to investment flows in urban
climate-related projects and development. These barriers
include (a) lack of awareness of the potential returns
and benefits associated with climate-related projects.
(b) inconsistent policies, unclear regulations, and a lack ofsupportive frameworks leading to uncertainties for investors(c) limited technical expertise and capacity within cities that
can hinder project conceptualisation, development andimplementation. Besides, countries and cities have different
administrative setups and jurisdictional limitations. For
example, urban development is a state subject in India, andthere are layers of jurisdictional enablers and limitationsin the functioning of cities. Other countries have different

approaches/ jurisdictions/ mandates. Different countries
also have different requirements for lending, financing,or raising funds. This means that every country needs
particular and contextual approaches and solutions toaccess climate finance for urban areas.
There is an urgent need to mobilise investments bycreating conducive policy environments. Cities can explore
innovative financing mechanisms such as green bonds,
revolving funds, and public-private partnerships to fundclimate-related projects. These mechanisms can attract
diverse sources of capital and facilitate investment flows.
Cities must also foster partnerships by collaborating withother cities, international organizations, financial institutions,and the private sector, to facilitate knowledge sharing,
capacity building, and access to funding sources. Building
partnerships can enhance investment opportunities andcreate a supportive ecosystem for climate-related projects.
This U20 white paper attempts to identify the critical levers
for improving climate fund flows to cities, particularly in thedeveloping context, and provide broad recommendations
for the way forward to accelerate climate finance.

02/
Avenues of climate financeUrban sector climate financing can come from various
sources, including government budgets, international
development assistance, institutional investors,commercial banks, public-private partnerships (PPPs),
municipal bonds, sovereign green bonds, impact investors,
philanthropic organisations, and multilateral developmentbanks. Cities can access climate financing for adaptationand mitigation projects from five primary sources:
A. Grants and subsidies from various sources such as
national governments, international organisations,and philanthropic foundations. These funds do notneed to be repaid and can be used to support specificinfrastructure projects or initiatives. Use of blended
finance mechanisms, wherein such capital can be used
as catalytic capital to leverage private sector investment
in sustainable development, will become important at
the city level especially while financing adaptation andresilience or assets which do not generate adequate
commercial returns.
B. Funding from development banks such as regional
development banks or international financial institutions,for project financing. These institutions provide loans,grants, and technical assistance for infrastructuredevelopment. Commercial banks and financial
institutions may also offer loans or credit facilities forurban infrastructure projects. These primarily operate
through multilateral/bilateral climate funds establishedat the global level to support climate-related projects
and programs in developing countries. These funds aim
to mobilise resources and provide financial assistance toaddress climate change challenges, promote sustainable
development, and help countries transition to
low-carbon and climate-resilient pathways. Multilateralclimate funds typically operate through a governancestructure involving contributions from developed
countries and decision-making processes that include
representation from both donor and recipient countries.
C. Issuance of sustainable debt instruments such as green
bonds, social bonds, climate bonds and sustainability
bonds, designed to finance projects and initiatives withpositive environmental or social impacts. The market
for sustainable debt has witnessed significant growth
in recent years as more investors and issuers prioritise
environmental and social considerations in theirfinancing activities. Climate bonds are a type of financial
Accelerating Climate Finance 11

Some examples ofmultilateral climate funds
are:a. The Green Climate Fund (GCF) is the largest multilateral climate fund establishedunder the United Nations Framework Convention on Climate Change (UNFCCC). It
was created to support developing countries in their efforts to mitigate greenhousegas emissions and adapt to the impacts of climate change. The GCF provides grants,
concessional loans, and other financial instruments to fund projects and programs inareas such as renewable energy, adaptation, and capacity building (GCF, 2023).
b. The Global Environment Facility (GEF) is a partnership between various international
institutions, including the United Nations Development Programme (UNDP), theUnited Nations Environment Programme (UNEP), and the World Bank. It provides
grants and concessional funding to support projects in biodiversity conservation,
climate change mitigation and adaptation, sustainable land management, and otherenvironmental areas (GEF, 2023).
c. The Adaptation Fund was established under the Kyoto Protocol of the UNFCCC
and serves the specific purpose of financing adaptation projects and programs indeveloping countries. It provides grants and concessional loans to support initiatives
that enhance the resilience of vulnerable communities and ecosystems to theimpacts of climate change (Adaptation Fund, 2023).
d. The Climate Investment Funds (CIFs) administered by the World Bank Group,
consist of several funding windows, including the Clean Technology Fund (CTF)
and the Strategic Climate Fund (SCF). These funds aim to provide resources forclimate-related investments in developing countries, particularly in areas such as
renewable energy, energy efficiency, and climate resilience. CIF also has a Smart
Cities Program which can be modified to mobilise cities climate finance (Climate
Investment Funds , 2023)

instrument specifically designed to raise funds forclimate-related projects and initiatives. Climate bonds
serve as a means for investors to allocate their capital
towards projects that address climate change, promotesustainability, and support the transition to a low-carbon
economy including climate mitigation and adaptation.
Various counties and respective Reserve/National Banks
have issued guidelines through which bonds can beissued in the market (Climate Bonds, 2023).
D. Partnering with private companies or investors underpublic-private partnership arrangements to financeinfrastructure projects. In these partnerships, the private
sector provides funding, expertise, and resources while
the city maintains ownership over the infrastructure.
Unlocking the potential of private financing will require
formulation of “bankable” projects and programme
proposals that have a favourable internal rate of returnand are supported by appropriate risk management
mechanisms, so that the projects are financeable.
E. Accessing Carbon markets is also a critical avenue forfunding climate-responsive initiatives in cities. Carbon
markets are mechanisms that facilitate buying andselling of carbon credits issued in lieu of reducing or
removing greenhouse gas emissions. These markets
provide a platform for entities to trade carbon credits
thereby incentivising emission reductions and promoting

12 Urban 20 2023 White Paper

the transition to a low-carbon economy. There are two
primary types of carbon markets: (1) Emissions Trading
Systems (ETS) - a market-based approach where a cap
is set on the total amount of greenhouse gas emissions
allowed within a specific jurisdiction or industry sector.
Under this system, emission allowances or permits areallocated to participating entities, such as companies orindustries. These entities can then trade their allowances
based on their emission levels. If an entity exceeds
its allocated allowances, it can purchase additional
allowances from entities with surplus allowances tocompensate for their excess emissions. (2) Carbon
offset mechanism - allows entities to compensate for
their emissions by investing in projects that reducegreenhouse gas emissions or remove carbon dioxidefrom the atmosphere. These projects can include
renewable energy installations, energy efficiency
initiatives, reforestation and afforestation projects, andmethane capture projects. When an entity invests insuch projects, it receives carbon credits equivalent to theemission reductions achieved. These credits can then be
traded or sold to other entities, enabling them to offset
their own emissions.

03/
Key enablers for mobilisingclimate financeA

ccessing climate finance requires a range of different
institutional tools, mechanisms, and modalities, alongwith specific capacities at various levels (national,
provincial and local) to put in place and operate suchmodalities. Planning for climate actions at the national levelmust be based on overarching developmental priorities. Thisrequires identification of actions based on robust climatechange scenarios and emissions baselines, development
plans, projections of impacts of actions, and a review ofinnovative solutions and practices available. Formulation ofrisk management mechanisms and other structures that
help in creating investible projects and initiatives is also
critical.
Relying on private or market funding may not yield
sufficient results in all sectors, particularly related tomitigation-related projects/ initiatives due to the difficulties
in managing financial bottom lines. Sectors like storm
water, heat and flood management, and other local public
goods may have to be addressed using public financing andinvestment solutions. Even though certain Public-Private
Partnerships (PPPs) may be practical, particularly in areas
like street lighting and electric vehicle (EV) charging stations,they shouldn’t be considered the only option. Thus, having a

Elements of Climate
Change Financing
Frameworks:

robust and diversified national framework that enables andactivates a diverse range of financing options depending
upon project context and needs will be essential to reduce
overt reliance on specific funding sources. Key elements ofsuch a national framework are given below:
A. Establishing a robust institutional framework is one
key essential. This involves creating clear governancestructures, policies, and regulations that support
climate action and facilitate the mobilization of financial
resources. It includes coordination among various
stakeholders, including government agencies, local
authorities, community organizations, and private sector
entities.
B. Cities should have supportive policies and regulations
that incentivise and promote climate action. This
includes creating by-laws aligned with climate targets,providing tax incentives, and promoting sustainable
practices. Clear policy signals encourage private sector
investment and help cities access different financing
options.
C. Enhancing the capacity of cities is crucial to accessclimate finance. This includes building technicalexpertise in areas such as climate science, renewableenergy, urban planning, and transportation. It enables

UNDP’s Climate Change Financing Frameworks (CCFFs) are meant to rationalise
climate change policies and national budget processes in a country, thus ensuring amore cohesive and comprehensive approach to incorporating climate finance into
the country’s public economic and financial management systems. CCFF has been
defined by UNDP in its Guidance Note on Climate Change Financing Frameworks, as a
“voluntary, whole-of government process to structure a more strategic approach toward
the mobilisation, management, and targeting of climate change finance”. The basic
elements of Climate Change Financing Frameworks (CCFF) are:a. The building of integrated climate governance;
b. Measures and instruments for ensuring accountability;c. The identification of institutional entry points that would bring both public and – tosome degree – private climate finance into national appraisals and prioritisation;d. The identification of institutional entry points to bring public climate finance into thenational budget;e. A definition of what constitutes climate change related activities;
f. A costing of planned responses to climate change;g. An assessment of available resources and ongoing financial flows to address climatechange mitigation.

Accelerating Climate Finance 13

stakeholders to identify and prioritize climate-related
projects, design projects that align with international
standards, and effectively monitor and evaluate project
outcomes.
D. Financial management capabilities andcreditworthiness should be developed to manage
climate finance funds transparently and maintaineligibility for financing.
E. Cities need to identify and develop a pipeline ofbankable green projects aligned with their climate
action strategies. This involves conducting assessments,
feasibility studies, and project design to ensure projects
meet the requirements of financial institutions andinvestors. Projects should be prepared in a way that
demonstrates financial viability, sustainability, andalignment with climate goals. There will be projects
that are crucial from a climate perspective but may
not be considered financially viable or bankable in the
traditional sense. These projects often face challenges
in generating sufficient returns or cash flows to attract
private investment. However, cities and governments
must recognize the importance of investing in suchprojects to address climate change and promotesustainability.
F. Access to accurate and up-to-date data is crucial
for evidence-based decision-making and projectplanning. Cities should focus on collecting, analysing,and disseminating climate-related data, including
greenhouse gas emission inventories, vulnerability
assessments, and impact evaluations. Robust monitoringand evaluation mechanisms allow cities to track projectprogress, identify areas for improvement, and enhanceaccountability to funders and local communities.
G. Building partnerships and networks is vital for cities toaccess climate finance. Collaborating with national andinternational organizations, financial institutions, andother cities facilitates knowledge exchange, access tofunding opportunities, and peer-to-peer learning. Strong
partnerships help cities leverage their resources, share
best practices, and present a compelling case whenengaging with climate finance mechanisms.
H. Engaging stakeholders and the local community inthe planning and implementation of climate projects
is crucial. This helps build consensus, enhance project
acceptance, and ensure that projects address the
specific needs and priorities of the community. Active
community participation strengthens the social andpolitical support necessary for accessing climate finance.
The next few sections highlight some of the key enablers
that can help cities overcome barriers and create anenabling environment that attracts climate finance,
facilitates the implementation of sustainable projects, andcontributes to global efforts in addressing climate change.

14 Urban 20 2023 White Paper

3.1 De-risking Climate Investments
Infrastructure projects typically face risks such as
financial risk, political & regulatory risk, technical risk,
environmental & social risk, operations & maintenancerisk, market risk, project management risk etc. The urban
infrastructure sector is perceived as a high risk sector
from an investment perspective due to number of adverse
characteristics as indicated in the box on next page, and therisk perception and financial concerns are even higher forclimate-responsive projects.
Addressing these risks is essential to attract climate
finance to urban areas. De-risking climate investments
requires proactive actions at various levels from different
stakeholders as given below:
A. Develop and strengthen policy and regulatory
frameworks that provide a stable and supportive
environment for climate investments. This includes clear
guidelines, long-term sustainability targets, incentives,and supportive laws and regulations.
B. Conduct comprehensive risk assessments to identify
and understand the specific risks associated withclimate investments. Develop risk management
strategies and mechanisms to mitigate and transfer
these risks.
C. Utilise financial instruments and innovative
mechanisms to de-risk climate investments. This may
involve blending different types of financing, such as
public and private funds, grants, concessional loans,and guarantees. Green bonds, climate insurance, andrisk-sharing facilities are examples of innovative
financial instruments that can help attract private sector
investment.
D. Enhance the quality of project preparation andstructuring to increase investor confidence. This includes
conducting feasibility studies, developing robust
business models, conducting thorough due diligence, andensuring clear project governance. Well-prepared andstructured projects are more likely to attract investors
and reduce perceived risks.
E. Strengthen the capacity of local governments andrelevant stakeholders to effectively manage andimplement climate projects. This includes providing
technical assistance, and capacity building to enhance
project management skills, financial literacy, and risk
management capabilities. Increased capacity reduces
implementation risks and improves project outcomes.

Factors causing highrisk perception in urban
climate projects:

a. Climate projects in urban areas often require integration and coordination acrossmultiple interconnected sectors such as energy, transportation, waste management,
and water supply, making them more complex and challenging to implement.
b. Inconsistent policies, lack of clear regulations, and potential volatility in politicalpriorities can create uncertainties for investors, making them hesitant to commit theirfinancial resources.
c. Urban climate projects may face challenges in achieving financial viability andgenerating sufficient returns on investment. Factors such as high upfront costs, long
payback periods, and uncertain revenue streams can make projects financially risky,deterring potential investors.
d. Urban areas often face specific climate-related risks, such as extreme weather
events, flooding, or heatwaves. These risks can impact the performance andresilience of climate projects, potentially leading to increased costs, delays, or project
failures.
e. Social and Political Risks such as resistance from local communities, conflicting
stakeholder interests, or opposition from influential groups.
f. Weak governance capacities of cities can lead to higher perception of legal andcontractual risks. Legal disputes, contract breaches, or delays in obtaining necessary
approvals can increase project risks and affect investor confidence.

F. Improve access to reliable data and information
related to climate risks, market opportunities, andproject performance. This enables investors to makeinformed decisions and assess risks accurately.
Enhancing data collection, monitoring systems,
and establishing platforms for data sharing andtransparency contribute to reducing investment risks.
G. Foster collaboration and partnerships between the
public and private sectors. Public-private partnerships(PPPs) can leverage the strengths and resources of both
sectors, increase opportunities for sharing risks andresponsibilities, and create a conducive environment
for climate investments. Establishing clear roles,
responsibilities, and legal frameworks for PPPs helps
build trust and reduces investment risks.
H. Facilitate knowledge sharing and networking among
stakeholders involved in climate investments. This
includes sharing best practices, lessons learned, andsuccess stories to build a collective understanding of risk
mitigation strategies. Platforms such as conferences,
workshops, and online forums can facilitate knowledge
exchange and collaboration.
I. Implement demonstration projects and pilot initiatives
to showcase the feasibility and success of climate
investments in urban areas. These projects serve asmodels and demonstrate the potential returns on
investment, attracting further private sector interest andreducing perceived risks for similar projects.
J. Foster long-term planning to facilitate creationof project pipelines aligned with long term climate
outcomes, and ensure continuity and stability.

3.2 Developing a Taxonomy of Climate
Projects
Green taxonomy is a framework that defines or groups
investments that can be called environmentally sustainable.
The term green taxonomy has been used in this paper in amuch broader sense that includes not only greens aspects,
but larger aspects of inclusiveness and sustainability. Thesetaxonomies aim to promote green finance, enhance its
growth, and channel more capital into climate responsive
projects. Taxonomy is indispensable for enhancing theefficiency of climate finance dissemination and providing
valuable guidance for banks, financial institutions, investors,
and businesses.
Low carbon and resilient development will require
investments at a pace and of a nature conducive tothe specific contexts of countries and their long-term
development strategies. Taxonomies should therefore be
as contextualised as possible in terms of their contribution
or consistency with low carbon and resilient development
pathways. Different countries also have different levelsof decentralisation when it comes to finance. While insome countries, local governments can take on debt
independently, in many cases, debt requires the national
government’s approval. It is therefore important thattaxonomies are tailored to the local context so thatthey can meet the needs of development in respective
jurisdictions. The challenge is to make taxonomies explicit,
robust, and creditable to guide capital flow towards theirintended purpose. Each taxonomy addresses specific user
requirements, with some covering sectors others may notinclude. Some national taxonomies go beyond climatechange and prioritise improving local environmental
conditions. Moreover, these taxonomies vary in their level ofdetail.

Accelerating Climate Finance 15

Developing a universally accepted and well-classified
taxonomy can be crucial in effectively addressing
environmental challenges. Such a taxonomy would
establish a global agenda, foster unified efforts towardsustainable economic activities, and enhance the efficiency
of investment decisions. Even in the absence of a universally
accepted taxonomy, various regulators, countries, andmultilateral banks have taken steps to establish theirtaxonomies. These initiatives aim to promote environmental
sustainability, guide the allocation and management ofsustainable funds, and facilitate transparent reporting on
the utilisation of these funds (Climate Bonds, 2023).
There are some common principles suggested by the WorldBank that could be followed by countries while developing
their taxonomies:

European Union’s“Taxonomy for
Sustainable Activities”

The European Union’s “Taxonomy for Sustainable Activities”, launched in July 2020 setsout six environmental objectives that economic activities must substantially contributeto in order to be classified as environmentally sustainable. The EU taxonomy also
sets specific technical screening criteria for each objective. These criteria establish
the thresholds that economic activities must meet to be considered environmentally
sustainable. For example, in the case of climate change mitigation, the taxonomy defines
specific greenhouse gas emissions thresholds that economic activities should notexceed. Annexure 1 gives a brief summary of a few taxonomies.

The development of climate taxonomies is at a nascentstage in most countries. The absence of a clear set oftaxonomies at the national level is one major limitationand poses challenges to access financing. The right set ofdefinitions can substantially enable multiple stakeholders
to channel their actions and induct confidence in thefinancing organisations to finance climate projects. Without
clear definitions, taxonomies, reliable data frameworks
and regulatory mechanisms, there is an opportunity for
fraudulent actions, commonly known as ‘Greenwashing’ of
projects, i.e. misleading presentation of an activity, product,or project as more environmentally friendly or sustainable
than it is. In the context of sustainable investments, it is asignificant concern and can undermine the credibility andeffectiveness of various efforts to address climate change
challenges. In addition to tackling “greenwashing”, taxonomy
will help companies and investors make more informed,
sustainable choices.
The taxonomy of climate projects at the city scale has its
own set of challenges and complexities. The Common
Principles for Climate Mitigation Finance Tracking (UNFCC)
provides invaluable insights into the sectors that are

16 Urban 20 2023 White Paper

A. Define its strategic goal.
B. Select environmental objectives relevant to the country’s
sustainable development priorities and agenda.
C. Specify sectors that are expected to deliver on theobjectives.
D. Assess and select specific investments in these sectorsthat contribute to addressing the selected environmental
objectives. Whenever possible, the criterion for
selection should be the expected performance of theseinvestments in connection with national environmental
targets.
E. Identify intended taxonomy users and beneficiaries, theirroles, and, ideally, their respective responsibilities in theimplementation and use of the taxonomy.
F. Outline reporting guidelines for market actors applying
the taxonomy.

probably eligible for global green finance. A cursory
examination of these principles reveals a wide array of
economic activities generally falling within the purview ofcities. This gives cities a unique opportunity to capitaliseon these taxonomies and direct green finance towards
climate projects. For example, in the context of India, the12th schedule of the Indian constitution assigns 18 functions
to municipalities/corporations, which encompass a diverse
range of responsibilities. There are noticeable overlaps
between these functions and the sectors identified in thetaxonomies established by several Multilateral Development
Banks (MDBs). This convergence opens avenues forcollaboration and strategic alignment. Convergent sectors
include water supply and wastewater management, solid
waste management, urban transport, buildings, public
installations, information and communication technologies,
energy, and capacity building. By ensuring alignments
between the functions assigned to the cities in individual
countries and globally available taxonomies, cities caneffectively tap into green finance opportunities for theirproject. This synergy will enable them to address pressing
environmental challenges while harnessing the benefits ofglobal green finance.

3.3 Creating Country-level Climate
Information Architecture/ Framework
There are several initiatives and actions being taken byvarious stakeholders based on their interest and areas ofengagement with the cities. Information and knowledge
about these initiatives remains fragmented and most of
the time not easily understandable or accessible. Thiscan lead to overlaps and redundancies and reduce theeffectiveness of climate financing and climate action incities. There is a need to develop a country-level climate
information architecture to capture, manage, anddisseminate climate-related knowledge and information.
This can support decision-making, policy development,
and climate action at the national, regional, and local levels.
The architecture aims to enhance knowledge capitalisationand dissemination to ensure informed decision-making
and effective responses to climate change challenges.
Although such architecture (even if inadequate) may exist
at the country level, such frameworks are largely absent at
the sub-national/ city levels. This means that there will beinadequate understanding of the level of transition achievedat sub-national/ city level or whether the transition isaligned with nationally set targets.
A coordinated effort will be required through creation ofknowledge hubs of reliable information, at a centralised or
decentralised level, considering country specific governancemodels. This may be in the form of a network of institutions
that may resemble “a hub and spoke model”. Such a
network of institutions focused on climate finance can help
bridge the knowledge gap, build capacity, and facilitate theeffective mobilisation of climate finance at the national andsub-national levels. Some key functions of the network of
institutions can be:
A. Serve as a knowledge hub for climate finance,
gathering and disseminating information on funding
sources, financial mechanisms, project design, andimplementation. It can compile and analyse relevant
research, reports, case studies, and lessons learned
to support informed decision-making and capacity
building.
B. Build capacity of the institutions involved to capture,sanitise and disseminate information pertaining to low
carbon assets (emissions, benchmarks, etc.).
C. Provide technical assistance and advisory services togovernments, local authorities, and project developers
in developing bankable climate projects. This caninvolve supporting project design, financial modelling,
stakeholder engagement, and facilitating access toclimate finance instruments.
D. Design, develop and organise capacity building
programs to enhance the understanding of climate
finance among stakeholders. This can include training on
project preparation, financial analysis, risk assessment,

accessing international climate funds, and integratingclimate considerations into investment decisions.
E. Contribute to policy development and advocacy efforts
related to climate finance. Network of institutions canfacilitate engagement with policymakers, stakeholders,and international platforms to promote favourable
policies and regulations.
F. Establish partnerships with national and international
stakeholders, including financial institutions,development banks, private sector entities, research
institutions, and civil society organisations to foster
knowledge exchange, leverage resources, and promotecollaboration in accessing and mobilising climate
finance.
G. Undertake research initiatives to address emerging
issues and gaps in climate finance. The network canconduct studies on innovative financial instruments,
explore new financing models, and evaluate theeffectiveness of climate finance mechanisms. Researchfindings can contribute to evidence-based policymaking
and facilitate the development of innovative financing
solutions.
H. Support in monitoring and evaluation efforts to assess
the impact and effectiveness of climate financeinterventions. This can involve developing performanceindicators, evaluating project outcomes, and sharing
lessons learned to improve future project design andimplementation.
I. Collaborate with other similar institutions globally to
exchange knowledge, share experiences, and foster
international cooperation in climate finance.

3.4 Enhancing Creditworthiness of Cities
Cities across the world suffer from issues such as low
revenue base, inefficiencies in governance, etc. which havea significant impact on their credit worthiness. As per
estimates by the World Bank only 4% of the largest 500
cities/ urban local bodies in developing countries (World
Bank, n.d.) are creditworthy in international markets andabout 20% are deemed creditworthy in local markets(Introduction to Climate Finance, n.d.). Cities with lowlevel of creditworthiness face challenges in raising funds
for new/ existing projects. Naturally, such cities remain
heavily dependent on grants from provincial or national
governments to meet the infrastructure demands andfor financing sustainability and climate related actions/projects. Achieving creditworthiness requires significant
reform across a number of parameters and this is a time
consuming process. Comprehensive steps are required to betaken to enable cities to make the transition.
By building creditworthiness, cities can enhance theirability to finance low carbon, sustainable and climate
resilient projects by facilitating issuance of bonds as well as

Accelerating Climate Finance 17

unlocking access to a wide range of private investments.
Developing the creditworthiness of the cities will benefit
multiple stakeholders. For example (a) Lenders can use
the creditworthiness assessments for credit extension
and risk pricing decisions (2) Cities can get interest rate
discounts for green loans against higher creditworthiness(3) Understanding current level of creditworthiness will alsoenable the cities to prepare a credit enhancement plan inorder to access finance.
While national governments will have to create anenabling environment and conduct regular assessments,
provincial or city governments will have to undertake
actions to enhance practices of accounting and financial
management. Higher financial autonomy to cities canfurther enhance their capacity for revenue generation andenhance their credit rating. A number of global initiatives
are supporting local bodies to build their creditworthinesssuch as the World Bank City Creditworthiness Initiative,
the C40 Creditworthiness Academy, or the Emerging andSustainable Cities Program (ESC) of the Inter-American
Development Bank (C40 Cities). Additionally, multi-lateraldevelopment banks and financial institutions can help set
up programmes to assign green credit ratings to cities.

3.5 Adopting Environmental, Social andGovernance Framework
The role of cities in addressing environmental and social
challenges will only continue to expand as a result of risingurbanisation trends. Cities and state governments canassess and tackle these socio-environmental concerns
using an environmental, social, and governance framework
while also ensuring sound overall administration. Dedicatedfunds and portfolios have been introduced by several
investors, and cities can access such funds by developing
systems that address environmental, social and governanceconcerns. This will also help in achieving better green credit
ratings and access to climate finance.
Such an approach requires local governments to takeactions across three core city government roles (as adaptedfrom the guidance available on the World Economic Forumwebsite) which are: (i) regulations, (ii) strategic planning, and(iii) service provision as given below:

AspectKey actions required from city governments

Environmental

Regulations: Adopt regulations that ensure reduced emissions across different sectors such as mobility,
energy, water and waste
Strategic Planning: Integrate net zero and other core environmental objectives into strategic city
planning such as city master plans. This can be in terms of policies for transit-oriented development,
mixed use and compact development, net zero buildings, adaptive reuse of built stock, planning forgreen-blue infrastructure, fostering green economies, etc.
Service Provision: Ensure provisioning of sustainable services that help the city achieve net zerotargets. This will involve adopting cleaner technologies, nature-based solutions, circular models forsolid waste and wastewater management, low carbon mobility, etc.

SocialRegulations: Develop policies and regulations to promote social cohesion and the inclusion ofvulnerable groups
Strategic Planning: Address social issues by incorporating them into local strategic plans with a clear
implementation plan and tangible actions. This will include strategies for implementing universal
accessibility, providing equal opportunity to all in the plan making process, etc.
Service Provision: Ensure adequate and inclusive provision of municipal services to all members ofsociety across sectors like water, energy, waste management, mobility, etc.

Governance

Ecosystem governance: Facilitate partnerships between different stakeholders such as civil society
groups, non-governmental organisations, international multilateral organisations as well as private
sector and government entities.
Transparency and accountability: Ensure transparency and accountability in the actions taken
through timely and open communication of city decisions, budgets and progress updates.
Financing and funding: Ensure the efficient allocation of financing and funding to projects andinitiatives that promote socio-economic development and environmental protection.
Supply chain management: Adopt supply chain management policies (e.g. procurement policies)that consider the social and environmental impact of suppliers and their production/ sourcing/procurement/ delivery practices.
Monitoring and oversight: Provide effective oversight and monitoring into the performance of the city
across different environmental and social parameters.

18 Urban 20 2023 White Paper3.6 Identifying a pipeline of Green
Projects as part of a Climate Strategy
Cities need to have a Climate Action Strategy
complemented by a pipeline of bankable projects alignedwith that strategy. This can significantly boost investor
confidence. Once bankable projects are identified, theyneed to be curated as part of a Climate Investment Plan
(CIP) to be financed through various available instruments.
Many of the core urban services such as water supply, solid
waste and wastewater management, etc. have enormous
potential for GHG mitigation, that can be realised throughExamples of green bonds
issued by cities in G20
countries

appropriate structuring and design (e.g. capturing methane
emissions from waste and wastewater, or adoption ofelectric vehicles in public fleets). These should be includedin the pipeline, thereby also ensuring that public finance will
be available for climate-related projects and the overall
CIP can have a mix of funds from public, private and other
innovative sources. It must be noted that accessing private
financial sources is not feasible for all urban projects, except
projects which have a higher probability of adequate
financial returns. Therefore, a bundle of bankable andnon-bankable projects needs to be created as part of thelarger climate strategy.

a. INR 3.03 billion (~USD 36.69 million) raised in green bonds by Indore city, India. The
proceeds will be used to fund a 60 MW ground-mounted captive solar photovoltaic
project in the Khargone district in Madhya Pradesh;b. USD 143 million raised by Johannesburg, South Africa, to fund projects across a rangeof sectors including 150 new dual fuel buses and conversion of 30 buses to biogas.
The city’s investment-grade credit rating helped them take the bond to market andreceive a positive response;c. USD 427 million raised via green bonds by Gothenburg, Sweden. The funds areused for climate change projects that promote the transition to low-carbon andclimate-resilient growth.

3.7 Exploring innovative climate
financing options
A. Green Bonds: are special bonds designed to promotesustainability and support projects related to theenvironment or climate. Funds generated from green
bonds are exclusively utilised to fund initiatives that
positively impact the environment, such as renewableenergy, carbon reduction and green buildings. Green
municipal bonds can potentially open up the market to
new investors who specialise in sustainable financing forinvestment in projects with environmental, social andgovernance considerations.
Cities can benefit by developing a bond market strategy
based on their creditworthiness. Linking the green/low
carbon projects to bonds will help build transparency
and improved financial management resulting in better
creditworthiness of cities. Aligning such city-based
projects with the green bond framework will also
ensure that the projects follow national/ international
performance requirements. Cities need to understandthe current green bond market and develop a green
bond market strategy based on the current market
flows, the city’s own issuance power, creditworthiness,
and ability to engage with potential bond issuers. Local
Bodies may leverage the Green Bond Principles (GBPs)
issued by the International Capital Market Association(ICMA 2021) to form a solid case to attract potential
private bond issuers.

B. Transition Finance: is a type of funding that supports
long-term, strategic GHG emissions reduction measures
undertaken by an agency. Transition financial support
is provided to transitionary assets or activities in
hard-to-abate sectors. These sectors typically have ahigh carbon footprint and face significant challenges
in achieving rapid and complete decarbonisation.
Transition finance aims to facilitate the transition ofthese sectors towards more sustainable and low-carbon
practices over time. A practical framework for transition
financing must be put into place that can support awhole-of-economy transition of GHG-intensive sectors
and firms. One such framework has been proposed by
the G20 Sustainable Finance Working Group (SFWP)
in 2022 for GHG-intensive sectors and firms to adopt
transition financing - encouraging internationalorganisations to develop principles for the same. The
five pillars and principles associated with transition
financing are (1) Identification of transitional activities
and investments, (2) Reporting of information ontransition activities and investments, (3) Developing
transition-related finance instruments, (4) Designing
Policy Measures, (5) Assessing and mitigating negativesocial and economic impact of transition activities andinvestment. Transition financing has gained momentum
during recent G20 presidencies, and the G20 Sustainable
Finance Working Group (SFWG) can become a starting
point for developing nations.

Accelerating Climate Finance 19

C. Climate risk insurance: With the increasing frequencyof extreme climatic events and disasters worldwide,
cities and their assets are exposed to high risk of the
impacts of such events. Growing rates of urbanisationand infrastructure development in cities further
increase the exposure. The cost of repairing damaged
infrastructure due to disasters or climate events add tothe cost borne by the government agencies. In low- andmiddle-income countries natural hazards and poor
infrastructure cost households and firms an estimatedamount of USD 390 billion a year (World Bank, 2019),
due to lower insurance penetration levels and highvulnerability to natural disasters.
In the case of public sector entities, government assets
such as infrastructure and utilities are usually notinsured, except when infrastructure is developed throughprivate developers such as metro rail transport systems
or other PPP projects. Cities can de-risk their assets
by opting for insurance and enhancing disaster risk
reduction. There could be multiple approaches to buying
insurance, which may be nuanced as per the specificrequirement (a) Indemnity-based approach where theinsurance payments are made upon the occurrence ofan actual loss. Accuracy of loss payment may not bevery high and thus may be costly and complex for cities(b) Parametric-based approach that is more suitable for
cities, where the payments are not based on the actual
loss incurred but, on a trigger, (such as wind speed or
precipitation levels, location of a cyclone, etc.). This leads
to the disbursement of a predefined payment.
Increasing insurance penetration in cities has been achallenge, particularly in developing countries, due tomultiple factors such as the short-termism of insurance
products, the difficulty of incorporating future climatechange into catastrophe models, lack of insurance
knowledge and training for government officials, limited
data availability on existing risks and vulnerabilities, aswell as financial, legislative behavioural, and politicalbarriers. At the national level, active government
involvement through policy and regulatory support could
contribute to affordable premium rates, comprehensive
cover and scaling up of climate risk insurance.

04/
Technical assistance andcapacity requirementsT

he need of the hour is to focus on a sustainedtransition to an inclusive and green urban economy
that prioritises reduction in GHG emissions, publichealth and socio-economic growth of its citizens. While
there are dedicated global funds available to support cities
in this transition, particularly from a climate adaptation andmitigation perspective, there are major capacity constraints,
particularly in cities from emerging economies. Cities
will require a large spectrum of technical capacities for
executing the following tasks involved in accessing climate
finance:
A. Developing a legal and regulatory framework thatenables and encourages green projects. This includes
policies and regulations that promote renewable energy,
energy efficiency, waste reduction, and sustainableurban development.
B. Identifying and prioritising green projects that alignwith the city’s sustainable development goals. These
projects may include renewable energy initiatives,

20 Urban 20 2023 White Paper

energy-efficient infrastructure, waste management
systems, sustainable transportation, or green building
initiatives.
C. Developing an action plan (based on the identified
priorities) that outlines the goals, targets, and strategies(including budgets and timelines) to achieve them.
D. Identifying the funding sources including international
climate funds such as banks, security markets,
institutional investors, Global Environment Facility (GEF),
Green Climate Fund (GCF), and other multilateral andbilateral aid agencies etc.
E. Developing a detailed project proposal for eachidentified green project, clearly outlining the project’s
objectives, expected outcomes, timelines, budget, andenvironmental impact.
F. Conducting a feasibility study for each green project toassess its technical and economic viability. This includes
analysis of the project’s potential returns on investment,
cost-effectiveness, and risk assessment.

G. Preparing a comprehensive financial plan and budget
for each green project, including a breakdown of costs,
potential sources of funding, and the city’s contribution.
This includes a detailed analysis of the financial benefits
and savings that the project can generate in the longterm.
H. Identifying potential partners and stakeholders, suchas financial institutions, development agencies, private
sector organisations, and community groups.
I. Establishing a robust monitoring and reporting
mechanism to track the progress and impact of thegreen projects. This includes defining key performanceindicators, establishing data collection systems, andensuring regular reporting to relevant stakeholders andfunding agencies.
J. Ensuring that the green projects comply with
relevant environmental and social standards. This
includes conducting environmental and social impact
assessments and developing mitigation measures toaddress potential risks and concerns.
K. Demonstrating transparency and accountability infinancial management and project implementation by
maintaining accurate and up-to-date financial records
and preparing periodic progress reports.
These tasks require a wide range of skill sets ranging
from technical know-how, project development, financial
management, contract management, etc. Cities need tounderstand climate taxonomies and prepare projects
and programmes that align with such taxonomies so thatclimate finance resources can be tapped. Besides, accessing
climate finance will require various institutional tools andmodalities to be put in place at various levels. There is aneed for handholding and capacity building to help cities
develop and execute a portfolio of identified investablegreen projects.
Technical Assistance Programs can help cities inclimate-responsive project design, identification ofclimate financing options, and hands-on assistanceduring transaction. Various organisations with expertisein the climate finance domain can play a significant roleby contributing with their technical expertise, researchcapabilities, grant funding, demonstrative project funding,etc. and by supporting capacity building at various
levels. Support needs to also be provided in the area ofcomprehensive planning of cities to identify a pipeline ofprojects that can attract climate financing. By building thesecapacities, cities can be supported in successfully accessing
climate financing, implementing sustainable development
projects, and contributing to global efforts in addressing
climate change. Many of the G20 countries have a threetiered governance system, and it is critical that capacity
building initiatives cover the entire range from local bodies
to provincial or regional governments as well as national
governments. It is also observed that credit ratings do notfactor the climate risk and mitigation measures being
undertaken by the cities. These ratings are not alignedwith the climate risks and need to be reformed. Therefore,
capacity enhancement of public banks, local banks, andcommercial banks will also be required.
There are several ‘project preparation facilities’ such as
those established by Bilateral/ Multilateral Development
Banks (MDBs), C40’s City Advisor Program, World Bank
Group’s City Climate Planner Program, UN-Habitat’s City
Resilience Profiling Program, Global Covenant of Mayors
Academy etc. These can be leveraged adequately forenhancing capacities across the urban ecosystem. Thereis a need for Peer learning to strengthen their institutional
capacities. Sustained capacity building efforts on a longer
time scale and across different sectors can really bringthe much needed change in the urban financing sector.
Technical Assistance and Capacity Building can significantly
improve the ability of cities, particularly in developing
countries, to navigate the complexities of climate finance,
improve alignment of projects with national goals andinternational standards and enhance the long-term
effectiveness and sustainability of climate actions.

Accelerating Climate Finance 21

05/
Recommendations across G20
nations to access and manage
climate finance
The table below summarises the critical actions that will be required for accelerating climate finance to cities:

Barriers

Solutions/Recommendations

Key
ImpactParticipants

Feasibility

Governance
Structures

Establish robust governance structures. Aligncity-level goals with national and sub-national
climate targets, establishing clear roles andresponsibilities, and promoting coordination
among stakeholders.

Legislative
bodies atvarious level ofgovernment

High

Low

Institutional
Frameworks

Establish comprehensive institutionalframeworks. Define and detail out regulatory
frameworks to enable all stakeholders
to participate and induct accountability.
Development of a well-defined taxonomy
contextual to the urban area, which also takes
into account the scale and scope of climate
projects at the city level.

Regulatory
institutions

High

MediumFinancial
Management
Capabilities

Enhance the financial management capabilities.
Ensure transparency, accountability, and effective
use of funds by developing expertise in financial
planning, budgeting, monitoring, and reporting.

Local bodies,and other city
departments,
specifically thefinancial andeconomic units

High

MediumCreditworthiness Build creditworthiness of cities. Take necessaryof Cities
actions to bring books of accounts in order alongwith other actions required.

Local bodies

MediumHigh

Absence of
project pipeline

Local bodies,other city
departments
in collaboration
with various
project
preparatory
facilities

MediumHigh

Identify and develop a pipeline of bankableclimate projects aligned with climate action
strategies. Conduct comprehensive planning to
identify priority areas, assess climate risks andvulnerabilities, and align project proposals withinternational standards and funding criteria.

22 Urban 20 2023 White Paper

Barriers

Solutions/Recommendations

Key
ImpactParticipants

Feasibility

Datamanagement
and monitoring
systems

Prioritise the development of robust data
management and monitoring systems to
track progress, measure impact, and enhanceaccountability. This involves collecting andanalysing climate-related data, including
emissions inventories, vulnerability assessments,& impact evaluations.

Local bodies
and other city
departments,
Think Tanks,internationalorganisations
and MDBs

MediumMediumCapacities at the Invest in capacity-building programs tocity level
enhance the understanding of climate financemechanisms, project design, and financial
management.

Local bodies,internationalorganisations
and MDBs& all otherstakeholders

Medium

High

Noncollaborative
approaches

Actively engage in partnerships andcollaborations. Collaborative efforts can leverageexpertise, resources, and funding opportunities.

Local bodies,internationalorganisations
and MDBs& all otherstakeholders

MediumMediumPrivate Sector
Engagements

Actively engage with the private sector to
explore innovative financing mechanisms andpartnerships.

Government
Mediumbodies at various
levelsMedium

Accelerating Climate Finance 23

06/
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1.

Climate Finance and the USD 100 Billion Goal. (n.d.). Retrieved from https://www.oecd.org/climate-change/finance-usd-100-billion-goal/
2. Introduction to Climate Finance. (n.d.). Retrieved from United Nations Climate Change: https://unfccc.int/topics/
introduction-to-climate-finance
3. Climate Policy Initiative. (2022). Global Landscape of Climate Finance A Decade of Data: 2011-2020.
4. Creating a Green Future, One Building at a Time. (2021, July). Retrieved from International Finance Corporation:
https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/
impact-stories/green-buildings-eca
5. (2014). Urban Climate Change Resilience: A Synopsis. Manila: ADB.
6. (2019). Taking Adaptation to the Ground: A Small Grants Facility for Enabling Local Level Responses to Climate Change.
South Africa: Adaptation Fund.
7. IFC. (2021). Climate Investment Opportunities in Cities: An IFC Analysis. Washington DC: International FinanceCorporation: A World Bank.
8. UN. (2017). World Population Prospects: The 2017 Revision, Key Findings and Advance Tables (Vol. Working Paper No.
ESA/P/WP/248. ). United Nations, Department of Economic and Social Affairs Population Division (2017).
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Climate Economy.
10. OECD. (2022). Climate Finance Provided and Mobilised by Developed Countries in 2016-2020: Insights from
Disaggregated Analysis. Retrieved from OECD iLibrary: https://www.oecd-ilibrary.org/sites/286dae5d-en/1/3/1/index.
html?itemId=/content/publication/286dae5d-en&_csp_=46b868d4f630525e4ccc5f67e501847f&itemIGO=oecd&itemContentType=book#figure-d1e581
11. GCF. (2023). Green Climate Fund (GCF) . Retrieved from https://www.greenclimate.fund
12. GEF. (2023). Retrieved from Global Environment Facility : https://www.thegef.org
13. Adaptation Fund. (2023). Adaptation Fund. Retrieved from https://www.adaptation-fund.org
14. Climate Investment Funds . (2023). Climate Investment Funds. Retrieved from https://www.cif.org
15. World Bank. (n.d.). World Bank. Retrieved from https://www.worldbank.org/en/topic/urbandevelopment/brief/city-creditworthiness-initiative
16. C40 Cities. (n.d.). Good Practice Guide: Creditworthiness. C40 Cities.
17. Dickson, E. J. (2012). Urban Risk Assessments: Understanding Disaster and Climate Risk in Cities. Urban Development
Series. Washington DC:. World bank. World Bank. Retrieved World Bank. DOI: 10.1596/978-0-8213-8962-1. License: Creative Commons
18. SEBI. (2023, 02). SEBI. Retrieved 06 2023, from Circular No.: SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/023 : https://www.sebi.gov.in/legal/circulars/feb-2023/revised-disclosure-requirements-for-issuance-and-listing-of-greendebt-securities_67837.html
19. Climate Bonds. (2023). Climate Bonds Initative. Retrieved from https://www.climatebonds.net
20. Climate Policy Initiative . (2021). The State of Cities Climate Finance. Climate Policy Initiative.
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urbandevelopment/brief/city-climate-finance-gap-fund
22. C40 CFF. (n.d.). C40 Cities Finance Facility (CFF). Retrieved from https://www.c40cff.org/knowledge-library/equity-and-inclusion-in-financing-climate-action
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Scripts/NotificationUser.aspx?Id=12487&Mode=024 Urban 20 2023 White Paper

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Annexure - 1
SUMMARY OF SELECTED TAXONOMIES
Objectives

Categories

European Union Taxonomy
The EU taxonomy is activity based and not broad categories.







Climate change mitigation
Climate change adaptation
Sustainable use and protection of water and marine
resources
Transition to a circular economy, waste prevention, andrecycling
Pollution prevention and control
Protection of healthy ecosystems

Seven Mitigation categories: Agriculture, forestry, and mining
 Manufacturing
 Electricity, gas, steam, and air conditioning supply Water, sewerage, waste, and remediation
 Transportation and storage
 Information and communication technologies
 Buildings
Six Adaptation Categories: Agriculture, forestry, and mining
 Electricity, gas, steam, and air conditioning supply
 Information and communication technologies
 Financial services and insurance Professional, scientific, and technical activities
 Water, sewerage, waste, and remediation

China Taxonomy







Energy saving
Pollution prevention and control
Resource conservation and recycling
Clean transportation
Clean energy
Ecological protection and climate change adaptation

Six categories:
 Energy saving
 Pollution prevention and control
 Resource conservation and recycling Clean transportation
 Clean energy Ecological protection and climate change adaptation

Bangladesh Taxonomy








Air pollution prevention
Renewable energy and energy efficiency
Water conservation and wastewater management
Waste management
Recycling and manufacture of recycled products
Manufacture of green products
Others










Renewable energy
Energy and resource efficiency
Alternative energy
Liquid and solid waste management
Recycling and manufacturing of recyclable goods
Environment-friendly brick production
Green environment-friendly establishments
Miscellaneous

Accelerating Climate Finance 25

Indian Taxonomy
India Taxonomy is work in progress, However the Reserve Bank of India and Securities and Exchange Board of India hasframed guidelines on sovereign green bonds along with boarder frameworks to discourage green washing of projects.


Encourages energy efficiency in resource utilization.
Reduces carbon emissions and greenhouse gasses.
Promotes climate resilience and/or adaptation.
Values and improves natural ecosystems and biodiversity
especially in accordance with SDG principles.

26 Urban 20 2023 White Paper

Nine categories included under the sovereign green bondframework are Renewable Energy
 Energy Efficiency
 Clean Transportation
 Climate Change Adaptation
 Sustainable Water and Waste Management
 Pollution Prevention and Control
 Green Buildings
 Sustainable Management of Living Natural Resourcesand Land Use
 Terrestrial and Aquatic Biodiversity Conservation.
 The taxonomy further provides 25 classifications.