Enhancing the Role of National Development Banks in Supporting Climate-Smart Urban Infrastructure

This paper is developed under the framework initiative Leadership for Urban Climate investment (LUCI) that is hosted by the Cities Climate Finance Leadership Alliance. LUCI provides a framework to close gaps in the subnational financial architecture by addressing the key structural constraints of the entire investment value chain. One of these components relates to the capacities and mandates of National Development Banks (NDBs).

Thus, this paper focuses specifically on enhancing the role that National Development Banks play in supporting the acceleration of climate-smart urban infrastructure investment. With more than USD 5 trillion in assets and several comparative advantages relative to other financiers, NDBs are well-positioned to lead this shift. However, maximizing their potential will require strengthening the enabling environments of urban institutions, as well as making some strategic adjustments at the NDB institutional and financing levels.