Financing Cities

By 2050, nearly 5 billion people will live in cities, up from 3.5 billion people in 2015. Cities will not only need massive infrastructure investment to accommodate this growth, but also to adapt their infrastructure to climate change and harness the opportunities of the digital transition. As economic, social and environmental hubs, cities face the critical challenge of securing sustainable financing to drive innovation and resilience. Strategies range from new forms of urban planning to leveraging private investment, notably in a tighter fiscal environment. Catalysing sustainable finance, such as green, social and sustainable bonds will be key to unlocking infrastructure investment. This session will explore cutting-edge solutions for financing the cities of the future. While the focus on financing is essential, the role of funding revenues should not be overlooked. Discussions will draw from two new OECD reports, Mobilising Sustainable Finance for Regions and Cities and Financing Sustainable Cities in Southeast Asia, alongside insights from the Global Commission for Urban SDG Finance, which is mandated to develop actionable recommendations for cities to secure more effective financing for SDG-aligned projects. Outcomes will feed into the preparations for the 4th International Conference on Financing for Development (FfD4) to be held in Seville, Spain (30 June to 3 July 2025).

 

By fostering peer learning, knowledge exchange and capacity building among local governments, city-to-city co operation can accelerate the implementation of the SDGs, advance solidarity and help mobilise finance for urban development. Through collaborative networks, cities can share best practices on innovative financing mechanisms, such as municipal bonds, public-private partnerships and blended finance models, helping each other overcome financial constraints. These partnerships also enhance access to international funding opportunities, including climate finance and development grants, by strengthening advocacy and demonstrating collective impact. Furthermore, twinning arrangements and peer-to-peer dialogues enable cities to co-develop solutions for common challenges such as affordable housing, resilient infrastructure and sustainable mobility, ensuring more efficient use of financial resources. Drawing on a new OECD report, Harnessing City-to-City Partnerships to Finance Urban Development, the session will showcase how cities in advanced economies work with their peers in developing countries to facilitate access to public and private investments for sustainable urban development and discuss the role of national governments and international organisations in unlocking the potential of such partnerships.

 

The global real estate market, encompassing residential and commercial properties as well as agricultural land, reached a staggering USD 379.7 trillion in 2022. Real estate remains the world’s most significant store of wealth, surpassing the combined value of global equities (USD 98.9 trillion) and debt securities (USD 129.8 trillion) and nearly four times the global GDP (USD 100.6 trillion). However, this vast concentration of capital is increasingly exposed to climate-related risks. On the one hand, the increasing frequency of heatwaves, floods and wildfires is causing physical risks to real estate assets, with devastating human, environmental and financial consequences. On the other hand, transition risks associated with evolving regulatory requirements for decarbonising buildings and enhancing resilience could potentially reduce property values. Governments and public funding alone cannot lead the transition to sustainable real estate. The private sector must play a pivotal role in addressing these challenges. In this context, it is crucial to understand how both physical and transition risks are assessed and incorporated into financial decision-making in the real estate sector. This session will bring together public and private actors to discuss how to evaluate these risks and explore how they translate into financial risks and de-risking strategies in the real estate sector.