IDFC Facility – NUCA Programme
The development and financing of joint initiatives as well as access to multi- or bilateral international funding is one of the priorities of this Facility. The National Development Banks’ Climate Action Programme in the Urban Sector (better known by its acronym NUCAP – NDBs Urban Climate Action Programme) is part of IDFC Climate Facility’s priority.
Context and concept
The overall objective of the program is to support the development of low-carbon and climate-resilient urban infrastructure. It will contribute specifically by supporting public development banks that are IDFC members, municipalities in their intervention countries, private project sponsors, and the corresponding national authorities to facilitate the emergence and financing of urban projects with climate co-benefits.
The programme aims at significantly improving the capacity readiness of NDBs and thus increasing their funding volumes for low carbon and climate resilient climate urban financing by addressing the following shortcomings:
- building capacity within NDBs and cities,
- developing a focused urban climate finance programme in each participating NDB,
- developing strategic urban climate financing pipelines,
- shaping financing instruments for these urban climate projects,
- working with regulators on improving framework conditions for urban climate finance by NDBs,
- mobilizing the private sector and,
- disseminating the experiences gained.
Five banks (BNDES, CAF, DBSA, PT SMI, and TDB.) have expressed interest in implementing this program in five countries (South Africa, Brazil, Colombia (CAF), Indonesia, and Mozambique (TDB)).
The financing of this program was approved at the identification stage by the International Climate Initiative (IKI), a program of the German government aimed at supporting thematic and sectoral initiatives around climate change.
IKI is one of the main instruments of the German federal government for international financing of climate change mitigation and adaptation. To date, IKI has approved financing for more than 750 climate and biodiversity projects in more than 60 developing and emerging countries, with a total financing volume of 4.5 billion euros for the period 2008-2020.
On 10th March 2021, the CUCF, through Agence Française de Développement (AFD), submitted to IKI funding an initiative, named the NDBs Urban Climate Action Program (NUCAP), aiming at enhancing the strategic role of national development banks as drivers of low-carbon climate-resilient urban infrastructure.
The CUCF, together with the 5 IDFC members participating banks (DBSA, PTSMI, BNDES, CAF and TDB) identified by the CUCF through a call for expressions of interest and C40 as technical partner constitute the project Consortium. Besides the core implementing partners, CCFLA functions as knowledge partner to the project.
The project outline and concept note have been approved for a grant of 20 million euros by BMU on 29th September 2021, followed by an invitation from the IKI Secretariat to submit a detailed project proposal which will then be subject to further assessment by German Government. The detailed project proposal, which has to be presented to BMU mid-2023, requires to carry out preparatory and development activities, involving major project participants and stakeholders.
The IDFC Climate Facility Coordination Unit is now carrying out the preparation phase of the NUCA programme according the following schedule:
Country missions have been initiated starting with Indonesia at the end of January 2023.
The schedules for the remaining countries missions are the following:
- Brazil and Colombia : from 6 to 17 March 2023
- South Africa and Mozambique: from 24 April to 5 May 2023