IDFC Climate Facility IKI NUCAP: Closing of the country consultations and upcoming meeting in Berlin

23 May 2023

In May 2023, the series of country consultations as part of the IKI NUCA programme preparation phase came to an end. The week-long stays in the remaining four focus countries of the programme (Brazil, Colombia, South Africa and Mozambique) included bilateral talks, group discussions and focus groups, with the goal of identifying key gaps and bottlenecks for urban climate finance.

First NUCA Programme country mission in Indonesia
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The IKI NUCA programme was approved at the identification stage by the International Climate Initiative (IKI), a programme of the German government aimed at supporting thematic and sectoral initiatives around climate change. 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. 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 country mission in Brazil focused on the urban sectors of transport, water and sanitation. The project team including BNDES was able to engage with numerous international stakeholders (AFD, KfW, World Bank, JICA, CAF), and national stakeholders like the Ministry of Environment, Ministry of Regional Development, and Ministry of Economy and Finance. Meetings with the governments of Rio de Janeiro and Petropolis showed the need of urban climate finance to cater for mitigation and adaptation activities. Stepping up climate efforts and building on existing mainstreaming potential for climate action and expanding the pipeline of climate-ready projects were found to be key aspects to explore for the NUCA Programme.

In Colombia, the NUCA project team including CAF was able to engage with international stakeholders (AFD, KfW, EIB, IADB), C40 and UCLG LatAm, other financial actors (FINDETER, FDN and Bancoldex) and government entities (Ministry of Hacienda and Credito Publico, National Planning Department, Ministry of Finance). Municipal entities were met with a focus on the Caribbean Administrative and Planning Region of Colombia (RAP Caribe). Fostering peer exchange between active financial actors in the country as well as providing the last push for low-carbon and climate-resilient infrastructure projects have been identified as key aspects in Colombia to pursue in the NUCA programme.

The country consultations with DBSA in South Africa aimed at aligning the NUCA programme with the focus on the urban sector with the important ongoing JET-P initiative in the country. As JET-P, the Just Energy Transition Partnership, focuses on the transition in the energy sector, the NUCA project team met with several relevant stakeholders in this realm (international: AFD, KfW, World Bank, JICA, German embassy; national: municipalities of Lekwa, Dipaleseng, Nkomazi, Emalalheni and Steve Tshwete). Joining efforts and supporting the municipalities along this initiative will be a key success factor for the NUCA programme in South Africa.

In Mozambique, the focus of the NUCA country consultations laid in the greater area of Maputo. The project team including TDB met with international DFIs (AFD, KfW, JICA, EU Delegation), local stakeholders of the municipality of Greater Maputo, the national development bank BNI, local water and transport authorities (AMT and FIPAG) and more. The project team explored existing initiatives within infrastructure financing of the transport, water and waste sector. The ongoing decentralisation process and its influence on municipalities in Mozambique as well as coordination of DFI efforts with government priorities will be key aspects of the NUCA programme going forward.

The project team would like to express its gratitude to all partner banks and involved stakeholders for organizing the mission and for their hospitality.

IDFC Climate Facility: objectives, activities and value added
The IDFC created a Climate Facility as an operational and innovative tool to strengthen knowledge and leverage resources in the field of climate change mitigation and adaptation.
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Next step: Consortium meets in Berlin in June

After the successful finalisation of all country consultations, the NUCA partner banks will come together in Berlin on June 6 and 7 2023 with the knowledge partners of the project (C40 and the City Climate Finance Leadership Alliance (CCFLA)) and the sponsor (IKI) to discuss the final set-up of the programme.

The two-day workshop will bring together involved colleagues from all institutions, to reflect on the findings from the country visits and exchange about challenges and bottlenecks in other countries. The IDFC peers will identify common solutions that the NUCA Programme can provide in its implementation phase, addressing country-specific and overarching gaps within climate action of the urban sector. After the consortium meeting and the consolidation process, the final implementation proposal will be provided to IKI. The NUCA programme is foreseen to start moving into the implementation phase towards the end of 2023.