650 billion euros. That’s how much it will take for the 112 cities in the European Union that aim to switch to green energy and eliminate harmful emissions by 2030. To help raise these funds, the European Union is creating a financial hub that targets private capital.
KEY FACTS
- The Climate City Capital Hub is an international financial resource to further support cities, part of the EU’s mission for climate-neutral and smart cities by 2030.
- The new hub will give these cities access to cooperation with the European Investment Bank, and help structure financing needs, including pooling projects and presenting them to lenders and investors from the public and private sectors. In addition, this hub is intended to support the process of finalizing deals.
- The facility will use guarantees from national governments to attract private finance and bring together small projects that would normally find it difficult to access finance individually. Projects may include energy investment plans, efficient buildings, district heating systems, renewable energy, sustainable mobility, urban renewal and regeneration, water and social infrastructure.
- Public and private financing can take many forms, including the creation of local investment funds or the issuance of bonds to finance specific projects. Private investors have already shown interest.
KEY STORY
After 377 cities applied to participate in the program, 100 were selected from the bloc and 12 from the associated countries, which are developing a climate plan with the support of the EU and the non-profit consulting firm Bankers Without Borders. This plan then becomes an investment plan, which is evaluated by the European Commission and independent experts before the city receives a label to confirm this fact. Among those chosen to participate in the program were Sofia and Gabrovo.
So far, 33 cities have signed their plans, including Lyon, Seville, Malmö, Lisbon and Florence, with more cities expected to be approved in October. 10 cities were announced in October 2023, and another 23 in March this year. Among them are cities in Denmark, Germany, Spain, Austria, Romania, Sweden, Greece, Belgium, Hungary, Portugal, Italy, France, Cyprus and Turkey.
The label is an important stage in the work of cities engaged in processes such as digitalization and carbon neutrality. Of the 33 investment plans presented so far, approximately €114.1 billion have been budgeted for climate action – an average of €3.6 billion per city. The Commission is currently considering another 23 candidates.
