Improving Local Enabling Conditions for Private Sector Climate Investments in Cities

This report analyzes the barriers and success factors for attracting private sector climate investment in cities within emerging economies. It identifies challenges at the macro, city, and project levels and provides targeted recommendations for city governments, national governments, international finance institutions, and private and third-sector partners to improve legal, regulatory, and financial enabling conditions.

• Barriers to private urban climate investments are categorized into three levels: macro, city, and project. Macro-level barriers include the macroeconomic context and the institutional and policy context, which city governments have limited influence over. City-level barriers, which city governments can more directly influence, involve policy-making, planning, capacity, financial and asset management. Project-level barriers relate to project design, structuring, sector maturity, and technology readiness.
• Success factors for accessing private sector finance for climate investments in emerging economies vary by level: macro-level success depends on clear and supportive policy and regulatory frameworks; city-level success requires transparent working practices and activities to reduce risks and enhance returns; and project-level success is driven by strong stakeholder coordination, innovative implementation to lower transaction costs, and the use of pilot projects for scaling.
• The report recommends that city governments improve project preparation by streamlining planning and finance processes, prioritizing investments where the private sector provides solutions and the city procures services rather than 'hardware'.
• Recommendations for other partners include national and state/provincial governments providing policy direction and financial resources via standardized green finance and national development banks; international finance institutions focusing on programmatic interventions and risk mitigation; financial entities shifting portfolios toward climate action; infrastructure companies proposing solutions via multi-stakeholder approaches; and NGOs providing capacity development and innovation funding.

APA

Apostolovic, M., Le Cornu, E., Masale, E., Maskrey, R., Schuler, N., & Teipelke, R. (2023). Improving Local Enabling Conditions for Private Sector Climate Investments in Cities. Climate Policy Initiative. https://www.climatepolicyinitiative.org/publication/improving-local-enabling-conditions-for-private-sector-climate-investments-in-cities/

Chicago

Apostolovic, Milica, Emily Le Cornu, Eyerusalem Masale, Rebecca Maskrey, Nina Schuler, and Renard Teipelke. Improving Local Enabling Conditions for Private Sector Climate Investments in Cities. Climate Policy Initiative, 2023. https://www.climatepolicyinitiative.org/publication/improving-local-enabling-conditions-for-private-sector-climate-investments-in-cities/.

Wikipedia

{{cite report |last1=Apostolovic |first1=Milica |last2=Le Cornu |first2=Emily |last3=Masale |first3=Eyerusalem |last4=Maskrey |first4=Rebecca |last5=Schuler |first5=Nina |last6=Teipelke |first6=Renard |title=Improving Local Enabling Conditions for Private Sector Climate Investments in Cities |publisher=Climate Policy Initiative |date=2 June 2023 |url=https://www.climatepolicyinitiative.org/publication/improving-local-enabling-conditions-for-private-sector-climate-investments-in-cities/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{apostolovic2023improving, author = {Apostolovic, Milica and Le Cornu, Emily and Masale, Eyerusalem and Maskrey, Rebecca and Schuler, Nina and Teipelke, Renard}, title = {{Improving Local Enabling Conditions for Private Sector Climate Investments in Cities}}, institution = {Climate Policy Initiative}, year = {2023}, month = jun, url = {https://www.climatepolicyinitiative.org/publication/improving-local-enabling-conditions-for-private-sector-climate-investments-in-cities/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }