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Financing the Future: How Local Governments in Developing Countries are Leading Climate Action

|Comments and Research
08 July 2024

Photo by Robert Bye - UnsplashThe World Bank and the United Nations Capital Development Fund published the interesting report "Local Governments Climate Finance Instruments: Global Experiences and Prospects in Developing Countries". Cities in developing countries are at the forefront of confronting and mitigating the impacts of climate change. 

Local governments (LGs) need substantial financing to address this challenge, requiring investments in climate adaptation and mitigation. However, they often lack the fiscal resources for such investments. Despite global climate finance commitments, the funding gap remains substantial due to high investment needs. This report aims to contribute to discussions on increasing the access of LGs to climate finance and help them understand various financing instruments and sources available to meet climate investment needs.

Conceptual Framework for Categorizing Local Government Climate Finance

The report defines "LG climate finance" as any financing provided by public or private sector entities to LGs for activities or inve

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