Matchmaker links private investors with suitable urban sustainability initiatives, as part of EIT Climate-KIC’s Low Carbon City Lab (LoCaL) Flagship Programme.
The problem
The Global Commission on the Economy and Climate estimate that by 2030, €102 trillion of investment in low-carbon infrastructure is needed in order to achieve global growth expectations. Public sector funds can meet around one-fifth of this, but the rest must come from private sources.
Investors are increasingly looking for bankable climate change mitigation projects. With cities accounting for 75 per cent of global greenhouse gas emissions, urban schemes can make the biggest difference and produce a healthy return on investment. However, matching investors with projects has proved difficult. The main challenge is in preparing projects to a high-enough standard to capture investors’ interest.
The solution
Matchmaker, a project led by CDP (previously the Carbon Disclosure Project), part of EIT Climate-KIC’s Low Carbon City Lab (LoCaL) Flagship Programme, is developing a service to connect urban sustainability initiatives with investors.
At Matchmaker’s core will be a marketplace where investors can browse a library of suitable projects. In addition, consultations and workshops will showcase urban projects and help cities learn how to attract finance.
The idea was born out of CDP research examining barriers to private sector investment in urban climate-mitigation projects. “The main conclusion was that the finance is out there but cities are often unaware how they can attract it,” explains CDP analyst Florianne de Boer. “And investors don’t know these opportunities are out there. We want to use our network to connect cities and investors.”
The impact
Matchmaker’s first workshop, held in May 2016, identified a need to standardise how cities report and present their projects. The team developed a template for use at the second workshop, which was held two months later.
For Matchmaker’s third event, the team produced a booklet for investors that detailed six projects. These included retrofitting thermally inefficient buildings in the Mongolian capital of Ulaanbaatar, and a monorail and tram scheme in the Indonesian city of Balikpapan. “We saw that investors are really interested in helping develop these projects and in asking one-to-one questions, so we also had speed-dating sessions that city representatives found very useful,” says de Boer.
Matchmaker aims to have 100 projects in its marketplace by 2022.
EIT Climate-KIC’s role
EIT Climate-KIC funded CDP’s initial research and brought the programme’s partners together. These include ICLEI – Local Governments for Sustainability – whose role is to engage cities and source suitable projects. Consultancy South Pole Group is working on the criteria for guaranteeing the financial feasibility of projects, while standards and certification body Gold Standard is doing the same for their sustainable credentials.
“Climate-KIC works as a magnet to link us up with all these different initiatives out there,” says de Boer. This has resulted in cross-pollination between Matchmaker and other LoCaL projects. “There is a lot of cross-learning between the projects, so we are not reinventing the wheel but building on what the others are doing.”