Financial Intermediaries (FIs) are key to closing the USD 6 trillion annual urban climate mitigation finance gap. The EIB has launched a new technical assistance programme to help equip FIs with skills, tools and project pipelines to turn city climate ambitions into investable opportunities.

Urban areas pose both the challenge and the solution to climate change. People, infrastructure and assets are concentrated in cities, creating impermeable surfaces, trapping heat and airflow making them especially vulnerable to climate impacts like heatwaves and flooding. They account for around 75% of global CO₂ emissions and two-thirds of global energy use (UN Habitat, 2023), yet they are also engines of growth and innovation. Closing the urban climate finance gap is urgent: the investment needed for climate-friendly urban infrastructure is estimated at over USD 6 trillion annually until 2050 (CCFLA, 2024).

Addressing this financial gap will require the mobilisation of multiple funding sources. However, financial institutions traditionally struggle to identify adaptation-focused opportunities that yield reasonable returns on investment that align with their financial expectations.

The City Climate Finance Gap Fund, a joint initiative of Germany and Luxembourg, implemented by the World Bank and the European Investment Bank (EIB) in cooperation with GIZ, already supports municipalities in low-income countries and emerging economies prepare viable, climate-aligned urban projects. However, project preparation alone does not close the urban finance gap: delivering these projects at scale requires banks and national development institutions that can structure, assess and fund them. Financial intermediaries (FIs) are therefore a missing link between city pipelines and real investment flows, yet many still lack the expertise, tools and confidence to engage with this market.

To meet this need, the EIB has commissioned adelphi and VNG International to deliver the Capacity Development for Financial Intermediaries in Urban Climate Finance project under the Gap Fund. Open to FIs across all ODA-eligible countries, it will provide:

• Practical trainings and capacity building on municipal climate finance, adaptation and urban resilience, low carbon transport and logistics, water and sanitation, energy efficiency in buildings, renewable energy, waste management and circularity.
• Tailored one-to-one support for a number of partner FIs to integrate urban climate finance into their operations and pipelines with the creation of tailor-made tools and trainings.
• Peer learning with other participating FIs, knowledge exchanges, case studies and success stories shared across Gap Fund channels.

The aim is simple: build more investable projects and equip more banks to fund them, helping to close an estimated USD 6 trillion annual global urban climate finance gap.

By supporting climate-aligned urban projects, FIs can unlock new markets, position themselves as leaders in sustainable finance, and play a direct role in accelerating climate action in cities.