Overview

 Urban Issues for Asia’s Cities


Needed Investments
Financing Infrastructure in Asia’s Cities

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Another 1.2 billion people will live in Asia’s cities in the next 20 years These cities will on average provide 80% of the economic base — but as much of the noise and environmental impact including contamination of air and water. Large disparities have emerged as poverty has urbanized – over 200 million people live in poverty in Asia’s cities and many more are vulnerable to economic and environmental shocks. Managing cities in this context requires a new approach: > New forms of engagement > New forms of finance and > The flexibility to adapt to the circumstances of each city

City Shanghai Mumbai Jakarta Manila

Country China India Indonesia Philippines

Population '000s 2005 12,665 18,336 13,194 10,677

Economic Product $m 2004 89,980 83,528 24,592 32,277

Megacities are nation-sized in population and economic product
Relative Size of Informal Economy, 1999/2000

Bangkok Tokyo

Thailand Japan
Sweden Denmark Cambodia Bangladesh

6,604 35,327
8,855 5,300 13,107 136,600

63,088
70

740,000
255,400
Percentage of GNP

52.6

60 50

43.4

44.6

46.3

60.6 43.2

31.1

34.1

40 30

35.6

174,400 26,990 56,600

38.4

36.8

39.8

27.5

%

23.1

19.4

16.6

18.4

19.6

13.1

10 0

But they contain a large informal economy

de sh H Ch i on n gk a on g, In In di do a ne si a Ja pa K n or M ea al , ay M sia on go lia N e P pa ak l P ista hi lip n p S ine in ga s po S ri re La nk Ta a iw Th a n, ai la V n A iet d ve n r a am ge A A sia rm A en ze ia r K ba az ija ak n hs ta K n U yr g zb yz ek is ta n
Country

B

an gl a

11.3

13.1

20

15.6

26

ASIA’S POTENTIAL FOR CLIMATE IMPACT
Our resource devouring cities  Occupy 2% of land area but consume 75% of resources  In 1950, Asia Pacific was rural w/ 17.% or 232 million living in cities  UN estimates by 2030, 55% of 4.9 billion Asians will live in urban areas  Sustainable footprint is 1.8 hectares per inhabitant, Shanghai today is 7.0  In the U.S., it is 9.7 on average  If all Asian cities go the road of shanghai, the implications for the planet are dire

ADB’s Response under Strategy 2020
Main Responses under Strategy 2020 • Urban infrastructure for climate change mitigation and adaptation • Livable cities
Addressing the core urban management issues under the new Urban Operations Plan • Planning and supplying infrastructure for inclusive economic development → Competitive Cities • Pro- poor interventions in basic infrastructure and slum upgrading → Inclusive Cities • Developing and implementing environmental / climate-resilient infrastructure → Green Cities

What Cities Can Do for Sustainable Development
◊ Local land use and transportation patterns. Municipal land use and transportation planning decisions directly influence whether people and businesses will have mobility choices that allow them to save energy and money. Building construction and energy efficiency. Through zoning codes, building codes and the permitting process, municipalities can encourage building designs that save energy and resources. Local economic activity. Municipal economic development initiatives are opportunities to encourage development in low-energy, zero-carbon directions, by both incentive and example.

INVESTMENTS FOR GREEN CITIES

ELEMENTS OF GREEN CITIES
LOW CARBON TRANSPORT

ELEMENTS OF GREEN CITIES GREEN INDUSTRIAL COMPLEXES & ECO-INDUSTRIAL PARKS
Case Study - Kalunborg, Denmark Lessons Learnt: 1. Industries with the right composition exist or are relocated in one area. 2. Minimal distance between individual companies. 3. Environment for open & intimate working relations. 4. Energy efficient buildings, renewable energy sources and green open areas ensure sustainable neighborhood.

ELEMENTS OF GREEN CITIES ENERGY EFFICIENCY

Masdar HQ is designed to have a record-low energy intensity for its class in hot/humid climates, produce more energy than it consumes, produce zero solid and liquid wastes, and reduces its water needs by 70%.

ELEMENTS OF GREEN CITIES
ENERGY EFFICIENCY
Ulaanbaatar Housing – before and after

GTZ and CDIA PFS The Savings – energy, coal and CO2 – ability to close one out of three power plants The Financing – ADB/CDM, KfW and local banks

INTELLIGENT SYSTEMS FOR GREEN CITIES
Road pricing/Traffic Management Systems

E-systems for Solid Waste, Intelligent Grid

Planning Software
E-governance

City Greening

Energy Management Systems

ELEMENTS OF GREEN CITIES
INTELLIGENT SYSTEMS

E-governance Initiatives in Tirunelveli Corporation, Tamil Nadu, India
e-Governance initiatives for transparent, accessible, and user-friendly citizen services:  Street Electricity. Details of 40,000 streetlights were computerized and citizens can register complaints about their condition.  Compost Yard Online Weighing System. The weight of collected garbage is posted electronically and uploaded, along with the details of the collecting driver and vehicle.  E-Legal Seva. This intranet-based system tracks legal cases. .  E-Survey. A web-based, land-use, and reserved land and land schemes reporting system, esurvey maintains records of land use.  E-Town Plan: This web-based system tracks and processes new construction and renovation applications and post the details on the Internet.  Citihelp. Using this web-based system designed to address complaints and provide guidance on administrative matters.  E-Cash Collection Center. This is a single-window online tax and services collection center.

ELEMENTS OF GREEN CITIES
GREEN INFRASTRUCTURE: STEP-UP IN PHILIPPINES
Strategic Private Sector Partnerships for Urban Poverty Reduction in Metro Manila
STEP-UP has 3 components: •communitypartnership building, focused on coalescing three groups deemed critical to urban poverty reduction: business; local government and the homeowners associations •upgrading of community infrastructure (roads, drainage, water supply, multipurpose centers, and access to health/ sanitation); housing improvement; microenterprise support; •risk reduction and management issues relating to natural and artificial disasters.

ELEMENTS OF GREEN CITIES Green Infrastructure: Solid waste for Philippines and Pakistan
Waste resources dumped in landfill now recycled and reused.

Potential for co-generation

The Savings – energy, coal and CO2 The Financing – ADB/CDM, JICA and local banks

Critical Components of City Cluster Economic Development

Critical Components of Inclusive Urban Redevelopment

Capital Markets and Environmental Infrastructure
Asia’s capital markets are highly liquid, but short term: • • • Asia has high levels of savings, banks and other financial institutions have money, BUT investments tend to be short term With no clear regulatory structure – high transaction costs Limited mechanisms to encourage institutions holding long term funds, such as pension funds and life insurance companies, to invest in infrastructure Lack of mechanisms for public sector debt finance and for public/ private Special Purpose Vehicles Issues of inter-jurisdictional coordination make project formulation and structuring difficult

• •

Developed country pension funds and life insurance companies are highly liquid and seek long term investments, BUT they are highly risk averse and have unrealistic expectations of returns
Thus the capital markets need support to fund the required investments – ADB has several windows

ADB’s and Other Official Financing
Financing Partnership Facilities: Clean Energy → $90.6M Water → $48.11M Urban → $14.0M (Grant) $70.0M (Guarantee) Transport → $0.0 M

Other ADB Facilities:
Least Developed Countries Fund (GEF as administrator) ($189 m) Special Climate Change Fund (GEF as administrator) (adaptation priority, target $75 m; mitigation, target $15 m)

Global Environment Facility (GEF) Climate Change Focal Area ($250 m/ year)

Clean Technology Fund of the Climate Investment Funds (WB as Trustee) (target $5 b)

Strategic Priority on Adaptation (part of GEF Trust Fund) ($50 m)

Adaptation Fund (GEF as administrator in cooperation with UNFCCC Secretariat) ($100 m by 2009)

Strategic Climate Fund of the Climate Investment Funds (WB Trustee) $6.1 b Target: - Pilot Program for Climate Resilience $500 m - Forest Investment Prog. $500 m - Greening Energy Access $500 m

Urban Operational Potentials Under Strategy 2020
More flexible, relevant and rapidly processed financial products  Multi-tranche Financing Facility  new eligibility criteria (eg land)  private sector involvement  rapid response with TA, grant cofinancing Subsovereign involvement  local governments and SOEs New Mechanisms to involve grant providers  Urban Financing Partnership Facility - guarantees The Urban CoP  New operationally relevant directions in research

Targets and Commitments 2011-2012
($ million)

2011
Clean Energy 1.60

2012
1.80

Transport

4.60

4.40

Water

4.44

4.10

Urban

3.60

3.61

Urban Forum – Financing Future Cities
November 2011 Networks of best practice dissemination / innovation in finance of:

Green Cities
Competitive Cities Inclusive Cities

CONCLUSION
Donor and DMC convergence on importance of Sustainable City Development. Investment needs are large and multisectoral. Appropriate ADB financing modalities?

Partnerships needed.

Thank You