Back to stage

Unlocking the potential of African subnational development banks to finance Africa's urban transition

6 speakers

ASK TO JOIN and interact live with the speakers on Zoom!
In recent years& SDBs’ role in localizing SDGs and fast tracking Nationally Determined Contributions (NDCs) at a local level has been recognized in international agendas (e.g. New Urban Agenda& Marrakesh Partnership& Addis Ababa Action Agenda). Successful examples of SDBs in South-East Asia and Latin America show the potential of these intermediaries to fast-track development goals and improve service delivery in cities. At a time when investment needs in urban infrastructure are increasing under the pressure of urban growth& local governments often remain underfunded& especially in low and middle income countries where fiscal decentralization is less advanced. Access to finance is nonetheless a central precondition for development. The global requirement for all infrastructure was estimated by the OECD at US$50 trillion over a 15-year period& much of it attributed to projects at the local level. Moreover& it is estimated that the investment gap towards making urban infrastructure low-emissions and climate-resilient is between 9 to 27%. SDBs thus appear as a relevant stakeholder to increase the financial capacity of local governments to address these needs. Besides being financial intermediaries& SDBs also have the potential to stand as transformative instruments to pave the way for development of stronger municipal credit markets& to get local and regional governments’ creditworthiness strong enough to directly tap into domestic and international capital markets& especially for medium size cities. SDBs can also strengthen cities’ and regions’ capacities on project preparation cycle and appraisal: financial planning& engineering& management and follow-up. SDBs can mobilize domestic capital and aggregate data on existing pipeline of projects and their maturity. Being well established domestic players closely connected to country’s policy and development& they can provide early-stage support& professional engineering& and financing in local currency. In Africa SDBs are largely constrained by legal& technical and financial barriers that restrict them to play this transformative role. However& in recent years encouraging dynamics and supports showed positive signals to reinforce their roles to structure and deliver the infrastructure markets. This session will explore what it will take to unleash the full potential of these SDBs to support Africa’s urban transition.