Overview

 Urban Issues for Asia’s Cities

 Needed Investments

 Financing Infrastructure in
Asia’s Cities
 .
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
 Economic
Population Product
City Country '000s 2005 $m 2004 Megacities are nation-sized
Shanghai China 12,665 89,980 in population and economic
Mumbai India 18,336 83,528 product
Jakarta Indonesia 13,194 24,592
Manila Philippines 10,677 32,277
Relative Size of Informal Economy, 1999/2000
Bangkok Thailand 6,604 63,088
70

60.6
Tokyo Japan 35,327 740,000 60

52.6
Sweden 8,855 255,400

46.3
44.6
50

43.4

43.2
Percentage of GNP

39.8
38.4
Denmark 5,300 174,400

36.8
35.6
40

34.1
31.1
%

27.5
Cambodia 13,107 26,990 30

26
23.1

19.4

19.6
18.4
16.6

15.6
Bangladesh 136,600 56,600 20

13.1

13.1
11.3
10

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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

Planning
E-systems for
Software
Solid Waste,
Intelligent Grid E-governance

Energy
City Management
Greening 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, e-
survey 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 Special Climate Change

Fund Fund
Global Environment
(GEF as administrator) (GEF as administrator)
Facility (GEF) Climate
($189 m) (adaptation priority, target
Change Focal Area
($250 m/ year) $75 m; mitigation, target
$15 m)
Strategic Priority on
Adaptation
Strategic Climate Fund of
(part of GEF Trust Fund)
the Climate Investment
($50 m)
Clean Technology Fund Funds
of the Climate (WB Trustee) $6.1 b
Investment Funds Target:
(WB as Trustee) Adaptation Fund - Pilot Program for Climate
(target $5 b) (GEF as administrator in Resilience $500 m
cooperation with UNFCCC - Forest Investment Prog.
Secretariat) ($100 m by $500 m
2009) - 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 2012
Clean Energy 1.60 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