EBRD Green Cities programme secures expanded GCF financing for urban climate projects

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EBRD Green Cities GCF financing

Highlights

Green Climate Fund approved a second €87 million tranche to the EBRD Green Cities programme, doubling total GCF concessional financing to €174 million.
The expanded financing will support over 60 cities across sectors such as urban transport, energy, waste, water, and buildings in 15 eligible countries.
The first GCF tranche financed eight Green City Action Plans and ten investments, including the nature-based River Bic Rehabilitation and Flood Protection project in Chisinau, Moldova.

Financing expansion for participating cities

As reported by EBRD, citing the European Bank for Reconstruction and Development, the Green Climate Fund has approved a second €87 million financing tranche for the EBRD Green Cities programme, doubling the amount of GCF concessional financing available to €174 million.

The additional funding is set to help cities in eligible countries address climate mitigation and adaptation challenges through investment, policy support, capacity building and improved access to green finance. The programme supports more than 60 participating cities and covers sectors including urban transport, district energy, solid waste, renewable energy, smart solutions, water and wastewater, buildings, electricity distribution networks, street lighting, climate resilience and nature-based solutions.

GCF concessional financing is designed to help cities pursue more ambitious projects while addressing affordability and bankability constraints and mobilising additional public and private capital. It is available to cities, utilities and private-sector firms in Albania, Armenia, Bosnia and Herzegovina, Georgia, Jordan, Kazakhstan, the Kyrgyz Republic, Moldova, Mongolia, Morocco, North Macedonia, Serbia, Tajikistan, Tunisia and Uzbekistan.

Regional climate investment impact

The first tranche of GCF financing supported the completion of eight Green City Action Plans, which are tailored strategies for identifying and prioritising local environmental challenges, as well as ten investments. Those projects include the River Bic Rehabilitation and Flood Protection project in Chisinau, Moldova, which the EBRD describes as its first formal implementation of a nature-based solution within a project.

The second tranche is expected to broaden support for investments in participating cities as the EBRD and GCF approach 10 years of wider partnership and active project implementation. Over the past decade, the two institutions have combined GCF concessional resources with EBRD financing, technical expertise and private-sector mobilisation across multiple programmes aimed at climate mitigation and adaptation.

In our earlier article on Mario Draghi’s warning about the policy trade-offs between inflation control, debt dynamics and long-term growth, we outlined his view that keeping interest rates above growth for too long can worsen debt burdens and ultimately undermine the investment needed for resilience. We also noted his argument that central banks should prioritise inflation control while aiming for the lowest rate path consistent with price stability, alongside wider EU measures to support productivity-boosting investment.

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