Global Forum of Subnational Development Banks, Localizing Finance for Sustainable, Just, and Resilient Urbanization

This Global Forum of Subnational Development Banks (SDBs) will demonstrate the transformative power and role of SDBs in financing a just transition and sustainable development toward climate-neutral and resilient cities and regions.
SDBs are public development banks mandated to finance local and regional governments and place-based entities such as SMEs.
We are facing a subnational financial market systemic failure with an insufficient connection between the supply and the demand sides. Despite many credit lines, instruments and facilities set up for sustainable urban development, local and regional governments and stakeholders still hardly have access to the required financing. This concerns both project preparation and necessary investments, in line with global agendas.
This systemic failure is mainly due to inadequate institutional frameworks, a lack of expert
human resources and financial engineering capacities. Local and regional climate projects
are most often considered to be either too small, or “not bankable” enough – they also suffer from a lack of specific guarantee schemes for subnational levels of climate action. These impediments directly impact local and regional governments’ creditworthiness and act as a significant obstacle to subnational climate action.

As domestic financial intermediaries and last-mile banks, SDBs play a unique role, as the New Urban Agenda acknowledges, in bridging the systemic failure of subnational financial architecture and markets and the urban infrastructure investment gap for a just, sustainable, and resilient development.

By complementing intergovernmental transfers to local governments and fiscal equalization, SDBs can provide a large panel of financial and non-financial instruments to unlock and broaden the sources of funding at local level, of which: guarantees, credit enhancement, debt, equity, concessional or market rates. SDBs can also provide non-financial services such as technical assistance for project preparation.

As “last-mile banks and experts”, SDBs can expand sources of domestic or international public and private funding and financing and channel them to the local level – including for intermediary cities.

This Global Forum of SDBs will showcase the 2 regional Alliances' (set in Latin America and the Caribbean, and in Africa) inspiring experiences, and their cooperation with Development Finance Institutions and Local and Regional Governments to align financial flows to “localize” & enhance global agendas' implementation.

The Alliance of SDBs of Latin America, the Caribbean, and Africa and the Coalition on Resilient Cities and Regions are co-organizers. Together, they gather more than 100 members (public development banks, City networks, UN agencies, think tanks) and their Secretariat is FMDV.

The 2 regional Alliances of SDBs and the RCR Coalition are part of the Finance In Common movement, gathering Public Development Banks worldwide to coordinate and deliver the global agendas.