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Financing the Transition to Sustainable Cities: Introducing TheCityFix Labs India

Cities are changing at an unprecedented rate: 75 percent of the infrastructure expected to be in place by 2050 has yet to be built. Meanwhile, major adjustments are needed to reach global climate and development goals. Now is the chance to invest for the long term and seize the estimated $26 trillion opportunity in low-carbon growth.

The sheer volume of the demand and opportunity for more sustainable infrastructure in India is unmatched. By 2020, the real estate sector in the country is expected to account for 11 percent of GDP, floor space is expected to double by 2030 and close to 35 billion square meters of built space are expected to be added by mid century. A large portion of new developments are disconnected from water, energy, sewage and other basic infrastructure, leading to negative impacts on long-term environmental sustainability, public health and quality of life.

Why aren’t more cities investing in sustainable, connected growth?

To find answers and overcome these gaps, we are presenting TheCityFix Labs, a new component of the Financing Sustainable Cities Initiative (FSCI), a partnership between WRI Ross Center for Sustainable Cities, C40 Cities Climate Leadership Group, and the Citi Foundation. The partnership brings together city leaders and investors to show that they aren’t alone in solving urban development problems – there are proven, successful examples the world over that they can lean on and build off.

TheCityFix Labs will support the market transition to sustainable investments by combining knowledge-sharing, capacity-building and direct technical assistance to help cities better define and initiate fundable projects.

Harnessing the Private Sector

TheCityFix Labs is an approach that stems directly from WRI Ross Center’s recent success in helping Bhopal launch India’s first ever bike-sharing service. Over several years of working with the city, we discovered the unique potential that the FSCI presents in helping projects move from city officials’ aspirations to workable business models that involve private sector contracting.

The Indian government is proposing legislative reforms, including a “housing challenge,” to accelerate sustainability in cities, and private enterprises and start-up companies are proposing new digital solutions to support their objective. Examples of successful entrepreneurial interventions already exist in traditionally public sector fields such as water, energy and waste. Yet, pilots in India are scarce.

Connecting Growth in Hyderabad

Our first-ever TheCityFix Lab will take place in the city of Hyderabad. Hyderabad Metro currently extends about 30 kilometers and will reach 72 kilometers at full-build with an anticipated ridership of 1.5 million. The Lab will bring together a range of stakeholders committed to bringing more affordable, greener core services to new developments along this metro corridor. Ensuring sustainable and economically sound transit-oriented investment is a priority for the concerned authorities.

The Lab will identify early-stage project solutions from entrepreneurs across India providing solutions to improve building efficiency, waste and water management. The projects will highlight how sustainable solutions that can be mainstreamed around metro stations to reduce emissions, increase resource efficiency and minimize operating costs for utilities. The Lab aspires to drive this transformation by:

  1. Enabling the use of new technologies by working with a cohort of entrepreneurs to develop solutions that appeal to state government programs but have business models that can access private finance. WRI India has had success running similar accelerators to improve public buses and first- and last-mile connectivity.
  2. Convening policymakers, utility companies and real estate developers, with the aim of sharing international best practices, business model innovations, and technical training, to facilitate market transformation and accelerate the adoption of these solutions.
  3. Creating opportunities for new technologies and partnerships identified through this process to overcome any hurdles in the public process.

During our open application period – October 8 to November 2, 2018 – TheCityFix Labs team will host several workshops across the country to encourage submissions and explore potential solutions. From this pool of applicants, we will work with a jury of experts to select a cohort of projects that can benefit from additional support. This cohort will work with WRI experts through a series of workshops and training sessions to develop their business plans and tailor them to appeal to both investors and government officials. Project teams will learn to use the FSCI platform’s business model framework approach, for example, breaking down complex investments into easier to understand technical components, legal arrangements, funding sources and financial mechanisms. Finally, the Lab will close with a public event where the cohort will present their projects to city officials for consideration.

Through the hands-on workshops and training sessions of TheCityFix Lab, we hope to help Hyderabad – and ultimately many more cities – scale-up solutions that will create more sustainable cities. In many ways, we see TheCityFix Labs as an extension of the work WRI Ross Center has been doing for years to change cities from the inside out. The overarching goal is to establish a platform for investors, the government and civil society to coordinate with one another, creating a long-lasting framework that will allow more cities to seize the opportunities of low-carbon growth.

Interested in taking part in TheCityFix Lab in India? Find out more at wricitieshub.org/thecityfix_labs_india.

The Financing Sustainable Cities Initiative, funded by the Citi Foundation, is a partnership between WRI Ross Center for Sustainable Cities and C40 Cities Climate Leadership Group that helps cities accelerate and scale-up investments in sustainable urban solutions through the development of innovative business models.

Christopher Moon-Miklaucic is a Research Assistant with Urban Innovation and Finance at WRI Ross Center for Sustainable Cities.

Kate Owens is the Urban Development Manager in Washington, DC, for WRI Ross Center for Sustainable Cities.

Jaya Dhindaw is the Strategy Head of Integrated Urban Practice at WRI India.