Further Development of SOURCE for City Projects

Revision of core questions in SOURCE

Climate change and the unprecedented growth of cities, especially in emerging economies and developing countries, require increased investments in sustainable infrastructure projects that reduce greenhouse gas (GHG) emissions. Yet, cities face significant barriers to prepare bankable projects, secure finance and implement such projects. To address these challenges, The Financing Energy for Low-carbon Investment – Cities Advisory Facility (FELICITY[1]) and SIF teamed up to close the gap in financing the low carbon projects of the cities.

Since 2018, SIF has been collaborating with FELICITY, initially training 5 cities in Brazil and Mexico to use SOURCE for the preparation of low carbon urban infrastructure projects. As member of the Project Preparation Action Group of City Climate Finance Leadership Alliance (CCFLA), SIF is also contributing together with FELICITY to support local metropolitan and regional governments and their partners to build capacity on project preparation and access financing for their projects.

Under the umbrella of FELICITY, a team of consultants (E Co Team) conducted a review of SOURCE templates to reinforce their relevance for project proponents from municipalities. The main improvements incorporated by SIF from this review involved:

  • Thorough revision of the technical aspects of urban transports, energy efficiency and other urban infrastructure templates
  • Addition of dedicated climate change adaptation and mitigation sections in SOURCE
  • Addition of a section dedicated to energy efficiency and emissions, for relevant infrastructure sectors
  • Addition of new questions related toeconomic and financial terms
  • Development of a new templates for battery storage solutions

This enhancement is making SOURCE ready to support the ambitious targets of the Leadership for Urban Climate Investment (LUCI) to strengthen the capacity of cities in project preparation.

“The work conducted by the E Co team resulted in the strengthening of SOURCE to support municipal project developers in the preparation of their low-carbon urban infrastructure projects.” Margot Eichinger – Financing Energy for Low-carbon Investment – Cities Advisory Facility (FELICITY)

 

Climate section in the SOURCE templates

New questions were integrated in specific subthemes within the Environmental and Social Section of SOURCE,. Comments from E Co and FELICITY team were integrated into the following subsections in the SOURCE project preparation templates:

  • Stage 1:
    • Governance, strategic context: Questions related to the ambitions of the project in terms of SDGs and national climate goals/strategies, and its strategic fit.
    • Environmental and Social, Climate: Questions on objective of the project in terms of climate change mitigation and/or adaptation.
  • Stage 2:
    • Environmental and Social, Climate change mitigation
    • Environmental and Social, Climate change resilience and adaptation
    • Environmental and Social, energy efficiency: Questions related to the change of energy/energy sources identified depending on the type of infrastructure

Revision of specific technical guidance for transport and energy

The review of urban transport and energy efficiency templates led in the incorporation of the following key aspects reflected in the new version of templates include:

  • Specific restructuring of the scope of the templates based on the core characteristics of the project being prepared
  • Reinforcement of energy efficiency questions in all urban templates
  • Description of system’s capacity, demand, collection of fares and fare system
  • Revision of proposed lists of options describing project scope and identification of responsibilities
  • The new structure of stage 4 enabled to describe, for each package of the project, sub-items of works, e.g. the provision of new vehicles, and their individual characteristics (length, capacity, source of energy), which was not possible with the current structure of the SOURCE questions.

New project preparation template in SOURCE: Battery storage

SIF has integrated all technical guidance allowing the creation of “Battery Storage” template to facilitate the preparation of electricity storage projects essential for the implementation of renewable energies projects.

 

[1] The Financing Energy for Low-carbon Investment – Cities Advisory Facility (FELICITY) is a joint initiative of the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) and the European Investment Bank (EIB). It is funded by the International Climate Initiative (IKI) of the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU).