A new report by C40 Cities is urging urban leaders to rethink how climate adaptation is financed, arguing that cities can unlock significant private investment by designing projects that meet market expectations.
Titled Building the Financial Case for Urban Adaptation: Guidance and Case Studies, the report outlines practical steps to help cities attract private capital for resilience projects at a time when public funding is under increasing strain.
It draws on global case studies to show how adaptation initiatives can move beyond being viewed solely as public expenses and instead become credible investment opportunities.
The report identifies several factors behind successful projects, including clear and predictable revenue models, well-developed project pipelines, and strong institutional frameworks.
It emphasises that early engagement with investors, alongside structured project design and risk reduction, is key to making adaptation initiatives bankable.
C40 Cities co-chair and Freetown mayor Yvonne Aki-Sawyerr warns that funding for climate adaptation is not keeping pace with escalating climate impacts.
She points to shrinking public budgets and limited grant funding as major constraints, adding that cities must explore innovative financing approaches.
In Freetown, tree-planting initiatives linked to carbon finance have already demonstrated how private investment can be mobilised for adaptation, offering a model for other cities to follow.
Claudio Castro, mayor of Renca in Chile and a member of the Global Covenant of Mayors for Climate and Energy in Latin America, highlights the growing urgency of adaptation measures.
He notes that cities like Renca are experiencing more severe heatwaves and droughts, disproportionately affecting vulnerable communities.
Through public–private partnerships, the city has implemented projects such as the Renca Hills initiative, which improves water sustainability while reducing urban heat.
He stresses that collaboration between cities, businesses, and financial institutions is essential to scaling climate action.
Andrea Fernández, managing director for climate finance at C40 Cities, describes limited access to finance as the single greatest barrier facing cities on the front lines of the climate crisis.
She says the report aims to shift perceptions by positioning adaptation as a viable investment category.
By equipping cities with tools to structure bankable projects and engage investors early, the initiative seeks to unlock private capital needed to meet global climate goals.
The report also provides a set of recommendations for cities, including aligning climate planning with financial strategies, building strong investment pipelines, and developing monetisation pathways such as tariffs, land value capture, and blended finance models.
It calls for stronger partnerships with private stakeholders and improved transparency to build investor confidence.
Several case studies illustrate how these principles are already being applied.
In Dakar, a flood-resilient Bus Rapid Transit system integrates private sector participation.
São Paulo’s Aquapolo wastewater reuse project secures long-term private investment to provide drought-resilient water supplies.
Nairobi’s water fund channels private capital into watershed restoration, while Ho Chi Minh City’s canal restoration has spurred real estate investment by reducing flood risk.
Other examples include Bilbao’s flood-resilient urban redevelopment, a coral reef insurance scheme in Quintana Roo that protects coastlines through tourism-backed financing, Kuala Lumpur’s SMART Tunnel project, and the Netherlands’ Afsluitdijk flood defence upgrade financed through a long-term public–private partnership.
C40 Cities argues that scaling such models will be critical to accelerating global adaptation efforts, particularly in urban areas most exposed to climate risks.
