RIYADH — The Urban 20 (U20), a G20 Engagement Group, Friday announced that it is working to create a Global Urban Resilience Fund, the first fund of its type developed by cities, for cities.

Speaking about the announcement U20 Chair, Fahd Al-Rasheed,President of the Royal Commission for Riyadh City, noted: “We have the opportunity right now to learn from the impact of COVID-19, to study how to build cities which are more resilient and agile.

“The cities of the U20 have taken the lead to develop a fund for city action to combat the pandemic and mitigate future urban shocks. The goal of the fund is to accelerate the transmission of new learning and ideas for a more secure future for all urban residents.”

The Fund comes as a response to the findings of the U20 Special Working Group (SWG) on COVID-19, which was set up by the U20 Chair city, Riyadh, together with co-chair cities Rome and Buenos Aires.

Mayor of Rome Virginia Raggi commented, “The challenge of our times is the fight against the pandemic. A struggle that is not only a challenge to restore the best health conditions; but more, it is remedying the economic consequences of the pandemic.

“Cities cannot tackle this alone: solid support from states is needed, but, at the same time, it is necessary to pool resources and create new tools. The Global Urban Resilient Fund represents an intelligent way to meet these needs, and the commitment of the next Italian U20 Presidency will be to carry this forward and make it concrete.”

Horacio Rodríguez Larreta, mayor of Buenos Aires, the founding city of the U20, said, “Local government budgets will not be enough to carry out the sustainable urban reconstruction and job creation that will need to take place in the coming years.

“We need to use our collective voice to facilitate cities’ access to stimulus and recovery packages and to support innovative financial instruments that favor “green” financing, such as the Global Urban Resilient Fund"

The Special Working Group brought together a further ten member cities; Amsterdam, Helsinki, Houston, Izmir, Los Angeles, Madrid, Mexico City, Rio De Janeiro, Sao Paulo and Tshwane, along with seven Knowledge Partners; University of Pennsylvania, Coalition for Urban Transition, the Chicago Council on Global Affairs, OECD, International Finance Corporation (World Bank Group), Agence Française de Développement and Université Gustave Eiffel.

The need for a cities fund arose from the Special Working Group on COVID-19, which gathered 32 case studies and surveyed 21 cities covering a population size of over 75 million.

In its report, the Special Working Group recommended the creation of a Global Urban Resilience Fund to address the dual challenge that the pandemic crisis hit all cities, but cities are not financially empowered to respond or build resilient city infrastructure of the magnitude required.

The goals of the Global Urban Resilience Fund are to:

• Act as a shared and accessible Fund for cities, governed by cities

• Provide agile disaster response funds for cities for effective, transparent and rapid emergency actions

• Provide access to critical infrastructure investments that increase the resilience of cities

• Provide financial products and instruments including grants and loans to cities while providing new opportunities for investors

The ultimate aim is to unlock and develop new financial instruments and funding mechanisms for cities currently unavailable through international finance architecture. Resources will be disbursed to cities through multiple financial products, such as;

• Grants for providing technical assistance for the early stages of the project cycle, including conception, feasibility studies and project preparation.

• Low interest loans for the later stages of the project cycle, including construction and implementation.

• Partial or full guarantees for cities with a relatively low credit standing, or with the need of a national government guarantee.

• Securitization, through the issuance of securities backed by earmarked earnings coming from specific urban infrastructure projects within individual trust funds, offering attractive yields to international financial market investors.

• Services like Resilience Insurance for cities by partnering with leading international insurance companies to create specific insurance coverage for unprecedented future shocks.

The U20 is currently working to define the details and modalities of the Fund which will be announced by the end of the year. — SG