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Financial and economic feasibility and funding

Financial and economic feasibility and funding. ARCADIS, Jeroen Klooster, 4 September 2018. CONTENTS About myself All well, but how about the money? From benefits towards funding Some examples In your situation, discussion Moving ahead.

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Financial and economic feasibility and funding

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  1. Financial and economic feasibility and funding ARCADIS, Jeroen Klooster, 4 September 2018 CONTENTS About myself • All well, but how about the money? • From benefits towards funding • Some examples • In your situation, discussion • Moving ahead

  2. Financial and economic feasibility and funding ARCADIS, Jeroen Klooster, 4 September 2018 Jeroen Klooster (1962) is a senior economist with ARCADIS, specialized in policy evaluation, financial and social cost benefit analysis and funding. Jeroen has been active for more than 30 years in different policy areas including water management, natural capital, urban restructuring, cultural heritage, and transportation. Jeroen holds a degree in spatial and environmental economics (Free University Amsterdam, 1986). Before joining ARCADIS he has held positions with amongst others the Dutch Ministry of Infrastructure and Environment, ECORYS, KPMG and CE Delft.

  3. 1. All well, but how about the money? • Challenges in your cities have been well identified • Clear vision where you are heading to • But: lack of funding often is an impediment for actual implementation • So, don’t wait with getting funds until everything else is ready

  4. 2. From benefits towards funding (a) • Who is to contribute to / pay for a project or programme? • Local department of spatial planning or water only? Or all focused on what international donors could contribute? • Try to increase the number of stakeholders: there are more than you think • Stakeholders: those who benefit from the project

  5. 2. From benefits towards funding (b) • Combined stakeholder analysis and cost benefit analysis: get a clear picture of types and size of benefits for which stakeholders • Stepwise approach: • Step 1: Identify stakeholders • Step 2: Specify and agree on the problem or policy issue with stakeholders > joint understanding • Step 3: Identify what outcome is relevant to which stakeholders / what is at stake? • Step 4: Try to put value on the stakes (monetary or not) • Step 5: Identify and assess policy options • Step 6: Assess impact of policy options on stakeholders • Step 7: Identify possibilities for contribution by stakeholders (in kind, financial)

  6. 3. Examples of stakeholders’ contribution in realization of projects • Financial and non-financial contributions: • Introduction / realignment of targeted subsidy (e.g. Green Roofs Rotterdam); • Getting the prices right (cost recovery, polluter / user pays principles); • Allocating national / local budgets; • Seeking international funding (e.g. Green Climate Fund, IFI’s) • But also: local in kind contributions (e.g. neighborhood incentives)

  7. Municipality + Water board: green roofs for urban water problems in Rotterdam

  8. UN Framework Convention on Climate Change • Significant volumes of climate finance are becoming available globally • Several UNFCCC financing mechanisms exist, of which The Green Climate Fund (GCF) is the most important. The financial resources of the GCF is equally split between adaptation and mitigation • The following financing instruments are used by the Green Climate Fund: • Concessional loans • Grants • Equity • Guarantees. • GCF adaptation impact areas: increased resilience of livelihoods, communities, infrastructure, built environment, health, food, water security, ecosystems, and ecosystem services. • GCF key criteria: adaptation impact, paradigm shift potential, sustainable development, needs of the recipient, and economic efficiency and effectiveness. • Application is often cumbersome, takes time and effort, but can be rewarding in terms of co-financing volumes

  9. Local in kind contributions: neighborhood amelioration

  10. 4. Now your situation - discussion • Would this be possible? Stakeholder contributions (financially or in kind) for better climate proof coastal cities: • Improved living conditions (housing, sanitation): inhabitants, Dpt. of Housing, Dpt. of Sanitation (local and national) • Improved natural habitats: international NGO’s (e.g. WWF), national and international tourist operators, fishery sector • Improved infrastructure : Dpt. of Transport (local and national), IFI’s (e.g. World Bank, regional development banks), Green Climate Fund • Improved investment / business conditions: local companies, Chamber of Commerce, Dpt. of Economics (local and national), IFI’s

  11. 5. Moving ahead No standard recipe, but • Timely involvement of stakeholders is essential, also with respect to their potential future contributions to the project • Contributions not only in cash, but also ‘in kind’ (e.g. local inhabitants, shopkeepers) > create co ownership • Adequate phasing of project: stepwise approach considering spatial planning and funding possibilities.

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