Eco-Cities India is a multi-year technical advisory program, established under the European Union (EU)-India Cooperation on Clean Energy and Energy Efficiency. A climate-change focused initiative, the program is structured around five cities—Bengaluru, Bhubaneswar, Chennai, and the Mumbai and Pune metropolitan regions. The program is designed to assist government and civil society in meeting efficiency targets, such as the Nationally Determined Contributions—the reductions in emissions levels and increased focus on climate-resilient development pledged under the Paris Climate Agreement
All of this is taking place in the context of a rapidly changing world. A 2018 report by the United Nations Department of Economic and Social Affairs estimated that by 2050, about 400 million Indians will have migrated to urban areas of the country. This trend is visible all over the world—other reports estimate that by the same time, there will be roughly 6 billion people living in urban areas worldwide. Cities of the future are expected to account for 90 per cent of the world’s population growth, 80 per cent of its carbon emissions, and 75 per cent of its energy consumption.
In one sense, this is good news—urbanization is often held up as an indicator of economic growth. However, this vast new urban population will also increase an already high demand for housing, transportation, clean water, energy and other resources. Unless cities of the future are developed in a planned, eco-friendly manner, these new demands will place unsustainable strains upon the already stretched urban infrastructure networks.
According to estimates, India will need at least $1 trillion in capital investment to establish the sort of sustainable development protocols and infrastructure that its growing urban population will depend on. This investment cannot possibly come from the government alone—it is crucial for private sector investment to be stimulated, and for funding to reach the areas most in need of it.
In this regard, the International Finance Corporation (IFC) is uniquely positioned to make an essential contribution. In collaboration with the European Union (EU), the IFC’s Eco-Cities India program aims to help Indian government and civil society address some of the key challenges of the near future. For instance, part of the IFC’s expected impact—through policy interventions, business incentives and certification programs, for instance—includes directing $200 million of private investment to financing climate-change related projects, as well as achieving a reduction in greenhouse gas emissions of 1 million tons per year.
Among the primary goals for the program are the to develop solutions to infrastructural problems relating to urban transportation, water and waste management, street lighting, green affordable housing, energy efficiency, and climate resilience. In that regard, the program is developing and financing replicable, scalable projects in three areas:
Eco-Cities India facilitates climate-smart infrastructure reforms in the five chosen cities under the Public-Private-Partnership (PPP) model. Aims include the promotion of clean technology and energy efficiency, water and waste management, urban mobility and transport solutions in selected cities. For instance, a public streetlighting project in Bengaluru involves the replacement of 465,000 fluorescent and metal vapor fixtures with energy efficient LED versions, and expects to raise about $70 million of private sector investment to that end.
The Market for Green Buildings:
As mentioned earlier, some 400 million Indians will migrate to urban areas within the country over the next thirty-some years. These new urban residents will require a great deal of housing, among other infrastructure. If the buildings of the future do not incorporate the environmentally-friendly best practices immediately, this new development will cost a great deal in terms of wasted energy and resources. To this end, the IFC is promoting ‘green’ construction—buildings that cost less energy and water to construct, and that consume less energy and water over their lifecycles thanks to their eco-friendly design. To this end, the IFC is currently working with key stakeholders in the Indian construction sector, including developers and financial institutions, and has also introduced a voluntary certification system—Excellence in Design for Greater Efficiencies, or EDGE.
Promoting Competitive SMEs:
The Eco-Cities India program also aims to promote small and medium enterprises in selected, energy-intensive industrial clusters in the selected cities. This goal is achieved by increasing and facilitating the financing of such enterprises’ business needs. A direct result of promoting businesses in these selected sectors is the concurrent increase in energy-efficient technology development and use, and also the development of a knowledge base of such technologies.
The European Union is a unique economic and political union formed between 28 European countries that together cover much of that continent. The EU has now evolved into an organization spanning policy areas from climate, environment and health to external relations and security, justice and migration. For over 50 years, the EU and India have worked together to alleviate poverty, prevent disasters, expand trade, and promote joint research in energy, health, agriculture and many other fields of mutual interest.
For more information, visit: http://eeas.europa.eu/delegations/india
IFC—a sister organization of the World Bank and member of the World Bank Group—is the largest global development institution focused on the private sector in emerging markets. We work with more than 2,000 businesses worldwide, using our capital, expertise, and influence to create markets and opportunities in the toughest areas of the world. In fiscal year 2018, we delivered more than $23 billion in long-term financing for developing countries, leveraging the power of the private sector to end extreme poverty and boost shared prosperity.
For more information, visit www.ifc.org