Handbook on Urban Infrastructure Finance

This handbook is featured with permission from the New Cities Foundation.

This report is the culmination of the Financing Urban Infrastructure Initiative launched by the New Cities Foundation (NCF) in early 2015. The primary aim of the Initiative is to address critical infrastructure financing (and funding) issues and challenges facing cities today as they undergo rapid urbanization. Through this handbook, the NCF provides a set of practical guidelines that can help cities become smarter in the urban infrastructure finance space and respond more effectively to the basic infrastructure service needs of their citizens and businesses.

Cities need to provide basic infrastructure services—clean water, power and electricity, roads, public transit, sewage systems, telecommunications, schools, hospitals, etc. —to support the rapid growth and the basic livelihood of their citizens and businesses. Infrastructure is capital-intensive and expensive to build and, once built, lasts a long time.

With rapid urbanization, we are currently facing a global infrastructure financing crisis. On the demand side, various estimates indicate we need between $57 to $67 trillion in infrastructure spending worldwide—almost 5 percent of gross world product every year from now until 2030. On the supply side, the irony is that there is plenty of money, especially in the private sector: there is currently an oversupply of private capital. In particular, there is also an unprecedented appetite for infrastructure assets from the private investment community.

This handbook provides an overview of various urban infrastructure financing instruments available to cities today, as well as effective ways of addressing the issues related to sustainable funding sources. It also discusses new and innovative financing models that are emerging and critical roles each stakeholder has to play in dealing with the global infrastructure financing crisis.