Aligning Policy and Finance to Deliver Sustainable Local Development

At Building Bridges 2026, our panel on “Aligning Policy and Finance to Deliver Sustainable Local Development: Mobilizing Finance to Reach Cities,” brought to the spotlight the issue of mobilizing finance for climate-resilient sustainable urban development.

Thank you to all the speakers and participants for a rich discussion on how we can ensure that finance reaches the cities and local communities where investment is most needed. Thank you to tha Sustainable Development Solutions Network for the great collaboration.

Cities are increasingly at the center of the impacts of climate change, from extreme heat and flooding to water stress. These pressures are not only environmental challenges. Damage to infrastructure can affect productivity, livelihoods and the competitiveness of local economies.

Ntsako Maphosa (Johannesburg) emphasized that climate-conscious nature-based solutions are not always among the top priorities of cities with limited resources because these are long term investments with significant social benefits but little financial ROI.

The capacity of cities and regions to invest in resilient infrastructure and essential services is critical to sustainable development. Lucila Garcia (Santa Fe) explained the need to overcome the double structural challenge at the city level in order to be able to translate global agendas to local socio-economic development.

Many Local and Regional Governments continue to face significant barriers to accessing finance. These include limited fiscal space, constrained access to capital markets, insufficient capacity for project preparation, and financing structures that do not always reflect the realities and needs of local projects. One possible solution is public-private-partnership. However, as Panos Mantziaras (Fondation Braillard) put it, we need to make sure that the private interest does not take over the public good.

The discussion explored further what needs to change to make finance flow more effectively to the city level.

Speakers reflected on the challenges cities face in delivering essential infrastructure and services for growing populations, and on what is needed to de-risk investment in urban projects that contribute to sustainable development. They also discussed the importance of prioritizing investment in climate resilience, including flood management, nature-based solutions and integrated urban infrastructure planning.

One of the key themes was the need for stronger multilevel and multilateral cooperation to connect global sustainability agendas with implementation on the ground. This means creating stronger links between international commitments, national policy frameworks and the investment priorities of local and regional governments. Eugenie Birch (SDSN) pointed out that the localization of the SDGs requires more capacity building at the city level. She enumerated programs by the World Bank, C40 and others. She also gave good examples of successful mobility projects from Bogota and Barranquilla which were financially sound and environmentally friendly.

The conversation also highlighted the potential of innovative financing models to mobilize private investment and improve outcomes for sustainable infrastructure at the subnational level. David Albertani (Catalytic) reminded the audience that guarantees, catalytic capital and other financial tools might help to address risks smarter, but they are only part of the solution. LRGs also need the capacity, institutional frameworks and international partnerships required to prepare projects, engage with investors and access appropriate sources of finance.

Cities and regions are where many global challenges become tangible — and where many solutions must ultimately be delivered. Aligning policy and finance is therefore essential to turning global ambitions into sustainable local development. Increased multistakeholder dialogue is necessary to enable LRGs to access international financing for climate-resilient projects with real-world impact.