Germany, Luxembourg inject EUR 50 Million into City Climate Finance Gap Fund

New York, September 20 : In a move to advance low-carbon and climate-resilient urban development, the governments of Germany and Luxembourg have jointly announced a substantial injection of EUR 50 million into the City Climate Finance Gap Fund (Gap Fund).
This multi-donor fund, operated by the World Bank and the European Investment Bank (EIB) in partnership with other organizations, is at the forefront of supporting cities' efforts to combat climate change.
The World Bank posted on X, “Nature-Based Solutions in Fiji, Green Urban Mobility in Colombia #GapFund is championing innovative climate solutions for cities globally. Check out our latest projects with @EIB and partners The World Bank City Climate Finance Gap Fund”.

According to a press release by The World Bank, the contribution from Germany and Luxembourg will nearly double the Gap Fund's capitalization, elevating it to a formidable EUR 105 million. The Gap Fund now stands as one of the largest early-stage technical assistance funds designed to empower cities in their climate initiatives.
The Federal Government of Germany praised the Gap Fund's successful three-year operation and its crucial role in providing technical assistance during the early phases of climate action planning and project preparation.
The Gap Fund's unique approach has unlocked urban investments necessary to meet global climate targets.
Luxembourg's Minister for the Environment, Climate, and Sustainable Development, Joëlle Welfring, highlighted the growing interest from local actors and authorities in the Gap Fund's support. This underscores the Fund's status as a pivotal partner in local climate action.
“Three years later, the growing interest of local actors and authorities for the Gap Fund’s support proves that we are moving in the right direction. We have now reached over our EUR 100 million target, which is further proof of our commitment and joint efforts,” said Welfring.
The Gap Fund, a multi donor initiative jointly funded by the governments of Germany and Luxembourg, is implemented in collaboration with the World Bank, the European Investment Bank (EIB), and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.
Its primary mission is to provide essential funding for early-stage technical assistance and capacity building for cities in low and middle-income countries.
This support enables cities to materialize their climate action plans, develop robust project concepts and access climate finance resources.
Since its establishment in 2020, the Gap Fund has reached out to 183 cities in 67 countries, helping them navigate the complex landscape of climate initiatives.
Axel van Trotsenburg, World Bank Senior Managing Director for Development Policy and Partnerships, emphasized the role of cities in enhancing climate resilience while fostering economic growth and job creation.
He highlighted that the Gap Fund translates cities' climate aspirations into tangible investments, ultimately improving the lives of millions.
“Action is needed now to end poverty on a livable planet.  Cities are key to boosting climate resilience while delivering steady economic growth and job creation. The Gap Fund will translate cities’ climate ambitions into real investments, giving millions of people a chance to improve their lives,” said van Trotsenburg.
Currently, the Gap Fund is actively assisting cities like Mombasa (Kenya) and Porto Alegre (Brazil) in developing climate action plans.
In Pristina (Kosovo), it has supported the assessment of the city's spatial development plan, aligning it with climate targets.
To address climate risks, the Gap Fund is aiding the implementation of stormwater management in Mbombela (South Africa) and prioritizing nature-based climate resilience investments in Kinshasa (Democratic Republic of the Congo).
The Gap Fund is also championing climate mitigation projects, including climate-smart waste management strategies in Indian cities like Mangalore and Kolar, energy-efficient measures for buildings in Palembang (Indonesia), and sustainable mobility initiatives in Buenos Aires (Argentina) and Bogota (Colombia).
The Gap Fund enjoys robust partnerships with city networks and global initiatives, including the Global Covenant of Mayors for Climate and Energy (GCOM), the City Climate Finance Leadership Alliance (CCFLA), C40 Cities, and ICLEI – Local Government for Sustainability.
The substantial financial boost to the Gap Fund marks a stride toward advancing climate action globally. It empowers cities to move forward with ambitious projects, reinforcing the collective effort to combat climate change.
Michael R. Bloomberg, UN Secretary-General's Special Envoy on Climate Ambition and Solutions, Global Covenant of Mayors for Climate and Energy Co-Chair, and Founder of Bloomberg Philanthropies and Bloomberg LP, hailed the impact of the Gap Fund.
He emphasized that it helps cities take concrete steps against climate change, ensuring a more sustainable future.
This new infusion of capital to the Gap Fund will help cities move forward with their ambitious projects and help us move faster in the fight against climate change.” said Bloomberg.
The Gap Fund's partners collaborate closely, sharing knowledge and empowering cities to address climate challenges efficiently, with a strong focus on sustainability and resilience.
Cities hold the key to a climate-smart future, with over half of the global population residing in urban areas. They generate 80% of the world's economic output and are responsible for 70% of global CO2 emissions.
While urbanization drives growth, unplanned and rapid urbanization poses risks to the environment and climate.
Many cities and local governments are taking proactive measures to become low-carbon and climate-resilient.
However, they often face hurdles in securing financing and navigating the complexities of planning and project preparation, particularly in the early stages of projects.
The Gap Fund is dedicated to assisting cities in overcoming these challenges, enabling them to lead the way toward a sustainable and climate-resilient future.