David Dole

Senior Capacity Building & Training

Economist

Asian Development Bank Institute (ADBI)

Financing Quality Infrastructure for Long-Term Investment Hanoi, Vietnam, 19 December 2016

“Quality Infrastructure through Integrated Approaches ” Developing Green Urban Infrastructure

The GrEEEn Cities Approach

Sonia Chand Sandhu Sr. Advisor to Vice President for

Knowledge Management and Sustainable

Development

Asian Development Bank

Presentation Outline

I. Elements of Quality Infrastructure – Govt of Japan II. GrEEEn Cities Operational Framework (GCOF)

III. GrEEEn Cities – Operational Applications IV. Quality Infrastructure and the GCOF.

Quality Infrastructure – Key Elements

Reference: “Quality Infrastructure Investment” Casebook, Govt of Japan http://www.mofa.go.jp/files/000095681.pdf

ELEMENTS

Sandhu, S. and Naik Singru, R. 2014. Enabling GrEEEn Cities: An Operational Framework. Southeast Asia Department Working Paper Series No. 9. November 2014. Asian Development Bank. Manila.

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Urban Profiling and Action Planning - Analysis and Synthesis

ENABLERS

“3E” Pillars for Integrated Planning

Natural Resource

Efficiency

Low-Carbon

Technology

Climate

Resilience

Disaster Risk

Management

Environment

Inclusiveness

Accessibility

Affordability

Resilience

Equity Economy

Competitiveness

Service Delivery Efficiency

Infrastructure, Asset

Management, Operations

and Maintenance

Financial Innovation

Public-Private-Partnership

Revenue Generation

Entrepreneurship and Job

creation

Policies

Strategies

Sector Plans

Regulations

Finance

Governance

Institutions

Civil Society

Private Sector

GREEEN CITY

ACTION

PLANS

Investment

Program

Financing

Mechanisms

Consensus Building, Visioning, and Stakeholder Ownership

URBAN

MANAGEMENT

PARTNERSHIPS

Peer-to-Peer

Learning

Decision Support

Systems

Skills Training

OUTPUTS

Convergence Platform GrEEEn Cities Operational Framework - GCOF

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

OPERATIONS IMPACT: TA’s to Investments

TA 8314 – REG: Green Cities: A Sustainable Urban Future for Southeast Asia

47274-002 VIE: Secondary Cities Development Program (Green Cities) (results based lending)

TA 8671 – VIE: Secondary Cities Development Program (Green Cities)

46443-004 VIE: 2nd GMS Corridor Towns Development Project (Sapa Green City Action Plan)

CDTA 8251-MYA: Capacity Development Support for Project Identification: Support to the Ministry of Construction, Union of Myanmar

47127-002 MYA: Mandalay Urban Services Improvement Project (Toward a Green Mandalay – Scoping Study)

TA 7626-REG: Public-Private Partnership Development in Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area and Indonesia-Malaysia-Thailand Growth Triangle (SERC TA)

S-CDTA 8781-MAL: Sustainable Urban Management (Green Cities) Support for Follow-up Activities in Melaka, Malaysia (Reimbursable TA – Joint with SERC)

TA 8518-INO: Sustainable Infrastructure Assistance Program – Green Cities - A Sustainable Urban Future in Indonesia (Subproject 4)

1. Effective mobilization of financial resources

• Optimal utilization of public financial resources as catalysts for private financial investments

• Support for building PPP-related systems and capacities through technical cooperation

• Co-financing with other donors

• Optimal utilization of public financial resources as catalysts

for private financial investments • Support for building PPP-related systems and capacities

through technical cooperation • Co-financing with other donors

The GCOF is a convergence platform for multiple issues, stakeholder needs and harnesses the power of partnerships.

Decision makers optimize resources by co-financing with other donors and leveraging. Public financial resources catalyze private investments by creating the enabling environment and confidence building mechanisms.

The Urban Management Partnership (UMP) is the vehicle for technical cooperation and capacity building.

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

2. Ensuring alignment with socioeconomic development and development strategies

• Consistency with long-term plans and master plans

• Sharing and overcoming development issues through dialogue

• Comprehensive approach • Dialogue and cooperation with

stakeholders and development partners

• Optimal utilization of public financial resources as catalysts for private

financial investments • Support for building PPP-related systems and capacities through technical

cooperation • Co-financing with other donors

GCOF puts people first; underscored by consultations, consensus building, cooperation with stakeholders and development partners for a shared vision with ownership and incentives.

Emphasizes extensive stock taking of Business as usual (BAU), for a comprehensive urban profile and assess what needs to be done differently based on successes and failures. Includes institutional analysis, master planning processes, and roles and responsibilities of agencies.

Helps to unbundle the 3 Es – Economy, Environment and Equity specific to the city, prioritize issues and design investments that bridge the 3Es and generate a series of direct and indirect benefits towards livability

Develop a time based GrEEEn City Action Plan (GCAP) to guide the transformation of a city from the status quo toward a livable city.

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

3. Application of high-quality standards

• Compliance with international standards established to mitigate environmental and social impact

• Optimal utilization of public financial resources as

catalysts for private financial investments • Support for building PPP-related systems and

capacities through technical cooperation • Co-financing with other donors

The E- Environment pillar is a conduit for maintaining standards and managing environment and social impacts.

The Environment and Social Impact Assessment processes (EIA and SIA) and economic analysis (E-Economy pillar) informs investment designs that bridge the 3Es.

The EIA and SIA is mandated by countries environment regulations, requiring compliance of infrastructure investments with national and international standards through EMPs.

MDBs - ADB, WB or IFC as financers are mandated to ensure environmental and social compliance per their respective safeguard policies - per the scale of the project.

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

4A. Economic Efficiency • Efficiency, durability, and

strong operation and maintenance capacities

• Construction management

• Reduction in environmental burdens and social costs

• Optimal utilization of public financial resources as

catalysts for private financial investments • Support for building PPP-related systems and

capacities through technical cooperation • Co-financing with other donors

GCOF prioritizes O&M as key to effective implementation of the GCAPs.

O&M capacity assessment is integral to urban profiling, as part of BAU. Established approaches of asset management are used to include natural, social, and historical attributes as part of asset inventory. O&M costs are identified for investments in the GCAPs .

The E- Environment pillar through the EIA, SIA and EMPs ensures reduction in environmental burdens and social costs by informing investments designs. Construction management is ensured through the EMPs, mandated as part of contracts for infrastructure works, to be complied with during implementation.

The costs of EIA and SIA are factored in the feasibility and design of the investment/s .

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

4B. Inclusiveness • Improvement of welfare and

economy of residents, including the poor

• Promotion of well-balanced development between rural and urban areas

• Gender considerations • Barrier free

• Optimal utilization of public financial

resources as catalysts for private financial investments

• Support for building PPP-related systems and capacities through technical cooperation

• Co-financing with other donors

The BAU analysis - Urban Profile includes a comprehensive baseline across the 3 E pillars including indicators of citizens welfare, employment, land use assessment, migration patterns etc.

The E- Environment pillar is also a conduit for strategic environment assessment. Solutions for balancing growth in rural and urban areas are identified within the regulatory and administrative jurisdictions and factored in the GCAPs .

Gender considerations are integrated as part of the stakeholder mapping and consultations, essentially based on the needs of the city. For e.g., if the needs of the city demand specific considerations in certain areas, such as for children and women, or the elderly these can be planned accordingly.

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

4C. Safety and Resilience • Resilience against natural

disasters • Ensuring safety in use and

operation as well as security in and around construction sites

• Optimal utilization of public financial

resources as catalysts for private financial investments

• Support for building PPP-related systems and capacities through technical cooperation

• Co-financing with other donors

The E-Environment pillar includes vulnerability impact assessments, including risks from natural disasters, either as integral to the EIA and SIA process or separately depending on the criticality assessed during the urban profiling

The GCOF uses Asset management as an enabling tool for resilience of urban infrastructure. Preventive approaches based on risk and condition assessments are a conduit for ensuring continued O&M, compliance with planning, design, and construction standards, and regulatory requirements for long-term asset performance and continued service delivery

Safety is part of construction management

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

4D. Sustainability • Harmony with the

environment • Maintaining high performance

and optimized operation • Continuation of management

• Optimal utilization of public financial

resources as catalysts for private financial investments

• Support for building PPP-related systems and capacities through technical cooperation

• Co-financing with other donors

Asset inventory and management plan covers (i) physical and social infrastructure, buildings that a city owns or administers; (ii) its natural environment and its surroundings that belong to the community - land, forests, rivers, lakes, and the air; and (iii) its cultural and historical heritage that also generates income and jobs.

The GCAP’s include time bound investment options, includes retrofits and new proposals. The conditions assessment survey during BAU, estimates costs for performance of existing assets and systems at all levels.

Continued management is ensured over the different stages of an assets life cycle—from its initial demand, to its disposal.

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

4E. Convenience and Amenities

• High trustworthiness of the service • High affinity with local culture and

lifestyle • Reduction of users’ burdens

through a highly integrated system • Ease of operation and maintenance

• Optimal utilization of public financial resources as

catalysts for private financial investments • Support for building PPP-related systems and

capacities through technical cooperation • Co-financing with other donors

The GCAPs are endorsed by local governments committing to the time based actions. Budgets are factored in the long term plans.

Continued and effective asset management for efficient service delivery.

GCOF emphasizes investment in consultations and consensus based visioning for strong ownership with the citizens and decision makers.

Capacity building and UMPs

Asset management

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

5. Contribution to the local society and economy

• Local job creation and giving back the

benefits to the local community

• By combining financial cooperation with technical cooperation, – development of local human resources

for infrastructure operation – adhering to the delivery deadline

and construction period – dissemination of best international

practice

• Optimal utilization of public financial resources as catalysts

for private financial investments • Support for building PPP-related systems and capacities

through technical cooperation • Co-financing with other donors

GCOFs consensus building platform sensitizes communities and decision makers; builds awareness on constraints and enablers.

GCOF assesses options for financing green infrastructure ; the municipal finance framework in cities ; private sector’s perspective on subnational lending and infrastructure financing ; evaluates potential for innovative financing and risk management tools; pre-feasibility for potential private sector participation and; opportunities for leveraging.

The UMP is a conduit for financial and technical cooperation, capacity building based on demonstrated good practice.

The GCAP delivers city specific services

© ADB 2014 TA-8314 REG Enabling GrEEEn Cities

Quality Infrastructure : GrEEEn Cities

Quality Infrastructure Unbundling the 3Es in a City

Source: S. Sandhu, R. Naik Singru et. al. 2016, GrEEEn Solutions for Livable Cities. Manila: Asian Development Bank

1 First Regional Conference on Enabling GrEEEn Cities o 13-14 May 2014, ADB HQ http://www.adb.org/news/events/enabling-greeen-cities

o VP Groff's TED style talk http://www.adb.org/news/videos/green-cities-are-imperative-asias-future

o Views of 170 delegates http://www.adb.org/news/videos/diverse-views-green-cities-initiative

GrEEEn Cities Initiative multimedia webpage http://www.adb.org/green-cities/index.html#intro

GrEEEn Cities videos http://www.adb.org/news/videos/greening-asias-cities http://www.adb.org/news/videos/making-cities-climate-change-resilient

Live online chat with GrEEEn Cities experts http://www.adb.org/news/events/live-online-chat-making-greeen-cities-reality

1 book: GrEEEn Solutions for Livable Cities 11 GrEEEn City Action Plans (GCAPs) in 5 countries 3 working papers

GrEEEn Cities: Knowledge