The urban fabric of Athens is made up of dense construction, including materials such as asphalt and concrete, that cover 80% of the city’s surface, retaining the heat and causing more extensive flash flooding. Urban heat island effect means that the city centre can be more than 10°C warmer than the suburbs, contributing to more intense and extended heatwaves. [1] In 2018, the European Investment Bank signed a EUR 55 million/USD 58 million loan to support Athens’ 2030 Resilience Strategy via a Natural Capital Finance Facility. The Facility focuses on climate change adaptation including EUR 5 million/USD 5.3M in financing towards climate adaptation projects to revitalize an urban forest, stabilize water management, green corridors and squares to lower temperatures, and improve air quality in the face of rising average temperatures. [2] The municipality has put forward four projects as the first ones to be financed under the Natural Capital Finance Facility portion of the loan, as soon as the assessment and design phase by the consulting firm has been carried out: 1) The revival of Lycabettus hill, an urban forest that has been a notable part of the Athens landscape for centuries, where soil and biodiversity will be stabilised through water management and erosion control; 2) The creation of green corridors between Lycabettus and Strefi hills; 3) Greening and pedestrianizing Plato’s Academy area; and 4) Extensive greening and opening up of surfaces near Lambrini Square, connecting different parts of the city, while lowering temperatures and improving air quality in these densely built neighbourhoods.


Athens, Greece


Western Europe


Competitive finance or concessional loan

Instrument category

International climate finance

Secondary instruments

Private equity

Project size (range)

USD 5-20M

Project size (details)

The Natural Capital Finance Facility element is a EUR 5M/USD 5.3M loan from the European Investment Bank


European Investment Bank (EIB)

Year of financial closure



Municipality of Athens

Primary financer

European Investment Bank (EIB) - Up to 75% of each project value

Other co-financers

Government or private sector investment to cover the remaining costs of each project.

Other contributors

URBIS; 100 Resilient Cities Network

Other transaction participants


Barriers addressed

Access to finance for adaptation projects: The EIB is playing an important role in catalysing investment in vital climate adaptation projects in Athens, which are otherwise difficult to finance due to low returns on investment. Cheaper loans and longer repayment terms makes this more feasible for the city government.

Leveraging private sector investment: The EIB loan can only cover up to 75% of the costs, encouraging either in-kind contributions from the city government, or investment from the private sector. Private investors are likely to be much more confident to invest alongside the EIB and based on the foundations of robust technical assistance.

Access to technical expertise: The EIB support also covers technical assistance, via a grant, which enables the projects to be based on appropriate planning, design and financing.

Financing structure

The Natural Capital Finance Facility (NCFF), within an EIB-funded Urban Framework Loan, is a financial instrument that offers loans and technical support to projects that are expected to positively impact biodiversity and adaptation to the impacts of climate change. URBIS provides Technical Assistance. Criteria for NCFF support include: 1. Projects must be exclusively located in the EU-28; 2. For the pilot phase, target operations will typically have a size of EUR 2-15M/USD 2.1-15.8M, but a larger amount could be considered; 3. The terms of the debt and equity instruments will typically be up to 10 years plus potential extensions; 4. The NCFF will finance up to 75% of total project costs for direct debt financing, but its commitment to a single operation cannot exceed EU 15M/USD 15.8M. In the case of equity, the maximum participation of the NCFF in funds is 33%. Grant-based technical assistance of up to EUR 1M/USD 1.1M per project to ensure the project becomes a success. This covers elements such as technical or financial feasibility studies, technical design and financial structuring. This financing structure works around long tenures and allows for up to 3 year grace period on capital repayments.

Suitability for cities in low-and-middle income countries (detail)

Yes. This donor-driven approach is likely to work in many contexts, particularly where there is strong municipal coordination on relevant project design and the ability to co-finance projects via private sector financing.


Gkinokai, M. (2019) Athens bets on green infrastructure and biodiversity. European Investment Bank.


[1] City of Athens. (2017) Athens resilience strategy for 2030. Redefining the city.

[2] OECD. (2020) Climate change mitigation and adaptation. OECD Envrionmental Performance Reviews: Greece 2020.


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