Consists of government-led funding designed to reduce inequalities between different states or sub-regions within a country or a single market region (e.g., the European Union) by investing or catalysing private sector investment in infrastructure and initiatives that enable sustainable, low-carbon and resilient development.
National, regional and municipal funds
Moderate - tried and tested
Enabling conditions and success factors
- There needs to be an existing framework for the disbursement of funding from national or regional governments to city or sub-national governments.
- Provides access to additional budget support.
- Can, in turn, create additional incentives to leverage private sector investments.
Challenges and risks to implementation
- There can be high competition between cities and regions for funding.
- There are fewer options for cities and regions in low and middle-income countries, particularly to access limited national budgets.