Balance sheets build climate-resilient cities

Public budgets are unlikely to expand at the pace required to meet the escalating risks. A larger share of long-term capital will therefore need to come from private sources

- Rajeev Gopal

Future-proof: A bridge damaged by floods. Cities that strengthen their financials and embed resilience in investment decisions will be better positioned to mobilise long-term capital.

(Delwyn Verasamy)

cross the world — and increasingly in South Africa — cities sit at the front line of climate risk. Building climate resilience requires awareness, planning, institutional capacity, policy alignment and resources.

In South Africa, where municipalities carry significant responsibility for infrastructure delivery, the question is no longer whether cities need climate plans but whether they can implement them.

Financing, alongside technical expertise, remains the most binding constraint cities face. Financing climate-resilient cities will probably prove far more difficult than preparing climate action plans.

Across much of the Global South, urban climate resilience has largely been financed through public budgets. In India, for example, state government transfers, centrally sponsored schemes and direct budgetary allocations account for about 85% to 90% of municipal capital expenditure, including climate investments.

Own-source revenues largely fund operations and maintenance, while borrowing remains limited to a small number of larger cities and is typically subject to higher-level approvals, often with explicit or implicit government support.

The pattern is not unique. Urban climate resilience continues to rely heavily on government budgets and concessional finance, with private commercial capital remaining marginal. Public funding has enabled early progress but is increasingly inadequate, given the scale and systemic nature of the climate challenge cities face.

The magnitude of the climate challenge underscores why existing financing models are insufficient.