The road from climate ambition to investment runs through cities

As world leaders gather at COP31 in Antalya, this gap between ambition and delivery is firmly in the spotlight. With its Climate Implementation Bridge initiative, COP31 is placing greater emphasis on turning climate commitments into investable projects and connecting them with finance. For cities, which are responsible for delivering much of the transition on the ground, getting this right is essential. 

But what does it actually take to make a climate project attractive to investors? And how can cities move beyond long lists of promising ideas to build credible investment pipelines? We spoke to Mark Robinson from Climate KIC, a city investment expert working with the NetZeroCities Climate City Capital Hub, which helps Mission cities prepare projects for investment and access public and private finance.

He explains why bankability is a critical but often overlooked step in climate implementation, how cities can build stronger investment pipelines, and what it takes to turn climate ambitions into projects that can actually be delivered.

1. In simple terms, what does bankability actually mean and how would you explain it in the context of urban climate action? 

For a city, bankability is the point where an idea has become a well-defined project whose costs and risks are sufficiently understood to attract finance. Bankability is not the same as a good idea, or a good climate outcome alone.  A project is bankable when lenders or investors have enough confidence in its costs, revenues and risks to expect repayment or a return on their investment. 

The cash flows must be predictable: who pays, how much, for how long, and under what contract. The risks must be identified and allocated to the party best able to manage each one: construction, technology, demand, price, regulation. And there must be a creditworthy borrower with the authority to sign. 

2. Why is bankability such an important issue for cities trying to achieve their climate goals? 

City budgets cannot pay for the climate transition. The investment needed is many times what a city can fund from its own balance sheet or from grants. The rest must come from lenders and investors. 

That capital exists. There is no shortage of capital for bankable projects that meet investors' requirements. The challenge is getting more city projects to that stage. 

Cities have ambitious climate plans, but these contain projects at very different stages of development. Some are concepts. Others have reached feasibility. Relatively few are yet bankable. 

The gap is the work needed to move projects between these stages of development. 

So the challenge is not simply attracting capital. It is developing projects that capital can finance. Some projects will always need public funding, but better definition establishes which can attract private investment. 

Without bankability, a climate plan stays a plan. With it, a city can use limited public funding and capacity to bring in much larger amounts of outside capital to achieve its goals.

3. What can cities do differently to improve the bankability of their climate projects? Are there specific skills, tools or institutional changes they need to develop? 

Treat project development as a discipline of its own. It is separate from planning and separate from fundraising. 

Three changes matter. 

First, understand project development as stages of increasing definition, broadly: from concept, through feasibility, detailed design to bankability. A critical part is developing the cost estimate. Early estimates have considerable uncertainty. Engineering, procurement and commercial work progressively improve their accuracy. This reduces uncertainty and gives lenders confidence.  

Second, budget for this development process. Bringing a project from concept to bankability typically costs 2 to 5% of its capital cost, sometimes more. That money is at risk, and it is spent before any lender commits. Sources include public budgets, grants and project preparation facilities. 

Third, introduce decision gates. At each stage, decide whether to proceed with the project, change it or pause. This directs limited resources towards projects most likely to succeed. 

The objective is not to develop every idea. It is to identify which ideas justify further investment and when. 

4. How important is it for cities to build a pipeline of climate projects rather than approaching investors with individual, isolated initiatives? 

A pipeline matters, but only if it is more than a list of ideas. The first test is still bankability: is each project, or group of projects, bankable? 

A real pipeline then adds: 

Scale. Many city projects are too small for a lender on their own. Similar projects can be grouped into one financing. 

Repetition. The structure, the contracts and the lender relationship from the first project carry over to the next. Each one costs less and moves faster. 

Visibility. An investor who can see what is coming will invest time in the city. 

For this to work well, the city must know the stage of development of every project in its pipeline. That tells the city where to spend its development budget and provides visibility to investors. 

Importantly, without this governance of the pipeline, projects can accumulate at the early development stage. The pipeline can become a wish list, capacity is stretched and few projects reach bankability. 

5. Can you share an example of a city that has successfully transformed its climate ambitions into bankable projects? What made the difference? 

One example is a shore power project in Trondheim. Ships at berth connect to grid electricity and switch off their engines. This cuts emissions and air pollution in the port city. Lenders are currently in the process of pricing the financing. 

Five things made the difference. 

A clear owner. One public body leads the project, applies to lenders and decides through its existing governance structure. 

Policy-driven demand. European regulation is moving ships to use shore power at berth, and ports to provide it. 

A clear revenue. The port charges ships a tariff for the electricity. A financial model tested business case options and that income can repay the debt. 

Blended finance. A public grant came first and reduced early-stage risks of project development. Debt finance provides funding for the build. 

Finance from the start. Bankability was developed alongside the project, not added at the end. Financial structuring shaped the project scope, and early lender engagement informed board decisions. 

6. If you could give one piece of advice to a city that has ambitious climate targets but doesn't know how to attract investment, what would it be? 

Put governance around your project pipeline. 

Most cities have more climate projects than they have funding or capacity to develop. So the real decision is which projects to take forward. Part of that decision is which projects suit private capital and which need public or grant funding. 

This needs a clear route from idea to bankability and investment. This means knowledge of the stage of development each project has reached, and an understanding of what it costs to move each project forward to the next stage. 

Then apply a governance procedure across the whole pipeline: at each step, decide whether each project proceeds, changes or pauses. 

Get project development and governance right, and the capital will follow.