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CDIA: Linking Cities to Financing

Joris van Etten, Deputy Program Manager
Cities Development Initiative for Asia (CDIA)

Prioritizing City
Infrastructure Investments
5/14/2014

5/14/2014

ASIAS URBAN CHALLENGES

FLOODING

MIGRATION

CONGESTION

SLUMS
TRAFFIC

POLLUTION

TRANSPORT

OVER
CROWDING

WASTE

INFRASTRUCTURE SOLUTIONS
SOLID WASTE
MANAGEMENT

WATER TRANSPORT
URBAN
REGENERATION

BRIDGE

ROAD
NETWORK
POWER
SUPPLY

MASS RAPID
TRANSPORT
AIRPORT

INDUSTRIAL
PARK

WATER
SUPPLY

5/14/2014

SETTING PRIORITIES
SOLID WASTE
MANAGEMENT

WATER TRANSPORT
URBAN
REGENERATION

BRIDGE

ROAD
NETWORK
POWER
SUPPLY

MASS RAPID
TRANSPORT
AIRPORT

INDUSTRIAL
PARK

WATER
SUPPLY

CHANGING PRIORITIES

5/14/2014

CHANGING PRIORITIES
PRIORITISATION OF
PROJECTS IS THE MOST
DIFFICULT AND POLITICALLY
SENSITIVE PART OF ANY
PLANNING AND
PROGRAMMING EXERCISE

1
Analysis
Financial
Capacity

2
3

Project
Prioritisation

FROM WISHLIST TO SHORTLIST

Investment
Programming
THE FINAL RESULT IS A PRIORITY INVESTMENT PACKAGE (PIP)

5/14/2014

City Infrastructure Investment

Prioritization and Programming

EXCEL WORKBOOK

MANUAL

3 STEP APPROACH
STARTING POINT:

LOCAL
GOVERNMENT
BUDGET

WISH LIST
POTENTIAL
PROJECTS

STEP 1:
STEP 2:

ANALYSIS FINANCIAL
CAPACITY

PROJECT
PRIORITSATION

STRATEGIC
INVESTMENT
BUDGET

SHORTLIST
PRIORITY
PROJECTS

LOANS &
ALTERNATIVE
FINANCING SOURCES
STEP 3:
INVESTMENT
PROGRAMMING

RESULT:

ALTERNATIVE
INVESTMENT
PACKAGES

OR

OR

5/14/2014

PROJECT PRIORITISATION:
QUESTION CATEGORIES
PROJECT PURPOSE

PUBLIC RESPONSE

ENVIRONMENTAL IMPACT

SOCIO-ECONOMIC IMPACT

FEASIBILITY OF IMPLEMENTATION

FINANCIALS

PROJECT PRIORITISATION: THE SCENARIOS

ECONOMIC
Contribution to services crucial to foster economic
growth and stimulate business employment beyond the
operation and management of the infrastructure itself.

ENVIRONMENTAL
Improves the environmental quality in and around the
municipality and/or the environmental health of the
community

SOCIAL
Contribution to the fair and equitable redistribution of the fruits of
economic success among all segments of the community especially
the most vulnerable and disadvantaged groups

REVENUE GENERATING
Generates revenue for the local municipal budget, thereby making
the financial situation of the municipality more healthy

5/14/2014

PROJECT PRIORITISATION: RANKING

PROGRAMMING FOR INVESTMENT

GRAPH 1: CAPITAL INVESTMENT REQUIRED VERSUS
EXPENDITURE LIMIT
1.000

GRAPH 2: LOANS REQUIRED VERSUS

DEBT SERVICE CAPACITY
100

Total Capital Investment (own source)

900

90

Existing Expenditures

800

80

Expenditure Ceiling

700

50

400

40

300

30

200

20

100

Estimated Max Debt Service

60

500

Existing Annual Debt Service

70

600

New Loans: Annual Debt Service

10

0
2009

2010

2011

2012

2013

2009

2010

2011

2012

2013

5/14/2014

Using CIIPP in a Green City Context:

Vinh Yen
Vice Chairman of Vinh Phuc
province, Vice Chairman of Vinh Yen
City, and Vice Chair of DPI chaired a
meeting in which tool was used.
Different agencies proposed 10
projects. Top 3 prioritized projects:
Dredging of Dam Vac Lake
Solid waste treatment for the City
Reserve and Development of
greenery in Vinh Yen city (street
trees)

Vinh Yen CIIPP: Conclusions

In-sight into the financial capacity of the city and the
internal financial mechanism between City within province
In-sight into key aspects of proposed projects (social,
environmental, economic, feasible, and objectives)
City wide participation in project prioritization reducing pet
project risk
Save transaction cost, speed up project implementation

5/14/2014

Rolling out the tool

21 organizations in the
region trained to use the
tool
Tool adapted to country
contexts (China, India,
Indonesia, Philippines,
Vietnam, Sri Lanka)
Tool used in over 50 cities
In 20 cities this lead to
further Pre-Feasibility
Study work

Valenzuela, Philippines

Xinyu, China

Rolling out the tool

Rajkot, India

Biratnagar, Nepal

Shimla, India

Hung Yen, Vietnam

5/14/2014

Joris van Etten

Deputy Program Coordinator CDIA
Joris.van-etten@giz.de

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