ADB's Work in Urban Development

Cities generate over 80% of gross domestic product (GDP) in many countries of the
Asia and the Pacific and are engines of economic growth that have lifted millions
from poverty, but as they swell in size and number they are under increasing strain.
Asias cities will become home to another 1.1 billion people in the next two decades
as the poor continue to be drawn to better opportunities. Over 200 million now live in
urban slums, a number predicted to soar to a staggering 692 million by 2015. Many
cities are already struggling with environmental degradation, traffic congestion,
inadequate urban infrastructure, and a lack of basic services, such as water supply,
sanitation and waste management. Maintaining vital economic growth, while creating
sustainable liveable cities for all is the biggest urban challenge facing Asia.

Since the 1960s, ADB has been assisting its developing member
countries (DMCs) meet this challenge with about $15 billion in
funding for 200 urban development projects, which have improved
urban transport, waste management, and access to clean water and
sanitation. Future ADB assistance aims to promote better city
management and a larger private sector role in the delivery of
services.
The challenge for Asias cities is to transform from archetypal
chaotic, polluted, inequitable and financially constrained cities to
competitive, green and inclusive cities.
Bindu N. Lohani Vice-President (Finance and Administration) Asian
Development Bank, at the Toronto Forum for Global Cities 5th
Annual Meeting, Canada, 24 October 2011
To help urban managers cope with the needs of the estimated 120,000 people added
to the regions cities daily, ADB is focusing on integrated approaches that specifically
target the poor, promote economic development, treat cities as living ecosystems,
involve the private sector and civil society, and adopt measures to mitigate and adapt
to climate change impacts of urbanization.

ADB support for sustainable urban development is guided by its long-term strategic
framework, Strategy 2020. ADBs renewed assistance to the urban sector is
grounded in a comprehensive assessment of its DMCs urban issues and their fiscal
and institutional structures. Assistance not only funds project development, early
stage investment and sustainability needs but also makes full use of ADBs flexibility
and range of financial and technical assistance instruments to catalyze private sector
and capital market finance for urban infrastructure projects.
The Urban Sector Strategy published in 1999 underpins ADBs leadership role in
urban development. Building on this, ADBs New Urban Operational Plan covers
clean water, sustainable transport, energy, solid waste management, urban planning
and financing. The plan fosters Competitive, Inclusive, and Green Cities to improve
the performance of cities on the Economic, Equity, and Environment (3Es) fronts.

Green cities
If urban expansion goes unchecked in the developing world the environmental
impact will be catastrophic. With about 75% of greenhouse gas emissions generated
by urban areas a growing number are embracing a new strategy to manage their
rapid urbanization by promoting compact, energy-efficient, green, slum free, safe and
livable cities, more reliant on mass transit than on cars. They are adopting an
approach that involves new forms of engagement and finance and the flexibility to
adapt to the circumstances of each city.
To encourage the sustainable development of cities, ADB assists national and city
governments to promote local land use and transportation patterns that encourage
the development of zero or low-carbon transport; energy-efficient infrastructure; and
local government initiatives that encourage low-energy and zero carbon directions.

Inclusive cities
The role and shape of cities are changing as more people migrate to urban areas
looking for economic opportunities and quality-of-life improvements in education,
health, and housing. But urban citizens do not share equally in the benefits of
economic growth and progress, and failure to prepare for and address the needs of
urban poor in cities has created overcrowded inner-city tenements, slums, and
informal settlements.

Like many cities and governments across Asia and the Pacific, ADB is determined to
make cities livable and inclusive by addressing the problems resulting from rapid
urbanization and the limited capacity of basic service delivery systems to keep pace
with growth. It will support investment focusing on local infrastructure, community
facilities, transport infrastructure, habitat and shelter, and support for livelihood and
commerce. To help cities become inclusive, ADB funding supports the planning and
provision of quality, high capacity public transport linking people to jobs and
affordable, well-serviced high density, mixed-use development.

Competitive cities
Competitive cities attract investment and create jobs that reduce poverty and
unemployment. They generate productivity gains by maximizing the advantages of
their location and\or proximity to natural resources, efficiencies from the clustering of
companies, and supporting infrastructure. As part of its City Cluster Economic
Development agenda ADB plans to support inclusive economic development by
targeting assistance to the development of successful industry clusters through
interventions in infrastructure, skills development, research and development,
specialized finance and regional cooperation. ADBs Urban Community of Practice,
established in 2007, facilitates knowledge flow on such urban issues and the sharing
of expertise.

Partnerships for urban progress

The Cities Development Initiative for Asia, supported by ADB and the governments
of Germany, Sweden, the Peoples Republic of China, and Austria, help cities shape
and prioritize their infrastructure development plans and assess priority projects at a
pre-feasibility stage. To June 2011, 31 cities in 13 countries have participated in the
initiative and approximately $11.3 million of core resources have generated an
investment pipeline of approximately $5 billion.
ADBs Urban Financing Partnership Facility with the Government of Sweden also
supports innovative urban environmental, pro-poor projects and provides investment
co-financing, technical assistance and guarantee support to urban infrastructure.

Private sector
To meet the growing demand for energy, transport, telecommunications, water and
sanitation ADBs 32 DMCs will require a staggering $747 billion annually. The

importance of the private sector in helping to meet these investment needs cannot be
overstated. With the private sector currently accounting for only about 20% of
infrastructure spending in Asia, ADB is scaling up efforts towards private sector
development and private sector operations, guided by the new Urban Operations
Plan.