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European Commission launches new finance hub to support climate neutrality

The European Commission has announced the launch of a new Climate City Capital Hub, a new international finance resource, at the 2024 Cities Mission conference held in Valencia on 25 and 26 June. The project aims to bolster the cities within the framework of the EU Mission on Climate-Neutral and Smart Cities.

As a result of having the EU Cities Mission Label, cities will be able to access financial advice in collaboration with the European Investment Bank (EIB) advisory services, structure their financial needs to understand various ways of funding projects, including pooling of projects and introduces projects to a spectrum of capital providers. These include public and private sector lenders and investors, such as philanthropic and corporate capital, as well as innovative financing options like crowdfunding and sustainability-linked bonds. The hub will also support the process to deal closure.

The Climate City Capital Hub, supplementing EIB services, will be established with support from both the EU Mission on Climate-Neutral and Smart Cities and the EU Mission on Adaptation to Climate Change. Its specific focus will be on engaging private capital. For cities that have signed the Charter of the Mission on Climate Adaptation and have received the EU Cities Mission Label, the hub will support both mitigation and adaptation projects, adopting a holistic approach to combat climate change.

Additionally, the EIB has dedicated 2 billion euros to cities with the Cities Mission Label to support their investment plans in energy-efficient buildings, district heating systems, renewable energy, sustainable mobility, urban renewal and regeneration, water and social infrastructure.

So far, 33 cities have been awarded the EU Mission for Climate-Neutral and Smart Cities Label since October 2023. This label recognises the successful development of Climate City Contracts, which outline the cities’ visions for climate neutrality in cooperation with local stakeholders. As of now, 33 investment plans have been submitted, with another 23 currently under review.

A Knowledge Repository has been created with over 200 solutions aimed at aiding cities in achieving climate neutrality.

Cities are responsible for more than 70 per cent of global CO₂ emissions and consume over 65 per cent of the world’s energy. Thus, urban action contributes to the EU’s legally binding commitment to achieve climate neutrality by 2050 and the target of reducing greenhouse gas emissions by 55 per cent by 2030. The EU Cities Mission aims to help European cities become climate-neutral, offering cleaner air, safer transport and less congestion and noise to their citizens.

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