The associated move away from grant-based assistance towards the encouragement of private sector investment and blended financing through the much-expanded EFSD+ further raises important questions for the role of LRGs, as facilitators of investment and leveraging private capital. Arguably, LRGs will need greater autonomy and capacity to generate own source revenues, along with more stable and predictable national government support through intergovernmental fiscal transfers to improve “creditworthiness” and develop “bankable” projects. The work and technical support of UCLG consultation mechanisms and working groups, in particular the Global Fund for Cities Development (FMDV) and the UCLG Capacity and Institution Building (CIB) working group, and of its technical partners such as the United Nations Capital Development Fund (UNCDF) are especially relevant here along with governance reforms that provide the fiscal and functional devolution necessary to leverage investment at the sub-national level.
44 Policy Forum on Development. (2020). Closing event of the Virtual PFD on 10 December. https://europa.eu/capacity4dev/policy-forumdevelopment/wiki/closing-event-virtual-pfd-2020-10-december
The COVID-19 pandemic has created accelerated action towards a ‘European Green Deal’, and there are signs this will be a prominent feature in current and future programming targets for climate action including mitigation and adaptation, alongside digitalisation, and social protection.44 As proved by their increased involvement in city-to-city, national, regional and global associations and networks, and being on the front line during the pandemic, LRGs have an extremely important role to play in achieving these aims where they are given the agency and capacity to do so. Their strong and sustained involvement in all phases of the programming and implementation cycle is therefore crucial. 37
Local and Regional Governments’ Access to EU Innovative Development Financing: Mechanisms and Opportunities
resources is beneficial and required to meet the scale of these challenges, it should not divert attention away from longer-term sustainable development or the realities on the ground.