Malaysia, 14-15 June 2023 | From June 14 to 15, 2023, a two-day workshop on Climate Finance for Malaysian Cities was held at the AICB Building in Kuala Lumpur, Malaysia. The event, organised by the Global Covenant of Mayors for Climate and Energy (GCoM) Asia Project in cooperation with Islamic Banking and Finance Institute Malaysia (IBFIM), aimed to provide cities with technical knowledge and resources from local and international institutions to access and mobilise climate finance.
The workshop included thematic sessions on urban mobility, green and resilient infrastructure, challenges to accessing climate finance, and opportunities to overcome them. The event also included group activities and case studies from cities to provide practical learning and experience. The forum was moderated by Jacqueline Chang (the Country Coordinator for the GCoM Asia Project), Mr. Arshad Nuval Othman (Head of Sustainable Finance Group, Islamic Banking, CIMB Group), Mr. Ashish Verma (the Country Coordinator of India for the GCoM Asia Project) and featured speakers from the World Bank, HSBC Amanah, and the Delegation of the European Union to Malaysia, among others.
Opening Session
The opening session of the workshop began with remarks from YBrs. Datuk Haji Azmi bin Abdul Hamid (Executive Director of Kuala Lumpur City Hall or DBKL). He emphasised the importance of climate finance for cities and revealed that the two-day programme would provide Malaysian cities with technical knowledge and resources from local and international institutions. He highlighted that DBKL’s initiatives, such as the Carbon Management Plan, are in line with global agendas, such as the Sustainable Development Goals (SDGs) and the Paris Agreement. He also mentioned DBKL’s commitment to low-carbon and climate-resilient development, as evidenced by various actions and partnerships.
Following that, Mr. Francesco Floris (First Counsellor – Head of Trade and Economic Relations from the Delegation of the European Union to Malaysia), delivered an opening speech. He thanked IBFIM for putting the EU Guide Sustainable Meetings and Events into action and spoke about the EU Green Deal’s focus on climate change, emission reduction, international cooperation, and transportation. Mr. Floris emphasised local authorities’ role in implementing local policies, citing the Transformative Action Program (TAP) and Bankable Cities’ Climate Projects as opportunities for local governments to learn about climate financing.
Puan Madelena Mohamed (Director of the Sustainability Unit, Bank Negara Malaysia) emphasised the urgency of addressing climate change in her keynote address. She stressed the importance of collaboration among stakeholders and highlighted the real impacts of climate change in Malaysia. Puan Madelena outlined the government’s commitment to combat climate change through national policies and called on financial institutions to align their policies with national objectives. She highlighted the need for a global approach and coordinated actions to achieve climate resilience.
Accelerating Sustainable Urban Mobility: Electrification and Transport Modelling for Green Infrastructure
Two experts highlighted critical subjects and engaged in insightful discussions during the thematic session on urban mobility, and green and resilient infrastructure. Mr. Joachim Bergerhoff (Team Leader of Sustainable Mobility in Metropolitan Regions [SMMR] in ASEAN) highlighted the development of local electrification policies and projects, emphasising the benefits and challenges of electrification. He urged local authorities to focus on sustainable mobility strategies above car-centric planning, as he advocated for the inclusion of electric vehicle solutions in public fleet procurement. The discussion touched on successful electronic vehicles (EV) examples from various countries and concerns regarding the lithium market and recycling processes.
Mr. Conrad Richardson (Senior International Technical Advisor, SMMR) emphasised the importance of transport modelling for decision-making, project development, and accessing financial resources. He explained the different types of transport models, their use, data requirements, and collection methods. The session provided valuable insights into electrification policies, sustainable mobility strategies, and the role of transport modelling in urban infrastructure planning.
Enhancing Resilience: Flood Management, Adaptation Planning, and Innovative Solutions
The thematic session on disaster risk reduction management focused on flood management and response plans, featuring several experts who shared valuable insights and initiatives. Mr. Heinrich Gudenus (Project Director of Urban Act) spoke about Thailand’s National Adaptation Plan (NAP) and its integration into national strategies and sub-national planning. He emphasised the importance of vertical integration and the utilisation of existing climate finance mechanisms. The session also introduced GIZ’s “Small and Medium Grants Fund” and highlighted the challenges faced in developing the NAP, such as accessing robust evidence and gathering data. Dr. Rajan Chedambath, representing the Kochi City Government, and Mr. Dino Alessi, representing the Municipality of Messina, presented the flood management visualisation toolkit, TOSCA, for water management and shared experiences from Kochi and Messina. They highlighted the significance of international collaboration and the use of data in the planning and implementation of efficient flood management strategies. Mr. Mario Aguilera and Ms. Caritta Seppä from Tespack showcased their innovative portable energy solutions, emphasising their relevance in disaster-prone regions and their partnerships with organisations, like UNICEF and World Vision. The session provided valuable insights into flood management, adaptation planning, and the importance of innovative technologies in disaster response and recovery efforts.
Creating Healthy and Sustainable Buildings: Innovations in Indoor Air Quality and Environmental Monitoring
Mr. Dustin Jefferson Onghangseng (CEO of uHoo) spoke about the company’s technology for monitoring and managing environmental factors inside buildings to improve health, decarbonisation, as well as Environmental, Social, and Governance (ESG) performance. He shared case studies demonstrating the positive impact of uHoo’s product, including a building in the Philippines recognised as the healthiest in Southeast Asia, decarbonisation efforts in a Singaporean building equivalent to removing 1,700 cars from the road annually, and a city-wide project in Europe in collaboration with a European government. Mr. Dustin also mentioned the reduction of COVID-19 risks in Japanese corporate offices and the Singapore government’s launch of new indoor air guidelines. The discussion touched upon the appearance and placement of uHoo sensors, the company’s consultation services, and the importance of monitoring CO2 levels both indoors and outdoors. uHoo’s focus on improving health and decarbonisation through indoor air quality enhancement aligns with the principles of ESG.
Enabling Climate Finance at the City Level: Tools and Platforms for Sustainable Infrastructure and Energy Projects
Various specialists gave presentations throughout the session on tools and platforms for facilitating climate finance at the city level featured presentations by various experts. Mr. Ivan Fuentetaja (Urban Development Specialist, Sustainable Development and Climate Change Department [SDCC], Asian Development Bank [ADB]), introduced the Cities Development Initiative for Asia (CDIA), which assists secondary cities in developing bankable, sustainable and aligned infrastructure projects. CDIA covers project identification, preparation studies, capacity building, and monitoring and evaluation. Ms. Kathleen Jovellanos (Capacity Development Specialist of CDIA) emphasised the importance of bankability in project planning and development, highlighting three funding schemes: public, public-private, and private financing. The discussion touched upon successful modalities in other locations and the importance of engaging private sectors.
Another speaker, Mr. Noor Iziddin Abdullah (Senior Energy Advisor, C40 Cities Finance Facility or CFF, Deutsche Gesellschaft für Internationale Zusammenarbeit or GIZ GmbH), discussed the CFF work, focusing on Kuala Lumpur’s projects related to renewable energy, energy efficiency, and district cooling systems. Lastly, Mr. Marc S. Forni (Lead Specialist, World Bank) demystified carbon finance markets and discussed opportunities for cities to access international markets, including carbon pricing instruments and carbon trading. The discussion covered topics, such as carbon taxation, transparency, and establishing carbon credits as a new revenue stream. Overall, the session provided insights into tools and resources for cities to access climate finance and develop bankable projects that contribute to sustainable development.
City Climate Finance Gap Fund and FMDV Global Fund for Cities Development: Financing Climate Ambitions and Sustainable Urban Development
The City Climate Finance Gap Fund and the FMDV Global Fund for Cities Development were introduced as crucial mechanisms to support cities in developing and emerging countries in realising their climate ambitions. By connecting cities with technical experts and partners, such as GCoM, WB, EIB, C40, and ICLEI, the Gap Fund strives to bridge the initial project implementation gap. For a few years, the fund has been mobilising resources throughout the world and assisting developing countries. The discussion highlighted the need for aggregating small-scale interventions to make them more bankable and attract financiers. The example of Ho Chi Minh City showcased the World Bank’s support in accessing carbon markets and implementing decarbonisation measures. The session also emphasised the importance of Monitoring, Reporting, and Verification (MRV) for transparency and the potential of digital MRV systems.
Ms. Margot de Groot van Embden (Programme Manager, FMDV – Global Fund for Cities Development) spoke about the challenges of funding climate-resilient infrastructure, emphasising risk mitigation, project preparation, and leveraging private investment as key areas of focus. The session allowed participants to engage in group activities and discussions to identify challenges faced by Malaysian cities and explore viable financing mechanisms. CDIA, represented by Ms. Kathleen and Ms. Analyn Rubenecia (Communications and Outreach Specialist of CDIA), also offered coaching sessions to support cities in developing bankable and sustainable infrastructure projects. Overall, these initiatives contribute to filling the climate finance gap and enabling cities to transform low-carbon and climate-resilient ideas into finance-ready projects.
Challenges to Accessing Climate Finance and Opportunities to Overcome
Participants in this session learned about the practical experiences of Southeast Asian cities in accessing and mobilising climate finance. Several case studies were presented, showcasing successful recipients of climate finance and highlighting projects implemented through innovative funding mechanisms. These included the Palembang City Government in Indonesia, which received technical assistance through the City Climate Finance Gap Fund, or simply, the “Gap Fund” for green and resilient construction and energy-efficient affordable housing. Dr. Akhmad Mustain (Head of the Environment Department, Palembang City Government), stated that a Climate Action Plan was needed in order to receive technical assistance from the Gap Fund. Penang Island City Council, represented by Dr. Sofia Castelo (Technical Advisor – Climate Adaptation and Nature-based Solutions, Think City) and Puan Lee Tit Kun (Director, Heritage Conservation Department, Penang Island City Council or MBPP), shared their experience as a recipient of the Climate Adaptation Fund, focusing on climate-resilient urban tree species and implementing the Penang Nature-based Climate Adaptation Programme.
Puan Kamisah Mohd Ghazali (Head, Resilient Environment, Iskandar Regional Development Authority or IRDA) discussed their success as a grant recipient of technical assistance under the UK-Pact and project implementation under the Green Technology Application for the Development of Low Carbon Cities. On behalf of Kuala Lumpur City Hall (DBKL), Puan Norzaini binti Noordin (Director, Project Implementation & Maintenance Department, DBKL) and Mr. Noor of CFF also presented their initiatives, such as implementing a district cooling system and reducing energy consumption through renewable energy and energy efficiency measures in public buildings. Group discussions delved deeper into the challenges and opportunities associated with in accessing climate finance, yielding valuable insights and recommendations.
Financing Climate Actions and Islamic Social Financing for the Community
Raja Amir Raja Azwa (CEO, HSBC Amanah Malaysia and Chairman of the Joint Committee on Climate Change or JC3) engaged in a dialogue with 21 Malaysian cities participating in the Global Covenant of Mayors (GCoM). The focus was on exploring climate finance instruments and examples of projects in Malaysian cities. Concessional loans, plastic credits, green/climate bonds, and carbon pricing were all discussed as ways to finance climate actions. The combination of public and private finance was also highlighted as a means to generate the necessary capital for climate projects. Challenges and the urgent need for climate finance grants were communicated by the GCoM Malaysian cities to the JC3 for their consideration and potential channeling to the Ministry of Finance. Another session delved into the concept of Islamic Social Financing (ISF) and its potential for benefiting community-focused Public-Private Partnerships (PPPs) implemented by city councils in Malaysia. The aim was to explore how Islamic financial institutions could contribute to alleviating hardships caused by the COVID-19 pandemic and support strategic actions within the ecosystem.
Upcoming Workshop in Other Southeast Asian Countries
Similar workshops are scheduled to be organised in two additional Southeast Asian countries: Vietnam and Indonesia. These workshops aim to convene representatives from selected cities within each country, providing them with the opportunity to engage directly with national-level ministries and develop proposals in collaboration with climate financial institutions.
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Our media partner, ClimateTechReview, attended the event and posted some key takeaways that will be useful to understand the context of the workshop, which can be accessed here: ClimateTechReview.
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Written by: Iffah Zati Mazaya
Reviewed by: Rona Ikram Putri
