Strengthening Multilevel Financial Architectures for Subnational Climate Action

Closing the subnational climate finance gap requires structural change in how finance is governed, channelled and deployed. Subnational governments hold public mandates, assets, revenues and investment responsibilities essential to national climate ambition. Strengthening their financial capacity can expand countries’ investment potential, mobilise domestic resources and translate international support into lasting development outcomes. This requires adequate, predictable resources and financial architectures that give subnational governments meaningful roles in shaping investment priorities, accessing finance and directing implementation.

COP31 offers an opportunity to advance this reform agenda under the Global Climate Action Agenda (GCAA)institutional and operational umbrella. This session will bring national and subnational leaders together with public development banks, climate funds and leading cooperation initiatives to examine how dedicated subnational financial architectures can become a structural pillar of climate finance. The dialogues will address the institutional and regulatory changes needed to expand fiscal space, improve financing conditions and build permanent domestic capacity to prepare and deliver territorial investment. Particular attention will be given to adaptation, essential public services and territories whose needs require grant-based and highly concessional support. As a Solutions & Delivery event of Activation Group 11 on multilevel governance, it will examine how country platforms for localizing finance, domestic financial intermediation and project preparation advance the Plan to Accelerate Solutions (PAS) on multilevel governance.

Three connected dialogues will move from strategic frameworks to institutional practice and financing solutions. CHAMP and its Multilevel Finance Toolkit, the COP31 Presidency’s Sustainable Urban Resilience Financing Facility (SURFF), and FMDV’s Country Platforms for Localizing Finance (CPLF) will explore how their approaches can reinforce country-owned systems co-designed with subnational governments. The Country Platforms Hub will react to these proposals and comment on how to better interact with them considering its mandate. For the new CHAMP Toolkit and SURFF initiative, speakers will outline initial deployment steps, intended partnerships and near-term milestones.

Experience from Dominican Republic, Morocco, Brazil and Cameroon will ground the discussion in implementation realities, including the role of national and subnational development banks and funded preparation ecosystems. In the Cameroon and Madagascar CPLF pilots, 71 local and regional governments were reported at COP30 as engaged in prioritising resilient infrastructure pipelines. FMDV and FEICOM will be invited to explain the institutional arrangements taking shape in Cameroon and present subsequent progress, remaining bottlenecks and financing needs. The Green Climate Fund, drawing on its Locally Led Climate Action framework, and a multilateral development bank invited through the MDB Cities Group will discuss how their instruments and partnerships can support these changes.

Contributing to COP31’s Climate Resilient Cities priority and connecting the GCAA’s work on multilevel governance, resilient infrastructure and finance, the session will identify reform priorities and opportunities for convergence among existing initiatives. The discussion will explicitly connect these experiences to PAS implementation levers: inclusive multilevel governance, policy and regulatory reform, knowledge and capacity-building, and public and private finance.

Joint conclusions will consider how the Action Agenda can provide a stronger political framework for multilevel finance cooperation, support institutional transformation and mobilise public and private investment on terms that strengthen local decision-making, fiscal sustainability and public value.

Hosts: Global Fund for Cities Development (FMDV), Global Alliance of Subnational Development Banks, AMUF Alliance of African Ministers for Urbanization Financing, CHAMP secretariat, Cities Climate Finance Leadership Alliance (CCFLA), Viable Cities Sweden, Global Covenant of Mayors for Climate & Energy (GCoM)

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