March 14, 2016

How to Fund, Finance, and Build Capacity for Sustainable Urban Mobility

nantes station cover
A BRT station in Nantes, France

The questions surrounding the sustainability of cities are no longer just what to do – many sustainable solutions have been proven effective – but increasingly, they focus on the more complicated questions of how to get it done. How to get the capital and capacity to plan, finance, and implement new urban mobility infrastructure has become a major bottleneck for progress, slowing interventions as simple as sidewalks and as complicated as rapid transit. Increasingly, cities now understand what the best practices in sustainable transport are, but lack the planning institutions, the expertise, and especially the funding necessary to undertake such projects.

In order to help cities answer these important questions, ITDP has undertaken a large research project to compare the ability of large cities to build needed rapid transit in different countries around the world. The first installment of this research compared the amount of urban rapid transit in the large cities of nine countries, evaluating the ratio of kilometers of rapid transit to urban residents (known as the RTR ratio). The study found that RTR varied widely, from 70 km of rapid transit per million urban residents in France to 10 in Brazil and Colombia to just 1 km per million in India.

How Can Countries Grow Their Rapid Transit Infrastructure_ITDP

ITDP’s second installment in this research series, released at the end of 2015, examines funding, financing, and capacity for rapid transit projects in each of these countries and explores how they impact infrastructure development. Several trends emerged:

Funding: The countries with strong growth in rapid transit tended to not only be the countries that contributed a high amount of funding (over .15% of GDP), but also those ensured that such funding was a reliable funding source for the near future. Furthermore, cities that had control over transport funds tended to spend them more cost-effectively, and where they are most needed, than when state or national governments control the purse strings.

Financing: Rapid transit infrastructure requires massive upfront investments in capital and generates returns slowly over the long term making low-interest debt instruments highly effective for financing. Countries that had access to low-cost debt – either through development banks or access to bond markets enabled by high credit ratings – saw higher infrastructure growth.

Check out our full report here.
Check out our full report here.

Capacity: In some instances, even when a government has money to spend on rapid transit, there are no project plans prepared, quality of plans are low, and implementation is slow and flawed. Countries in which infrastructure investments were subject to long-term, fiscally constrained mobility plans also tended to have more rapid transit.

In the coming weeks, a series of articles from ITDP will explore the detailed findings and implications of this research. The report offers key recommendations (see infographic), and helps cities identify tools to invest in smart, sustainable mobility.  


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