Banking Smart Cities with Futuristic Financing Approaches

As public funding falls short of fulfilling the needs of smart cities, innovative finance models step in, urging private enterprises to save the day with effective solutions addressing the dire situation at hand. Presenting propositions to investors and stakeholders can be overwhelming, but modern methods of financing smart cities take on an approach that will make your investors jump on board.

As the pressure on a city’s indigenous natural resources aggrandizes, the future of smart cities grows bleaker by the minute. But what if we could blaze a trail to the judicious use of natural resources while also increasing the longevity of smart cities? The answer is yes. Pioneering cities across Europe have adopted financing tools like green bonds, tax increment financing and revolving funds. Thus, there is an urgent need to develop innovative financing models drawing from the experiences of government officials, industry experts, and specialists working in the field. 

Integrating smart technologies is at the top of every city’s to-do list, but getting the financing, and procurement of large-scale smart cities projects is where the doubt begins to trickle in. Energy-efficient financing solutions focus on 2 chief tools to mobilize public funds to back innovation: 

Suggestive of its name, the alliance approach empowers governments to establish new partnership ecosystems and effect flexible procurements of products and services, equipping municipalities to test and adopt smart cities solutions; petit à petit upscaling to facile solutions with real benefits. A value deconstruction mindset will empower every partner in the smart city ecosystem to generate value that will contribute to his own growth while empowering the smart city future. Solid governance framework can orchestrate the whole value recognition schema.

Championing Public-Private Partnerships:

The following guidelines can be helpful to initiate public-private partnerships: 

• Articulate the desired outcomes and the objectives in an agile mindset style.
• Inventory the assets that the respective public and private sectors have at their disposal and assess the value the assets provide to the city and the private firms. Next, try to dissect the business model, the risks it poses, its sustainability and viability.
• Elect a decision-maker or a government official to streamline planning and facilitate relationship building. The public representative can also act as a sponsor endorsing the public-private partnership. Locally fostering smart city projects attracts private partners and residents who flock to projects with appealing social perks. Such projects are also on the radar to receive philanthropic funding from private enterprises.
• Pitch a business proposal that is hard to say no to. When potential partners see your business case, they should see the value which will make them want to know more and fund your project.
• Finally, work on building ties with third-party entities, which will promote role clarity, political feasibility and facilitate procurement. A third-party entity can assist partners and cities in making sense of city governments and private consortia, presenting a clear platform for decision-making and planning.

Proven benefits of public-private partnership notwithstanding, several countries still need to take measures to build private sector confidence, ensure a legal umbrella for equity protection armed with necessary safeguards to protect public interests, develop a policy framework, and adopt comprehensive legislation. Initially, what smart cities call for is a prudent approach to combat over-exploitation of public sector resources and facilitate judicious fund management and a sustainable approach to control escalation in the prices of consumer goods and services.

Sprawling urban cities are causing an upheaval in all spheres of urban life; city planners must orchestrate financial instruments to elevate robust planning and finance systems, sustaining an ‘eco’ comeback from the throes of the pandemic. 

Smart city initiatives aim to increase energy-efficient mobility solutions, curtailing CO2 emissions, and cutback in delays, encouraging urban-dwellers to partake in a reduction of emissions and per capita energy consumption. Coalescing renewable energy, smart distribution grids, urban mobility and ICT to enhance quality of life, embrace social acceptance and empower citizens, smart cities are nudging inhabitants, stakeholders, and institutions towards an enriching, eco, inclusive and resilient community.

As far as benefits are concerned, smart city planners have it all figured out well. With private actor support, public funding and key partnerships, smart cities can promote sustainable and climate-smart transport, including energy security; all whilst taking into account the elderly, special groups and most importantly, climate change scenarios.