Access to funding for projects

The GFCD is not a commercial enterprise and shall not bear any financial liability for the programmes that are backed.

In order to cascade its action for access to funding, the GFCD will enter into contracts of agency with recognised market intermediaries, and will use the services of an ad hoc commercial company.

Such mandates will have three main goals:

- Organising the links, the consistencies, and the responses to security requirements through credit rating so as to bring together the best possible conditions for requesting overall funding and for accessing such funding.  The approach will consist in removing hidden costs, in selecting the products that bear low transaction costs and low interest rates, and in helping local authorities to manage future risks with great caution.

- Putting in place the instruments and tools for collecting, distributing, and amortising appropriate funds, by setting up dedicated funds that attract savings.

- Covering the costs of the action by the GFCD and by its partner, and the expenses related to that action.  Access to funding for cities and for urban development projects has a substantial intermediation cost.  Megalopolises and major metropolises in rich countries and in emerging countries are capable of freeing up the means for amortising the borrowing for that cost.  Poor cities cannot do so very much, or indeed at all.

To this end, the GFCD is planning to enter into a first partnership with a financial intermediary, Evenson Dodge International (EDI), a global independent advisor in public finances (www.dodgeglobal.com), in order to gain risk-free (interest rate, exchange, credit, contra) access to all of the financial instruments available on the market, for the projects that it determines are feasible and that it implements financially.

Through this partnership with EDI, the GFCD will propose innovative and dynamic management of the available financial means via a commercial company dedicated to financial management of the projects, namely the CITIES FINANCIAL CORPORATION (CFC), which is authorised to act on financial markets.

Action by CFC for identified projects should enable the GFCD to supplement the public capital and own funding that is assigned to the projects developed by the cities.

The potential investors, be they institutional investors, banks, or other financial backers, will deal with CFC who will assume the aforementioned market risks, thereby avoiding any doubt about the financial feasibility of the projects presented and reducing the legal conflicts regarding negotiation of the projects.

In the course of their relations, the GFCD and EDI will agree on the setting up of a “supervision committee” so that the GFCD, which is an emanation of the local authorities and that has concern for budgetary and financial constraints, can check that the public interests, in particular in the long-term, are scrupulously preserved.