The FMDV was devised by the local authority members of METROPOLIS and of UCLG (United Cities and Local Governments).

The FMDV is an international NGO registered under French law that enables emerging and developing local authorities to access to domestic and foreign financial resources to fund for their urban development projects.

The FMDV is neither a bank nor a finance fund - it is a tool for technical assistance and financial engineering.  It is a political instrument for solidarity between local authorities which complements existing mechanisms.

The FMDV assists local authorities supporting them in the whole process of urban development projects:  design, planning, fund-raising, implementation and evaluation.

The FMDV is a political instrument of solidarity between cities dedicated to fund-raising to support their projects.  The FMDV’s members are drawn from the CGLU and METROPOLIS, who are the primary founders:

-          UCLG is the body that represents local authorities and therefore speaks for them to the international community;

-          METROPOLIS is the world association of major metropolises and of metropolitan regions.  METROPOLIS is the metropolitan section of UCLG;

The FMDV is a partner in the CITIES ALLIANCE, a coalition of the World Bank, UN-Habitat, 18 Governments, CGLU and METROPOLIS as well as private foundations.  The Cities Alliance supports cities in defining their development strategies and helps them to eradicate  slums. It works as part of national programs.

The FMDV is a direct descendant of these three entities and of their component parts.  It aims to incorporate urban development programmes and projects into local development dynamics. The FMDV works closely with CGLU Africa and CGLU Middle East and West Asia (MEWA) who both host a FMDV office in Rabat and Istanbul.

The city of Mashhad (Iran) hosts a branch of the FMDV which trains managers in the MEWA Region and provides technical assistance to local projects in this region.

The FMDV considers that the local economy should finance local development.  It is therefore essential to help local authorities to manage their financial risks properly in order to mobilise local resources, and, where necessary, in order to supplement them with national, regional, or international funding.

The essential aim of the FMDV is to facilitate access for local authorities to the available financial resources by:

-          promoting local funding for urban projects through the development of endogenous social and economic dynamics that are both sustainable and competitive.  The FMDV believes that the local economy should primarily fund local development;

-          involving local people and local actors in the definition and financing of projects to ensure ownership and reduce costs, and improve quality and relevance;

-          strengthening the credibility of local authorities, their projects and the urbanization programmes they manage, vis-à-vis funding bodies, to facilitate their investments or loans (credit);

-          supporting local authorities and governments in the establishment of conditions for sustainable local economic development that is properly linked to the constraints of the local, national and international contexts;

-          strengthening the existing decentralized cooperation that is the basis for solidarity between local authorities;

-          promoting the development of decentralized South/South or Emerging/South cooperation;

-          providing sufficient domestic and external guarantees.

It supports innovation in urban development, and, by listening attentively to the population, facilitates the development of alternative techniques best suited to expressed needs, and which are the most economical to implement.

It supports local urban development with the goal of reducing the rich/poor duality both between populations and also between different areas within the same urban entity.

It offers effective solutions for practical solidarity at the service of sustainable development and of financial security.

The FMDV follows a code of ethics that fosters the principles of solidarity, exchange, co-operation, and participation.

Its originality lies in its participative model for developing projects between its various members, in order to enable a cross-cutting approach to be applied to the projects and to the way they are controlled in space, in time, and across the various sectors.  It is a necessary lever between the local authorities and the local, national, and international financial backers.

Its approach consists in supporting local authorities by helping them lead their projects, and in supporting their institutional, technical, and private partners in the entire process of urban development, from programme and project design, through to programme and project funding, implementation, and assessment. This support through technical assistance is essentially based on the experience of decentralised co-operation and of financial engineering, making it possible to facilitate access to funding.

In order to cascade its action, the FMDV needs to call upon partners who must follow the same fundamental principles as those recalled above.  Since it is not designed to act on financial markets, but rather to act as a facilitator, it will, depending on the size and structure of the funding schemes to be undertaken, use the services of financial intermediaries, on an occasional basis or through partnerships.

Finally, it should be recalled that, locally, the FMDV works closely with the municipal funding institutions, who are essential players in local development funding.

To this end, in order to supplement its services, the FMDV is entering into an initial partnership, in the form of a preferential mandate, with a financial intermediary EVENSEN DODGE INTERNATIONAL Inc., (EDII), in order to give risk-free (interest rate, exchange rate, credit, contra) access to all of the financial instruments available on the market, for projects that it considers feasible and that it implements financially.

In partnership with EDI, a global independent adviser in public finances, the FMDV will propose innovative and dynamic management of the available financial resources via a commercial company dedicated to financial management of the projects, namely CITIES DEVELOPMENT FINANCIAL CORPORATION (CDFC), which is authorised to act on financial markets.

Action by CDFC for identified projects should enable the FMDV to supplement the public capital and own funding that is assigned to projects through its own engineering activity.

The potential investors, be they institutional investors, banks, or other financial backers, now deal with CDFC, which accepts the aforementioned market risks, thereby avoiding doubts about the financial feasibility of the projects presented and reducing the legal conflicts regarding negotiation of the projects.

Thus, through market financial intermediation and financial engineering, the mission of the FMDV is based on two complementary management modes that also remain independent alternatives:

-        either: financial engineering is needed on the project to access existing sources of funding such as a request to a backer or a bank having the right tools for local authorities.  It will then be internalised by the FMDV, requested by its members and partners or outsourced to private expertise;

-        or: financial engineering is required for access to sources of market financing.  On its commercial side, financial engineering will be entrusted to Cities Development Financial Corporation (CDFC) which will accompany the contracting authority in the process of raising funds and, depending on the case, in support in management of the funds raised.  In this case, the financing arrangements will be reviewed jointly by the contracting authority, CDFC and the FMDV and submitted to the CDFC management oversight committee.

In the latter scenario, a capital mobilization fund (CMF) dedicated to the project could be created and managed by the local authority, to provide independent management of  economic flows and accounting of each investment or programme. CDFC provides the technical assistance necessary for their implementation and serves as their business partner insofar as it acts as a financial intermediary in the capital markets.

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

A supervision committee made up of members of the Board of Directors of the FMDV is in charge of checking that all of the deeds performed by CDFC comply with the ethics and directions followed by the FMDV.

They are funds dedicated to the projects, managed by local, regional, or national authorities that make it possible to identify and to manage independently the economic and accounting flows of each investment or programme.  CDFC provides the technical assistance required for setting them up, and serves as a commercial partner by acting as a financial intermediary on the capital markets.  As many CMFs as necessary can be set up, either at project level, or at country level.

A port-folio of ten projects to be implemented over the first three years of operation of the FMDV is under construction.  At the end of that three-year period, the projects will be assessed in order to validate operational running of the FMDV.

The Board of Directors of the FMDV decides which projects will be selected, based on the opinion of the selection committee.

Any organisation, public or private, or association, may apply for membership of the FMDV to its Board of Directors.  Applicants should complete the membership form that is downloadable from the FMDV website and to send it officially to the President of the FMDV.

The Board of Directors of the FMDV will then vote on the application.

The Articles of Association of the FMDV make provision for various types of membership:

-          Founder Member: sits on the Board of Directors, votes on the budget and on the strategic focuses of the association, chooses among the projects and programmes requesting the support of the FMDV, and undertakes to make his or her expertise and technical assistance available for the projects...

-          Active member: participates in the actions of the structure by making expertise and technical assistance available for the projects, and in value-added actions (organisation and hosting of seminars), and proposes programmes and projects to be supported to the Board of Directors, etc.

-          Honorary Member: qualified personality bringing know-how to the FMDV and who is associated with communications on the actions of the structure and is kept informed of the proposed programmes and actions.

-          Associate Member: gives financial support to the FMDV, offers expertise and know-how on specific actions; participates in leading the FMDV network.

Only local authorities who are members of the FMDV can apply to the FMDV for assistance.  Assistance applications from founder members are given priority.  Applications are put to the selection committee which decides on the relevance of the projects.  Local authorities who are not founder members of the FMDV should be active members and should have paid the corresponding membership fees.

The FMDV board of directors decides which projects are retained, based on the opinion of the selection committee.

To benefit from the FMDV support, the project developer (local authority, community organization, public or private) must be a member of the FMDV. It must file its project proposal to the FMDV Office as per the schedule adopted by the Board of Directors.

The candidate must complete an outline project proposal that describes the action and its context (financial status of the authority, local community capacity to undertake such a project, positioning of the action in planning documents, etc. .).

This work involves writing a professional banking risk document under terms and requirements that are fully consistent with economic, institutional and organizational market practice.

The FMDV office examines the file and, if admissible, will support the applicant in defining the project, to make it technically eligible for support from FMDV.

The project is then submitted to the selection committee which decides on the project's relevance in relation to the territory and objectives set by the FMDV (economic and social impact, maturity of the project, development potential, public dynamics, benefits to the population, etc.).

The concepts of sustainable development and the social situation of the local authority will be central to decision-making.

-       The project must be carried by the local authority project-managing the action;

-       the project must meet certain basic needs expressed by the population;

-       the project must involve the population and local and national stakeholders in the project process;

-       the project must fit into a development scheme for local regulations that are consistent with national regulations;

-       the project must comply with the human, social, economic, financial and environmental rights enshrined in the regulations and in international charters.

The FMDV is managed by its general assembly, made up of members who are up to date with payment of their membership fees.

The General Assembly has sole competence for:

•           appointing, renewing, and dismissing the members of the Board of Directors;

•           amending the Articles of Association, and terminating the Association;

•           authorising the operating budget and auditing the management of the association.

The General Assembly elects a Board of Directors to manage the FMDV.  The members of the Board are elected for three (3) years, and are re-electable.

The Board of Directors comprises at least:

• The elected President
• 3 Vice-Presidents elected from among the founder members;
• 2 Vice-Presidents elected from among the active members, once conditions are satisfied;
• 5 Members chosen for their skills in urban development, international co-operation, and local authority management.

The Executive Director of the FMDV and the Treasurer take part in the work of the Board, without taking part in the votes.

An executive committee chosen from the Board of Directors is set up.  It includes the President, the Executive Director, and the Treasurer. The Executive Committee is in charge of administration of the NGO under the authority of its President.

The Executive Director manages the activities of the FMDV, and acts as commitments officer for budget and cash flow. The Executive Director is authorised to open a current account in a bank on behalf of the NGO. The Executive Director is responsible for proper monitoring of contributions from financial backers, that merely transit via the FMDV for subsequent allocation to operations. The Executive Director is responsible for managing both assets and cash flow.

The General Assembly may appoint a Regular Auditor and an Alternate Auditor.  The Regular Auditor performs his or her auditing duties under the conditions stipulated by the standards and rules of the auditing profession.

15. What are the fees for membership of the FMDV?

Proposal for membership fees