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Prioritizing City Prioritizing City Prioritizing City Prioritizing City

Infrastructure InvestmentsInfrastructure InvestmentsInfrastructure InvestmentsInfrastructure InvestmentsJoris van Etten, Deputy Program Manager Joris van Etten, Deputy Program Manager Joris van Etten, Deputy Program Manager Joris van Etten, Deputy Program Manager

Cities Development Initiative for Asia (CDIA)Cities Development Initiative for Asia (CDIA)Cities Development Initiative for Asia (CDIA)Cities Development Initiative for Asia (CDIA)

CDIA: Linking Cities to Financing

City Development City Development City Development City Development Plan/StrategyPlan/StrategyPlan/StrategyPlan/Strategy Infrastructure Infrastructure Infrastructure Infrastructure Investment Investment Investment Investment PrioritizationPrioritizationPrioritizationPrioritization PrePrePrePre----FeasibilityFeasibilityFeasibilityFeasibilityStudiesStudiesStudiesStudies Feasibility Feasibility Feasibility Feasibility StudyStudyStudyStudy Project Project Project Project ImplementationImplementationImplementationImplementationOperation & Operation & Operation & Operation & Maintenance Maintenance Maintenance Maintenance Financing Financing Financing Financing ArrangementsArrangementsArrangementsArrangementsInfrastructure Investment Project CycleInfrastructure Investment Project CycleInfrastructure Investment Project CycleInfrastructure Investment Project CycleUpUpUpUp----streamstreamstreamstream DownDownDownDown----streamstreamstreamstreamLinking projects Linking projects Linking projects Linking projects to financingto financingto financingto financing

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ASIA’S URBAN CHALLENGESFLOODING

TRANSPORT

WASTE

POLLUTION TRAFFIC

MIGRATION SLUMS CONGESTION

OVER

CROWDING

INFRASTRUCTURE SOLUTIONSSOLID WASTE

MANAGEMENT

AIRPORT BRIDGE

ROAD

NETWORK

WATER

SUPPLY

MASS RAPID

TRANSPORT WATER TRANSPORT

URBAN

REGENERATION

POWER

SUPPLY

INDUSTRIAL

PARK

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SETTING PRIORITIES SOLID WASTE

MANAGEMENT

AIRPORT BRIDGE

ROAD

NETWORK

WATER

SUPPLY

MASS RAPID

TRANSPORT WATER TRANSPORT

URBAN

REGENERATION

POWER

SUPPLY

INDUSTRIAL

PARK

CHANGING PRIORITIES

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CHANGING PRIORITIES

‘PRIORITISATION OF

PROJECTS IS THE MOST

DIFFICULT AND POLITICALLY

SENSITIVE PART OF ANY

PLANNING AND

PROGRAMMING EXERCISE’

FROM WISHLIST TO SHORTLIST

An

aly

sis

Fin

an

cia

l C

ap

aci

ty

1

Pro

ject

Pri

ori

tisa

tio

n2

Investment

Programming

3

THE FINAL RESULT IS A PRIORITY INVESTMENT PACKAGE (PIP)

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City Infrastructure Investment

Prioritization and Programming

EXCEL WORKBOOK

MANUAL

3 STEP APPROACH

SHORTLIST

PRIORITY

PROJECTS

WISH LIST

POTENTIAL

PROJECTS

RESULT:

ALTERNATIVE

INVESTMENT

PACKAGES

STARTING POINT:

LOCAL

GOVERNMENT

BUDGET

STRATEGIC

INVESTMENT

BUDGET

STEP 1:

ANALYSIS FINANCIAL

CAPACITY

OROR

LOANS &

ALTERNATIVE

FINANCING SOURCES

STEP 3:

INVESTMENT

PROGRAMMING

STEP 2:

PROJECT

PRIORITSATION

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PUBLIC RESPONSE

ENVIRONMENTAL IMPACT

SOCIO-ECONOMIC IMPACT

PROJECT PURPOSE

FEASIBILITY OF IMPLEMENTATION

FINANCIALS

PROJECT PRIORITISATION:

QUESTION CATEGORIES

Contribution to services crucial to foster economic

growth and stimulate business employment beyond the

operation and management of the infrastructure itself.

ECONOMIC

Improves the environmental quality in and around the

municipality and/or the environmental health of the

community

ENVIRONMENTAL

Contribution to the fair and equitable redistribution of the fruits of

economic success among all segments of the community especially

the most vulnerable and disadvantaged groups

SOCIAL

Generates revenue for the local municipal budget, thereby making

the financial situation of the municipality more healthy

REVENUE GENERATING

PROJECT PRIORITISATION: THE SCENARIOS

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PROJECT PRIORITISATION: RANKING

GRAPH 1: CAPITAL INVESTMENT REQUIRED VERSUS

EXPENDITURE LIMIT

0

100

200

300

400

500

600

700

800

900

1.000

2009 2010 2011 2012 2013

Total Capital Investment (own source)

Existing Expenditures

Expenditure Ceiling

GRAPH 2: LOANS REQUIRED VERSUS

DEBT SERVICE CAPACITY

0

10

20

30

40

50

60

70

80

90

100

2009 2010 2011 2012 2013

New Loans: Annual Debt Service

Existing Annual Debt Service

Estimated Max Debt Service

PROGRAMMING FOR INVESTMENT

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Using CIIPP in a Green City Context:

Vinh YenVice Chairman of Vinh Phucprovince, Vice Chairman of Vinh Yen City, and Vice Chair of DPI chaired a meeting in which tool was used.

Different agencies proposed 10 projects. Top 3 prioritized projects:

– Dredging of Dam Vac Lake

– Solid waste treatment for the City

– Reserve and Development of greenery in Vinh Yen city (street trees)

Vinh Yen CIIPP: Conclusions

• In-sight into the financial capacity of the city and the

internal financial mechanism between City within province

• In-sight into key aspects of proposed projects (social,

environmental, economic, feasible, and objectives)

• City wide participation in project prioritization reducing “pet

project risk”

• Save transaction cost, speed up project implementation

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• 21 organizations in the region trained to use the

tool

• Tool adapted to country

contexts (China, India, Indonesia, Philippines, Vietnam, Sri Lanka)

• Tool used in over 50 cities

• In 20 cities this lead to further Pre-Feasibility

Study work

Rolling out the tool

Valenzuela, Philippines

Xinyu, China

Rolling out the tool

Shimla, IndiaRajkot, India

Biratnagar, Nepal Hung Yen, Vietnam

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Joris van EttenJoris van EttenJoris van EttenJoris van EttenDeputy Program Coordinator CDIA

Joris.van-etten@giz.de