Cities face funding shortfall of over US$100 billion for climate projects in 2025

The world’s cities are seeking a record US$105 billion to finance urban climate infrastructure projects in 2025, but shortfalls in project preparation and funding risk leaving ambitions unfulfilled, according to a CDP Global Snapshot published as the COP30 Local Leaders Forum convenes in Rio de Janeiro.

According to the original report from CDP, prepared with the Global Covenant of Mayors for Climate & Energy (GCoM), 507 cities across 62 countries have disclosed 2,164 projects through CDP‑ICLEI Track so far in 2025. The total reported need jumped 22% from US$86 billion in 2024 to US$105 billion in 2025, with the largest number of projects concentrated in buildings and energy efficiency (420), green infrastructure (338) and transport (336).

The Snapshot highlights exemplar initiatives that illustrate the range of municipal action: Porto’s Transport Fleet Modernisation, targeting 43% electrification of its bus fleet by the end of 2027; Freetown’s Treetown programme, which has planted and tracked some 1.2 million trees; and Buenos Aires’ Community Distributed Generation scheme, aiming to capture 10% of the city’s solar potential, reach roughly 25,000 users and cut an estimated 217,000 tonnes of CO2 a year.

Yet the data tell a sobering story for investors and policymakers. CDP’s analysis shows 87% of projects are actively seeking finance and, of these, 49% have not secured any form of funding. Nearly half of all projects are at early scoping stages, and a much greater share of projects in emerging markets require full financing (40%) than in developed economies (22%). Only 7% of projects that reported a financing model said they were seeking funds exclusively from private sources.

Investment demand is also highly concentrated: developed economies account for 83% of the reported needs, driven primarily by the United States (44%) and the United Kingdom (23%), even though cities in emerging markets make up around 40% of the projects disclosed. Broader CDP analysis of nearly 5,000 projects disclosed between 2020 and 2024 shows nature‑based interventions , biodiversity, water resilience and urban green spaces , have grown fastest, rising from 7% of projects in 2020 to 15% in 2024.

The revealed funding requirement remains a fraction of the scale needed. Industry data shows cities require roughly US$4.5 trillion a year to meet mitigation and adaptation needs, while less than 10% of total global climate finance reaches local governments. CDP’s companion report, Protected Places, links this finance shortfall to low implementation rates: in India only 5% of planned city climate actions are fully implemented, compared with 75% in Japan and 86% in China; Latin America and Africa report 23% and 31% in operation, respectively.

CDP and GCoM are urging systemic changes to bridge the gap between municipal ambition and deliverable projects. Recommended measures include integrating urban investment needs into national strategies and Nationally Determined Contributions, expanding innovative blended and risk‑sharing instruments to attract private capital, strengthening multilevel governance and partnerships such as the Coalition for High Ambition Multilevel Partnerships (CHAMP), and boosting disclosure and project preparation capacity to build investor confidence.

Katie Walsh, CDP Head of City Climate Finance, said: “Cities, their people and businesses sit on the front line of climate change. Our latest Snapshot reveals both the size of their response and the glaring scale of the investment needed – now topping US$100 billion for the first time.

The financing tap for cities, especially in developing economies, must be fully opened to turn plans on paper into projects on the ground – creating jobs, fairer prosperity and healthier communities.

“By having a seat at the table in national planning processes, better access to global financing, and strengthening collaboration across government, cities can play their part in delivering Earth-positive results for businesses, people and the planet.”

Asma Jhina, Senior Advisor – Urban Climate Finance and Inclusive Action at GCoM, added: “The gulf between city climate ambition and critical finance remains stark, with global cities reporting a 22% increase in required funding compared with 2024, reaching over US$100 billion for the first time. The 2025 Snapshot highlights that almost half of the more than 2,000 projects disclosed are unfunded and shows worrying disparities of available finance between developed economies and emerging market and developing economies.

“Cities around the world are stepping up to tackle climate change but they cannot do it alone. Urgent access to critical funding is essential to deliver on their ambitious climate action plans.”

For industrial decarbonisation practitioners and investors, the Snapshot underscores two urgent priorities: scale project preparation to move schemes from scoping to bankability, and design blended finance instruments that reduce perceived risk for private capital while directing funding toward under‑served emerging market cities. Without these shifts, the report cautions, the growing pipeline of municipal projects will remain aspirations rather than assets that deliver emissions reductions, resilience and local economic returns.