TheCityFix Labs México’s Third Workshop Helps Project Teams Identify Financial Models
On September 3rd, WRI México carried out the third financial workshop of TheCityFix Labs México. This workshop, held in Guanajuato, Mexico, focused on supporting the seven project teams to develop their sustainable infrastructure projects. TheCityFix Labs is an initiative of WRI Ross Center for Sustainable Cities, with support from the Citi Foundation, designed to help cities prepare, finance and implement sustainable urban projects.
This workshop focused on cost estimation, financial modeling and evaluating approaches to close financing gaps. Experts highlighted the importance of building “financially sustainable projects,” meaning that in addition to public funding, projects will likely need further financial sources to be considered “bankable.” These financing sources could be project revenues, concessionary financing or private debt capital. While some projects may obtain funding from their local governments, this modeling exercise revealed that many may still have a financing gap in the absence of additional financing sources.
The workshop helped the participants through a hands-on exercise for estimating costs and provided guidance in preparing a financial model for their projects.
“This exercise helps participants realize the opportunities and potential risks of considering one financing model rather than another. It also helps them identify and quantify elements of their projects that they weren’t aware of, details that could threaten their financial model and its long-term sustainability,” said Gabriela Morales, Manager of Water Management and Urban Resilience at WRI México and project manager of TheCityFix Labs México.
The project teams were tasked with considering and analyzing additional variables that could impact bankability and to run their financial models based on revised assumptions before the next workshop.
Immediately after the workshop, representatives from the Ministry of Environment of Guanajuato, who is sponsoring the Schools for Climate project, received additional technical assistance on the specific financing barriers they are facing.
The next workshop will be held in October 2019 in Hermosillo, Sonora State, Mexico.