Posted on May 30, 2014

Posted by: Kathy Vilnrotter, Senior Analyst, Technical Expertise

KathyV_WUFMedellin, Colombia was swarming with urbanists, sanitation experts, public health advocates, researchers, policy makers, and representatives from emerging markets.  They all came looking for something. Some came for ideas, some for recognition, others for funding, but no matter the reason there seemed to be a common question. ‘How can we finance it?’ While there was a plethora of ideas and a diverse set of urban circumstances to tackle, the common challenge seemed to be finding a successful financial model.

The difficulty when dealing with financing urban projects stems from the vast number of stakeholders and partners that need to be involved. Many development finance initiatives target a financial institution or other private sector actor (such as a telecom company, or a concrete supplier) to invest in an urban project.  The complexity of the urban condition requires many stakeholders to be on board (and on the same page!) in order to achieve successful interventions.  Stakeholders range from homeowners to public institutions, from the neighborhood bricklayer to the national government, and many in between. Not only is coordination tricky and time consuming, but making the business case for each partner that addresses each one’s specific incentives (which many times appear to be in conflict) poses a challenge. Because many of these obstacles stem from a disconnect between stakeholders and the urban community, there exists a great deal of opportunity in localizing the planning and financing of urban projects.

Project Concern International (PCI), a highly mission driven non-profit headquartered in San Diego, has tackled the complexity of this issue by developing the “Neighborhood Approach”.  The Approach focuses on a relatively small urban area and works with the community to comprehensively map where they are and where they would like to be. PCI then works with the necessary participants to develop an appropriate strategy.  The Office of U.S. Foreign Disaster Assistance (OFDA) supported the development of this model in Haiti after the earthquake, and its success prompted its pilot in a pre-disaster situation to test its viability in strengthening urban resilience.  The second pilot, aptly named Barrio Mio (meaning My Neighborhood – emphasizing the direct connection with the community members), is currently being implemented in Guatemala and is also experiencing success.

Enclude is currently collaborating with PCI to develop a financing component that will give this model the ability to scale to new regions. Like PCI, Enclude recognizes that community engagement leads to more sustainable solutions that that can remedy both immediate, local need and longer-term structural vulnerabilities, resulting in lasting development impact.

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