‘Resources of US$ 800 billion for cities exist, we want funds’, says Paes at the G20

The mayor of Rio de Janeiro, Eduardo Paes, said this Sunday that the resources requested by cities from G20 leaders – US$800 billion public per year with a focus on climate actions – exist, and that the proposal from the group of municipal rulers mainly says about the creation of a guarantee fund to accelerate the arrival of money at the end.

“The resources actually already exist. What we delivered, very concretely, was the proposal to create a guarantee fund that makes it easier for these resources to reach local governments”. He spoke to journalists alongside the mayor of Phoenix (USA), Kate Gallego, and the mayor of Freetown, the capital of Sierra Leone, Aki Sawyerr.

Paes said that this is not a letter with recommendations, but a “more objective model”, which uses the resources of multilateral banks, such as the World Bank, Inter-American Development Bank (IDB), Andean Development Corporation (CAF) and Banco of the Brics (NDB), under the guarantee of the aforementioned fund so that they have a better chance of reaching the municipal level.

“The big challenge is how to take these resources and get them to the municipalities, as they always need guarantees from central governments. The modeling we present allows these resources to overcome this obstacle,” said Paes.

He suggests the exclusion of resources from national accounts and their non-implication in city hall metrics and debt.

“Today, in the example of Rio, when the Brazilian government needs to authorize the debt that I may eventually obtain from an international institution, this goes into Brazil’s national accounts. As the federal government will be the guarantor, this is on its balance sheet. The fund we propose eliminates this step, and the Brazilian government does not need to include it in its accounts”, he says.

According to Paes, “it is clear” that the financial institution lending the resources will observe the financial circumstances of the city halls to find out whether it will be reimbursed. But the new format “makes it much more flexible” by taking into account only municipal accounts and no longer national accounts. “It’s my balance sheet and not the federal government’s balance sheet (which will weigh in). That’s it”, said the mayor of Rio.