Financing Sustainable Cities in Southeast Asia

Countries around the world are rapidly urbanising. The global population living in cities has more than doubled over the last 40 years and is projected to reach 55% by 2050. Financing sustainable urban development has never been more important, but traditional funding and financing mechanisms are proving inadequate to meet growing demand. Drawing on the 2023 OECD-G20 report Financing Cities of Tomorrow, this report aims to improve understandings of how sustainable urban development is funded and financed in the rapidly urbanising ASEAN-5 countries of Southeast Asia (Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam). This report identifies ongoing challenges and emerging opportunities through analysis of 129 sustainable urban development projects (both public and private) across four sectors (integrated urban development; urban transport; water, wastewater and waste management; and buildings), and a desk-based review of institutional and legal frameworks. Key findings and future policy directions focus on (i) creating financial, regulatory, and institutional conditions to maximise private investment, (ii) diversifying funding sources and financing instruments, and (iii) refining and integrating planning and legal systems to guide private investment towards urban sustainability.