Catalyzing Environmental Finance for Low-Carbon Urban Development (URBAN LED)

According to the UN-Habitat report of United Nations Human Settlements Program, two-thirds of global population is expected to be living in cities by 2030 making cities producing as much as 80 per cent of global GDP. Inclusive and sustainable urbanization gives opportunity for achieving both economic growth and decrease of green house gase emissions due to the development of infrastructure and reduction of negative impacts of citicie on environmental pollution. According to some estimations, implementation of LCUD concept could result with reducing of the annual greenhouse gas (GHG) emissions by 3.7 Gt CO2e by 2030.

Widespread industrialization influenced the most dynamical socio-economic development of the Bosnia and Herzegovina (BiH)  that has been resulting with rapid and unsupervised urbanization of the country and inability to preform planned investments in residential buildings, communal and public infrastructure. Due to the concentration of work places and migration of population, there is a rapid growth of urban population within the Country. Such trend makes introduction of low-carbon urban development concept as an efficient instrument for reduction of carbon footpring and other negatie influences on environment, thereby making cities as safer, cleaner and healthier places for living.

What we do?

The objective of the URBAN LED project is to leverage investment for transformational shift towards low-carbon urban development in Bosnia and Herzegovina thereby promoting safer, cleaner, and healthier cities and reducing urban GHG emissions.

The Project will facilitate investment in technically and economically feasible low-carbon solutions in key urban sectors, and then promote their wider uptake by municipalities and the private sector via dedicated financial mechanism and funding windows established within the environmental finance frameworks in BiH, as well as by accelerating implementation of a favourable policy and regulatory framework at the entity and national levels.

The Project will facilitate the transformation of the market for low-carbon urban solutions by creating and expanding opportunities for businesses such as ESCOs and waste management companies to get involved in the provision of low-carbon services and products in cities.

Project contributes to:

  • Strengthening the capacities of the Environmental Protection Fund of the Federation of Bosnia and Herzegovina and the Fund for Environmental Protection and Energy Efficiency of Republika Srpska forsSustainable financing of environmental protection projects from their own resources.
  • Development of ESCO financing mechanism for LCUD projects which will increase the engagement of local small and medium enterprises in this field as well as capacities of local communities.
  • Realization of direct investment in LCUD whic will result with reduction of green house gas emissions for 10,000 tCO2/y or more than 210,000 tCO2 over investment period.
  • Establishment and implementation of financing mechanism for low-carbon urban development which will result with significant reduction of indirect green house gas emissions 10 years after the project completion (more than 1 milion of tCO2
  • Creating the environment for the implementation of policies in field of environment and energy efficiency in BiH.
  • Creating the legislative framework for the harmonization of the environmental market in BiH.

Project components:

  • Innovative Financing Mechanism for Implementation of Low-Carbon Urban Development Concept (LCUD)- Regulations for polluter pays principle developed; Define the process and criteria for the financial mechanism for LCUD; Provide training to EFs’, relevant ministries staff and private sector for implementation of  ESCO-support mechanism and innovative financial mechanisms for LCUD; Develop contracts, and internal and external regulatory documents related to repayment of EFs for works and services; Develop monitoring and verification procedures and systems to clearly establish costs savings resulting from the implementation of low-carbon projects in selected municipalities.
  • Low-carbon public facilities and utilities- Apply EMIS in municipal utilities and Organization of training on EMIS application and its use for project identification; Identification, preparation and implementation of LCUD investments.
  • Low-carbon waste management- Develop the Solid Waste and Recycling Database Management System; Provide training and operational support for MRV implementation; Revision of the waste fee system to introduce weight- or volume-based fees as economic incentives to promote recycling; Design and pilot municipal green logistic schemes for waste recycling.
  • National and sector policies, institutional coordination and awareness raising on LCUD- Harmonization of rules and regulations, and institutional coordination within the environmental sector across environmental authorities in BiH and conducting a national awareness-raising campaign on LCUD.

Expected Project Outcomes:

  • Analysis of relevant legislative frameworks for introducing polluter pays principle conducted
  • ESCO financial mechanisms introduced in FBiH and RS
  • At least 40 staff of relevant institutions gaining first-hand experience (through trainings) on innovative finance options for LCUD and at least 100 representatives of relevant SMEs informed about the ESCO-support mechanism
  • Contractual and implementation arrangements for repayment mechanism established
  • Measurement, Reporting and Verification (MRV) for implementation of ESCO-support mechanism established
  • EMIS expanded to cover all types of public facilities and resources use in public utilities (1,500 buildings)
  • Municipal staff trained and equipped to apply EMIS (1,500 end-users trained)
  • 45 ESCO LCUD investment projects in public facilities and utilities implemented
  • SECAPs (Sustainable Energy and Climate Action Plans) for 15 municipalities in BIH developed
  • Waste management information systems in FBiH and RS developed
  • Trainings for users of the waste management information systems in FBiH and RS provided
  • Recommendations for reforms in systems for payment to the municipal solid waste disposal in FBiH and RS developed
  • Feasibility studies for environmentally friendly transportation and waste management for selected municipalities in BiH prepared
  • Green logistic scheme for municipal waste recycling designed and piloted in selected municipalities in BiH
  • Harmonized environmental related rules and regulations developed and enacted across BiH
  • National awareness–raising campaign conducted reaching out to at least 750,000 urban citizens



Start date:


Estimated end date:


Focus Area:

Energy and Environment


Global Environment Facility


Ministry of Foreign Trade and Economic Relations of Bosnia and Herzegovina, ministry of Spatial Planning,  Civil Engineering and Ecology of Republika Srpska. Federal Ministry of Environment and Tourism, Environmental Fund of Federation of BiH, Environmental Protection and Energy Efficiency Fund of Republika Srpska


Sustainable Development Goals targeted by URBAN LED



Project start date:

September 2017

Estimated end date:

December 2022

Focus area:

  • accelerate structural transformations
  • Project office:

    UNDP in Bosnia and Herzegovina

    Implementing partner:

    United Nations Development Programme

    Full project information  

    Funding Support by

    Donor name

  • Government Of Bosnia And Herzegovina
  • Global Environment Fund Truste
  • Amount contributed


    Delivery in previous fiscal year

    2021 $99,206

    2020 $450,627

    2019 $226,884

    2018 $158,009

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