ADB: Low creditworthiness of municipalities remains major obstacle to affordable housing provision

Solving the housing problem is not possible without strengthening the creditworthiness of municipal authorities, Shrinivas Sampat, Director of the Urban Development Division of the ADB, said during the panel discussion titled "From Global Housing Finance to Local Affordable Housing Action: Leveraging Global Development and Sub-National Finance," organized within the framework of the 13th session of the World Urban Forum (WUF13) held in Baku, according to Report.

"The main structural barrier to the development of affordable housing is still the insufficient creditworthiness of city administrations," he emphasized.

Sampat noted that municipal budgets are excessively burdened with obligations, and the vast majority of them are dependent on inter-budgetary transfers, which significantly limits their financial capabilities.

The ADB representative addressed international financial institutions and multilateral development banks, calling on them to jointly support the strengthening of municipalities' financial base, as well as to make more active use of philanthropic capital, primarily to compensate for initial losses on projects.

In his view, this will make it possible to form a portfolio of investment-attractive projects and attract private capital to housing infrastructure.