Introduction > Develop Project Plan > Assess Feasibility > Identify and Select Finance Source/Instrument > Mitigate Risks > Secure Permits and Approvals > Seek Project Funding/Finance > Structure and Close Financing > Case Studies > Acknowledgements
Step 7: Structure and Close Financing
After the project has successfully sought financing from one or more financial instruments, the final step of the Framework is to structure and close financing. Structuring financing may involve combining multiple financial instruments (as identified in Step 3) to meet the finance needs of the project. Closing occurs when the financial instruments have been awarded and the funds are transferred to the project and/or when negotiations with public-private partnerships are concluded and officially documented. This step may also involve developing and implementing a plan for measuring and reporting results, depending on the requirements of the financial instruments.
This step of the Framework is critical because it finalizes the financial structuring and secures the necessary commitments to advance the project, ensuring its sustainability. The structured approach ensures the project is well-prepared for successful financing and execution. This process generally takes anywhere between three and nine months. This timeline and related structuring costs depend on the chosen mechanism(s) and the number of partners (public and private) required for negotiation.
Best Practice Activities for this Step
Structure financing
Structure financing, which involves strategically combining multiple financial instruments to finance organic waste management projects. Key considerations in structuring financing include project size, limitations of financial instruments, and risk mitigation. Organic waste management projects often use two to four funding sources, with capital-intensive upfront costs often met through a blend of grants, private equity, and/or owner equity, while operational expenses are covered by revenues supplemented by other sources, according to the World Bank Sustainable Financing and Policy models for Municipal Composting.
Close financing
Undertake the financial closing process, which is the final step before you begin project execution. Closing a project’s financing is achieved when funds are transferred to the project and/or when negotiations with public-private partnerships are concluded and officially documented.
Develop and implement a plan for measuring and reporting results
Develop a plan for measurement, reporting, and verification (MRV) of emissions and emissions reductions. This plan should measure and track the project’s verifiable emission reductions. A well-designed MRV plan not only enhances transparency and credibility but also enables ongoing monitoring and reporting, ensuring the project’s continued viability. This type of plan may be required as part of certain financial instruments, such as grants specifically aimed at achieving emission reductions. However, even if the plan is not required by a funder, conducting MRV of the project is still a best practice that will allow you to communicate the emissions benefits of the project to stakeholders.
Key Tools/Resources Related to this Step
Handbook on Urban Infrastructure Finance
New Cities Foundation
2016. This Handbook summarizes the types of infrastructure financing instruments available for cities.
Municipal Finances: A Handbook for Local Governments
The World Bank and the Climate and Clean Air Coalition
2014. This Handbook helps local governments improve the strategic management of municipal finances and includes examples of composting project finance structures.
MRV 101: Understanding Measurement, Reporting, and Verification of Climate Change Mitigation
The World Resources Institute
2016. This brief discusses the importance of MRV to track and monitor results achieved and assess the impacts made by the support received.
Policy Maker’s Handbook for Measurement, Reporting, and Verification in the Biogas Sector
Global Methane Initiative
2022. This Handbook, developed by GMI, discusses the best practices for MRV of emissions and emission reductions for biogas projects.
Guidance Pack: Private Sector Participation in Municipal Solid Waste Management
The World Bank
2000. This work is a comprehensive resource that provides a framework and tools to assist local authorities in considering private sector engagement for municipal solid waste services.
Private Sector Involvement in Solid Waste Management: Avoiding Problems and Building on Successes
The Collaborative Working Group on Solid Waste Management in Low- and Middle-income Countries
No Date. The publication presents a study of experiences of private sector participation in solid waste management in Africa, Asia, and Latin America.