Smart Cities Funding Models

Smart Cities Funding Models

Bridging the Funding Gap of the Next Trillion-dollar Market

RELEASE DATE
05-Jul-2017
REGION
North America
Deliverable Type
Megatrends
Research Code: K151-01-00-00-00
SKU: CI00259-NA-MT_20330
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Description

Smart Cities are cities built on ‘Smart’ and ‘Intelligent’ solutions and technology which will lead to the adoption of at least 5 of the 8 following smart parameters: smart energy, smart building, smart mobility, smart healthcare, smart infrastructure, smart technology, smart governance and smart education, and smart citizen. The Smart Cities market is set to grow from just over $900 billion in 2016 to $1.57 trillion in 2020. Public and private stakeholders are preparing for the Smart Cities disruption with key strategies to build and transform cities into seamless ecosystems. Cities are always looking toward increasing capacity and efficiency of functioning in order to attract economic growth and activity. In order to build highly functional and intelligent cities, public authorities will need to integrate smart technology into existing infrastructure while building new infrastructure from ground up.

Infrastructure building has always been dependent on financing mechanisms used to support construction, operation, and maintenance. Several financing mechanisms have been made available to stakeholders depending on risk appetite, investment size, and duration of financing. It is imperative that stakeholders understand the nuances, advantages, and shortfalls of each mechanism before choosing a tool to finance projects under their purview.

The research service analyzes and profiles each mechanism to understand the key aspects and best use cases to ensure stakeholders are kept informed and have a holistic view of the infrastructure and Smart City financing market. Coverage also includes a comprehensive scoring and feature comparison which can be used to select the most appropriate funding mechanism. The base year considered for the study is 2016.

Key Target Audience

The key target audience includes:
•     Public sector organizations
•     Wealth funds
•     Banking and lending sector
•     Industrial credit sector
•     Smart product manufacturers
•     Smart city integrators
•     Foreign Investors

Research Scope
•     Definition of Smart Cities
•     Overview of all funding mechanisms
•     Government-based financing
•     Institutional funding
•     Revenue-based funding
•     Scoring of funding mechanisms
•     Suitability of funding mechanisms

Key Questions this Study will Answer
•     What are the mechanisms being used currently to fund infrastructure projects?
•     What are the ways public or private entities can monetize infrastructure?
•     What are the features of funding mechanisms available for Smart City projects today?
•     What are some examples of successful funding of infrastructure projects?
•     What are the risks associated with each funding mechanism?
•     What is the best fit for an infrastructure project based on risk appetite, funding duration, and stage of project?

RESEARCH: INFOGRAPHIC

This infographic presents a brief overview of the research, and highlights the key topics discussed in it.
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Table of Contents

Sources of Funding

Cash and Securities Flow during Project Finance

Financing Mechanism Suitability

Financing Schedule for Infrastructure

Risk to Reward Map of Funding Mechanisms

Research Scope

Research Background

Definition of Smart Cities

Global Infrastructure Investment Trends

Revenue Attributed to Smart City Solutions

Types of Smart City Operating Models

Global Smart City Market

Global Smart City Market—Detailed Breakdown

Sources of Funding

Government Financing

Institutional Funding

Revenue-based Financing

Government Financing—Center Allocation

Government Financing—Debt Funding

Government Financing—SWF and Pension Funds

Government Financing—Land Monetization

Institutional Funding—Public-Private Partnership

Institutional Funding—Securitization or Structured Finance

Institutional Funding—International Grants

Revenue Based—User Fees

Revenue Based—Tap Fees

Revenue Based—Linkage Fees or Impact Fees

Revenue Based—Pay for Performance

Case Study: India—Government Financing

Case Study—Securitization: Tamil Nadu Urban Development Fund

Case Study—China: Land Monetization

Case Study—Amsterdam: Public-Private Partnership

Case Study—Sovereign Wealth Fund Investment Diversification

Case Study—SWF Pension Fund: Global Strategic Investment Alliance

Case Study—Grants: European Investment Bank (EIB)

Case Studies: Revenue-based Financing

Smart City Funding Score Matrix—Identifying Top Funding Channels

Financing Mechanism Suitability

Financing Schedule for Infrastructure

Risk to Reward Map of Funding Mechanisms

Cash and Securities Flow during Project Finance

The Last Word

Global Smart Cities in 2025

Legal Disclaimer

List of Figures
  • 1. Smart City Market: Business Model, Global, 2012–2025
  • 2. Land Monetization Projects, China, 1992-2003
  • 3. Smart City Market: Funding Mechanism Overview, Amsterdam, 2013
  • 4. Smart Cities, Global, 2025
List of Charts
  • 1. Population, Urban Population, and Temperature Growth; Global; 2006, 2013, & 2030
  • 2. Smart City Market: Percent of Respondents Indicating Revenue Band for their Organization’s Smart City Solutions, Global, 2015 and 2016
  • 3. Smart City Market: Percent of Respondents Indicating Revenue Band for their Organization’s Smart City Solutions, Global, 2016
  • 4. Smart City Market: Percent of Respondents Indicating Projected Revenue Growth Rates for their Organization’s Smart City Solutions, Global, 2016
  • 5. Smart City Market Revenue: Global, 2016-2020
  • 6. Smart City Market: Detailed Breakdown by Segment, Global, 2020
Smart Cities are cities built on ‘Smart’ and ‘Intelligent’ solutions and technology which will lead to the adoption of at least 5 of the 8 following smart parameters: smart energy, smart building, smart mobility, smart healthcare, smart infrastructure, smart technology, smart governance and smart education, and smart citizen. The Smart Cities market is set to grow from just over $900 billion in 2016 to $1.57 trillion in 2020. Public and private stakeholders are preparing for the Smart Cities disruption with key strategies to build and transform cities into seamless ecosystems. Cities are always looking toward increasing capacity and efficiency of functioning in order to attract economic growth and activity. In order to build highly functional and intelligent cities, public authorities will need to integrate smart technology into existing infrastructure while building new infrastructure from ground up. Infrastructure building has always been dependent on financing mechanisms used to support construction, operation, and maintenance. Several financing mechanisms have been made available to stakeholders depending on risk appetite, investment size, and duration of financing. It is imperative that stakeholders understand the nuances, advantages, and shortfalls of each mechanism before choosing a tool to finance projects under their purview. The research service analyzes and profiles each mechanism to understand the key aspects and best use cases to ensure stakeholders are kept informed and have a holistic view of the infrastructure and Smart City financing market. Coverage also includes a comprehensive scoring and feature comparison which can be used to select the most appropriate funding mechanism. The base year considered for the study is 2016. Key Target Audience The key target audience includes: • Public sector organizations • Wealth funds • Banking and lending sector • Industrial credit sector • Smart product manufacturers • Smart city integrators • Foreign Inve
More Information
Deliverable Type Megatrends
No Index No
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Table of Contents | Executive Summary~ || Sources of Funding~ || Cash and Securities Flow during Project Finance~ || Financing Mechanism Suitability~ || Financing Schedule for Infrastructure~ || Risk to Reward Map of Funding Mechanisms~ | Research Scope, Objectives, and Methodology~ || Research Scope~ || Research Background~ | Introduction and Definition of Smart Cities~ || Definition of Smart Cities~ || Global Infrastructure Investment Trends~ || Revenue Attributed to Smart City Solutions~ || Types of Smart City Operating Models~ || Global Smart City Market~ || Global Smart City Market—Detailed Breakdown~ | Funding Mechanisms~ || Sources of Funding~ || Government Financing~ || Institutional Funding~ || Revenue-based Financing~ | Government Financing~ || Government Financing—Center Allocation~ || Government Financing—Debt Funding~ || Government Financing—SWF and Pension Funds~ || Government Financing—Land Monetization~ | Institutional Funding~ || Institutional Funding—Public-Private Partnership~ || Institutional Funding—Securitization or Structured Finance~ || Institutional Funding—International Grants~ | Revenue Based~ || Revenue Based—User Fees~ || Revenue Based—Tap Fees~ || Revenue Based—Linkage Fees or Impact Fees~ || Revenue Based—Pay for Performance~ | Case Studies~ || Case Study: India—Government Financing~ || Case Study—Securitization: Tamil Nadu Urban Development Fund~ || Case Study—China: Land Monetization~ || Case Study—Amsterdam: Public-Private Partnership~ || Case Study—Sovereign Wealth Fund Investment Diversification~ || Case Study—SWF Pension Fund: Global Strategic Investment Alliance~ || Case Study—Grants: European Investment Bank (EIB)~ || Case Studies: Revenue-based Financing~ | Funding Mechanisms Scoring~ || Smart City Funding Score Matrix—Identifying Top Funding Channels~ || Financing Mechanism Suitability~ || Financing Schedule for Infrastructure~ || Risk to Reward Map of Funding Mechanisms~ || Cash and Securities Flow during Project Finance~ | The Last Word~ || The Last Word~ || Global Smart Cities in 2025~ || Legal Disclaimer~ | The Frost & Sullivan Story~
List of Charts and Figures 1. Smart City Market: Business Model, Global, 2012–2025~ 2. Land Monetization Projects, China, 1992-2003~ 3. Smart City Market: Funding Mechanism Overview, Amsterdam, 2013~ 4. Smart Cities, Global, 2025~| 1. Population, Urban Population, and Temperature Growth; Global; 2006, 2013, & 2030~ 2. Smart City Market: Percent of Respondents Indicating Revenue Band for their Organization’s Smart City Solutions, Global, 2015 and 2016~ 3. Smart City Market: Percent of Respondents Indicating Revenue Band for their Organization’s Smart City Solutions, Global, 2016~ 4. Smart City Market: Percent of Respondents Indicating Projected Revenue Growth Rates for their Organization’s Smart City Solutions, Global, 2016~ 5. Smart City Market Revenue: Global, 2016-2020~ 6. Smart City Market: Detailed Breakdown by Segment, Global, 2020~
Author Vijay Narayanan Natarajan
Industries Cross Industries
WIP Number K151-01-00-00-00
Is Prebook No