CG Meeting Reports - Frankfurt

Consultative Group Home PageFrankfurt Meeting Report
Informal Working Level Consultation on
Design of Governance and Organisational Structure
of the Cities Alliance
June 9, 1999
Eschborn, Germany



Welcome Message
In his welcoming remarks on behalf of the meeting hosts, Mr. Eisenblaetter expressed the need to bundle available resources in an equitable manner; he observed that urban development approaches are often complementary and that interests converge. The GTZ CEO stated that the Cities Alliance is a strategic new initiative that "needs enough resources to show it means business."

Introductory Remarks by the Co-Chairs
Mr. Konukiewitz stated that Germany and other donors want to be involved early on in the design process: 'We don't want to just join the train, but we want to be part of the engineering team.' This informal consultation was conceived for this purpose.

For the Alliance to be successful, it would require ownership by the donor community. Even though Germany was hosting the meeting, there were no implications of Germany taking a lead role; their wish was only to facilitate this process.

Mr. Konukiewitz advised the participants that the conclusions of the meeting would be put into a short report, to facilitate communications also with those who were unable to be present. He proposed, and the group accepted that the discussion be focused around four issue areas:

  1. Basic ideas / benefits / goals: What do we want to get out of the Alliance?
  2. Financial framework: Core activities and parallel funding required, relationship to implementation investments.
  3. Governance structure set-up and procedures: Which partners need to be involved and in which ways?
  4.  Next steps.

Mr. Hildebrand made a brief presentation of the Cities Alliance, its background, development and rationale, including the links with the two main objectives of the Habitat Agenda, the two new global campaigns of Habitat and the Bank's new Urban and Local Government Strategy.
He outlined four potential benefits of the Cities Alliance as a global partnership:

  1. improving the quality of urban development cooperation and urban lending;
  2. strengthening the impact of grant-funded urban development cooperation;
  3. expanding the level of resources reaching the urban poor, by increasing the coherence of effort of existing programs and sharpening the focus on scaling-up successful approaches; and
  4. providing a structured vehicle for advancing collective know-how.

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Participants suggested the following benefits of the Cities Alliance from several perspectives: 

  • Efficiency in administering urban development aid: Bilateral assistance is negotiated one-by-one with each city and national government, a process which often results in delays in resources reaching local beneficiaries. A multilateral effort could simplify the negotiation process involving all partners by helping to broker frameworks for resources to reach municipalities more readily.
  • Contributing to learning and innovation in scaling-up slum upgrading and to sharing and testing methodologies for City Development Strategies.
  • Progressing towards common definitions and strategies.
  • Possibilities for streamlining cross-sector and interregional programming within the Bank.
  • Improved donor coordination of urban investments within specific countries.
  • Mutual learning and knowledge sharing: The Cities Alliance was defined as "a learning alliance." Feedback and monitoring processes would be greatly beneficial.
  • More systematic realization of potentials for local investment.
  • Facilitating the role of local authorities, which are closest to the people and have considerable expertise in urban development, but do not have the financial resources or international experience. Cities have increased responsibilities but not necessarily increased means. WACLAC, in particular, felt that the Alliance could assist in overcoming these shortcomings.
  • Raising the profile of urban issues in the international development agenda.
  • Facilitating the dialogue on, and the exploration of policy issues among all stakeholders; this would lead to more informed and output-oriented policy decisions.
  • Providing impetus to bilateral partners to help them change their own approaches and the way they go about urban development cooperation, as well as share knowledge and approaches towards such change. The Alliance would also help all partners articulate together the increasing importance of urban development cooperation and contribute to the data required for this goal.
  • Strengthened linkages between policy dialogue, regulatory reforms and program implementation.

During the discussion of this item, the following issues were raised by the participants:

  • Relationship between Alliance and other multilateral programs, such as the UMP and MDP, and potential benefits coming from linkages with these other programs: It is useful to view the Alliance as a strategy rather than a program. There are many urban programs, each with their own objectives, constituencies and capacity that could potentially be used for implementing the Alliance strategy. The Alliance will try to capitalize on, and strengthen this existing competence rather than build separate implementation capacity. (A prototypical example of this process is the Bank's recent DGF grant to the UMP to expand its city consultation process into a City Development Strategy process.) It was also stressed that it is important to use existing urban multilateral and bilateral delivery systems without, however, individual programs losing their own identity. This should result in an improved coherence of effort among existing programs.
  • Linkages of the Alliance at the local level: There is a need for effective frameworks to facilitate working directly with local authorities.
  • Anticipated life span of the Alliance (limited time or on-going with benchmarking?): Reservations were voiced concerning a short-term timeframe and strong preference was expressed to have an initial phase with options for review, continuation and re-orientation. The UK representative suggested that the Cities Alliance as a strategy needed to avoid the risk of short term time horizons and frequent extensions by partners agreeing to a series of milestones to be achieved with benchmarks for review. The CA secretariat clarified that the initial Bank-Habitat commitment is three years, but the Cities Alliance strategy is long-term. Such long-term view may be needed to make this initiative into a learning one, while sharply focusing on and benchmarking anticipated results under its two key priorities for action.
  • Lessons learned: IULA suggested that the Cities Alliance needs to take into account lessons learned in decentralized cooperation as basis for its strategy and governance structure. For example, lessons suggest that two preconditions for success are: 1) strong decentralization policies and strategies at national level, and 2) legislative framework for municipal governments.
  • "Framework Issues":
    • Need to build local institutional capacity -- before decentralization, and as a basis for scaling up.
    • How to achieve ownership among local authorities?
    • How would cities approach the Cities Alliance? What would the process be?
    • How to replicate upgrading city-wide and nation-wide without displacing other municipal infrastructure lending?

In discussing these issues, it was emphasized that a goal of the Alliance should be to create a process for "learning and innovation," to help break away from the "traditional way of doing business" and to become a "learning alliance". Addressing some of these issues could be a key objective of the Alliance.

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(including work program, core activities)

  • Core activities of the Cities Alliance include City Development Strategies, and developing city-wide and nation-wide programs for the upgrading of low income neighborhoods to bring basic services to the urban poor on a here-to-fore unprecedented scale. A competitive city-selection process is envisaged. The implementation of the elements of a city strategy, or of upgrading programs, would occur downstream from this work supported by both local and external investments.
  • The goals of the Alliance are ambitious, but the proposed resources are very modest, particularly if compared to the annual contributions to other major global trust funds administered by World Bank, which range typically from $6 to $250 million per year.
  • With Bank resources and separate funding from Japan, pilot City Strategies are underway in more than 20 cities. (A CDS Conference will be held in Tokyo July 28-30, 1999, that will include reports on the 13 city strategies being financed under Japan grant; to be hosted by Japan Ministry of Construction, JICA and World Bank. Mr. Aoki encouraged all meeting participants to attend if they could.)
  • Seed funding has also been used to begin to develop programs for scaling-up slum upgrading activities which will focus on several countries in Africa, Asia and Latin America.
  • It is vital that a picture emerges within the Alliance of what each partner is doing related to city development strategies and urban upgrading programs. 

During the discussion of this item, the following issues were raised by the participants:

  • Parallel-financed activities – How would parallel financing be viewed? Can bilateral mechanisms be used to cover certain areas or products? Would the Alliance monitor and evaluate these parallel activities, and how? Could contributions to other programs be counted as a contribution to the Cities Alliance? How would the efforts be coordinated? To what extent would the Alliance secretariat be involved? The secretariat stressed that earmarked and parallel funding would be accepted, but a careful balance with core funds will have to be maintained. It was felt that, if only parallel funding is achieved, the Alliance would have no reason to exist. The extent to which the secretariat would coordinate and monitor parallel funded activities would depend on what the partners (consultative group) wanted, the level of resources available, and striking a balance with backstopping core-funded Cities Alliance activities.
  • Parallel financing of upgrading activities - Could work focus on different countries/regions other than the ones where work has already been initiated? Could partners focus resources (earmarked or parallel) on their own priority countries? Or on cities/countries facing certain types of problems (such as need for water supply infrastructure), certain political conditions, or other particular topics of interest? Expanding the list of countries to focus on the less developed economies targeted by specific donors would be welcome as long as the linkage can be made with investment follow-up for implementation. However, it would not be acceptable to narrowly focus at the outset on sectoral or topical themes in a City Development Strategy, as by definition these exercises should be holistic. Implementation investment strategies should provide ample scope to accommodate the interests of specific donors in supporting implementation through sectoral investments.
  •  Existing trust funds: An issue for several donors is the utilization of existing trust funds; slow disbursements or unbalanced cash-flow in trust funds can cause problems for donor agencies in mobilizing new resources.
  • The basic algorithm of core funding for the Cities Alliance Trust Fund: An approximate 50-50 split of the initial estimate of $ 21 million in core resources between CDS and upgrading. For CDS, the preliminary estimate had been $500,000 for each of 20 cities (CDS exercises were estimated to take from 6-12 months in each city). To develop city-wide/nation-wide upgrading programs, approximately $1 million was estimated per year for three years for Africa, Asia and LAC.
  • What is the critical funding mass? There is a need for sensible work plans, and enough contributors that if one partner needs to shift resources, it won't affect the Alliance. The more contributors there are, the more flexibility the Alliance will have.

The representative of the UK announced that his Government will contribute $1 million per year for the initial three years to the Cities Alliance.

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Under this item, the meeting discussed the profile, role and membership of the consultative group or executive committee; the opportunity to include other stakeholders through a policy advisory board, or technical expert group; and the relationship to other programs and agencies.

The main points discussed were:

  • The Cities Alliance should stick as close as possible to existing models, with a fairly low contribution of untied core resources required from donors to take part in the consultative group. The Alliance should also be open to all other types of contributions – in-kind, parallel, earmarked, etc.
  • Several donor partners suggested that the minimum core contribution required for membership in the consultative group should be $250,000 per year. (There is precedent for this amount in other global programs administered by the Bank, and the UK representative reported that this is the amount being considered for the PPIAF.)
  • In PPIAF, the steering group will apparently elect the technical advisory group, thereby helping to keep the composition of the advisory group strategic.
  • The consultative group meetings should be designed to enable partners to help each other solve problems, share knowledge and adopt new tools and approaches.
  • There should be general acceptance that the key goal for everyone sitting around the table is poverty reduction, and everyone wants to be demand-led. There should be some trust that the donor-partners feel it is absolutely necessary to get ground-level input in setting priorities. Representation is needed from cities in the governance structure of the Alliance and local government should not be considered as a client, but rather as a partner.
  • The Cities Alliance will need to help strengthen the networks of associations of local authorities, and their capacity-building efforts. There are lots of opportunities for mayors to meet together, but not so many for the managers of international associations of local authorities and their programs. The Alliance would benefit from getting local authorities associations in at operational level.
  • The representative of IULA felt that it is advisable to avoid having "donors" in a consultative group separated from "beneficiaries" in an advisory group, because the outcomes can be disappointing. An example was the former set-up of the MDP, which had separate steering group and technical advisory group. The donors drove the steering group, but it didn't work well because the technical group came in too late in process. If this approach is used, then there should be professional people on the technical group - not as beneficiaries, but as experts who know the field. Alternatively, have just one group with representation from both donors and experts.
  • There was consensus among the participants that local authorities should be full partners in the Alliance.
  • Whatever structure is devised, it is important to keep it small and simple so that the energy of secretariat will be focused on CDS and upgrading, rather than servicing the governance structure.

Since a number of questions remain under discussion regarding the composition and flexibility of participation in the consultative group, no decisions were made. However there did appear to be consensus for a governance structure modeled after PPIAF and CGAP, but with local authorities represented at the political level in the consultative group and with a small policy advisory board including the managers of the secretariats of key international local authority and city management associations.

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  1. Minutes of this meeting will be circulated to all participants and others who were not in attendance.
  2. A more detailed prospectus reflecting the ideas expressed at the present consultation will be prepared by the Secretariat and circulated, well in advance of the next meeting. The issues which remain unresolved will be identified with options.
  3. The next Cities Alliance consultation is being planned for early September in Brussels to be held immediately after the planned European Commission meeting in September. This meeting would consider the Alliance as a framework for the implementation of the shared elements of recent urban strategies and would try to achieve consensus on its governance and organizational structure. All prospective bilateral partners would be invited
  4. A Cities Alliance pledging conference presided over by the President of the Bank and the Executive Director of Habitat would then be held in October or November, possibly at the Europe office of World Bank in Paris. It will be essential before then to have an indication of the level of commitment so as to ensure a positive outcome.
  5. Mr. Hildebrand will be available for bilateral consultations as required in preparation of the above.

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All present indicated that they would support the Cities Alliance and work to make it happen by responding to the Next Steps in a positive way.

Thanks were extended to all present for a full and frank exchange of views, and to GTZ for the hospitality and BMZ for the joint facilitation.

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Bilateral partners


  • Roger Goudiard, Deputy-Director, Policy and Strategies Dept., AFD
  • Mr. Xavier Crepin, Chief Executive Manager, ISTED
  • Francois L. Amiot, AFD


  • Ernst Eisenblaetter, Chief Executive Officer, GTZ
  • Manfred Konukiewitz, Head of Infrastructure Division, BMZ
  • Nassir Djafari, Sector Economist, Sector Policy Dept., KfW
  • Gerd Sippel, Senior Advisor, Municipal and Urban Development, GTZ
  • Japan: Hitoshi Aoki, Director, International Codes & Standards, MOC
  • Netherlands: Bas van Noordenne, Division Head, Economic and Urban Development, MFA
  • United Kingdom: Michael Mutter, Head, Urban Planning and Advisory Group, DFID

(At the last moment the United States representative, Mr. David Painter of USAID, had to send his regrets. He sent message through Mr. Konukiewitz that USAID and the U.S. Government remain very interested in the Cities Alliance and will participate in future meetings.)

Local Authority partners

  • International Union of Local Authorities (IULA): Jacques Jobin, Director
  • World Associations of Cities and Local Authorities Coordination: Nada Abgallah, Executive Officer

Multi-lateral partners

  • UNCHS: Jochen Eigen, Ag. Head, Urban Secretariat, UNCHS (Habitat)
  • World Bank:
    • Angela Griffin, Sector Leader, Urban Development Division
    • Kevin Milroy, Administrative Officer, Urban Development Division

Cities Alliance

  • Mark Hildebrand, Manager

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