Impact Investment Portfolio for Local Governments (within Future Cities of SEE Project) (North Macedonia, Skopje)
Overview
Cities have to fund complex challenges, from climate change and pollution to balancing the needs of citizens and businesses, with limited resources. Through Future Cities of South East Europe, SmartUp worked with the City of Skopje to build an impact investment portfolio: a prioritised set of projects the City can pursue as an impact investor.
We carried out the process with the City, from agreeing the criteria to evaluating the projects, prioritising them and giving detailed feedback. The approach is documented in a guide to impact investing for local government, so other municipalities can replicate it.
The challenge
Funding complex city challenges
Cities face problems such as climate change and pollution while balancing the needs of citizens and businesses, and must use limited resources strategically.
No model for municipalities as impact investors
Municipalities have the potential to become influential impact investors, but few practical models exist for them to follow.
Comparing many projects fairly
Around 60 projects needed to be assessed on the same terms, covering impact, strategic fit, funding, return and risk.
Activities and methods
We delivered the portfolio together with the City in three phases, combining research, co-creation workshops and a practical decision-making tool.
- Preparatory phase. We analysed the current city context, defined the focus areas and prepared a baseline report and templates for participants to develop the portfolio.
- Research phase. We developed scenarios for different city futures, conducted interviews and assessed the progress of existing strategies and projects.
- Design phase. We ran a series of workshops with representatives of the City, public enterprises, and the business and civic sectors, producing the impact investment portfolio.
Across the three phases, we worked with the City to:
- select the criteria for assessing impact investments
- evaluate all of the projects against those criteria
- prioritise the projects into the portfolio
- provide detailed feedback on the evaluated projects
Impact and learning
A prioritised portfolio. Around 60 projects were evaluated for their impact potential and structured into an impact investment portfolio for the City of Skopje.
A tool the City can reuse. A quantitative impact investment tool scores each investment on its description, funding, strategic fit, impact, return, investor capacity and risk, so that decisions look beyond financial return to sustainability and ethics.
A guide for other municipalities. The approach is documented in a guide to impact investing for local government, so that the process can be replicated in other municipalities. We promoted it through a webinar.
Planning similar work?
SmartUp can support research, co-creation, facilitation, digital tools, implementation, or learning documentation for related programmes.