Financial Institution's Insight
Bank Pembangunan Malaysia Berhad - Your Smart City Financing Partner Smart city development – where sustainability and liveability of cities provide vast ESG investment opportunities
The concept of “smart” ci�es had already emerged way back in the 1970s, when Los Angeles created its first urban big data project: “A Cluster Analysis of Los Angeles”. Therea�er, the smart city concept in urban planning gained wider awareness and trac�on in various ini�a�ves across the globe. Barcelona’s smart city brand become a reference for all other ci�es seeking to redirect their economies, par�cularly a�er the city government started the Smart City Expo and World Congress in 2011 – the most important global annual event for smart city development. The United Na�ons (“UN”) however, only launched the Sustainable Development Goals (“SDG”) in 2015. That blueprint might have reinforced collec�ve ac�on by member countries to adopt a more holis�c approach in managing and developing smart ci�es as the urbaniza�on pace con�nues to accelerate at unprecedented speed and scale. Urbaniza�on has always been associated with environmental degrada�on and social ills. While technology-driven solu�ons have helped address some of the urban woes in earlier smart ci�es around the world, the new narra�ve on smart city development drawn from the objec�ves set under the 17 SDG targets, is to focus on sustainability and liveability of ci�es. The As is the case for many parts of the world, funding for smart ci�es is the main challenge faced by stakeholders, i.e. local governments. As the na�on’s development bank, BPMB is commi�ed to its role in bridging the funding gap to achieve our na�onal development aspira�ons. BPMB strives to make sustainable financing more accessible to
structural changes brought about by the pandemic, par�cularly resource constraints and con�nued urban growth are making a new case for investment in smart city development across the globe more per�nent than ever. A smart city development opens up various investment opportuni�es – not only the smart management of all that is vital in urban planning, enabled by technological advancement – traffic, buildings, public transporta�on, sewerage, waste management etc. - but also the reduced carbon footprint i.e. green solu�ons a�ached to each and every urban living requirement. The Internet of Things (“IoT”) and Ar�ficial Intelligence (“AI”) have become cri�cal infrastructure behind most smart ci�es technology. This includes smart real-�me data tracking of energy demand changes, pollu�on, transporta�on, public security and ci�zen services for faster response and lower cost solu�ons by the authori�es. 5G connec�vity will inevitably be the key technology enabler of smart city development. While the commercial roll-out of 5G technology in Malaysia can only be expected by 2023, various case studies worldwide have shown companies that posi�oned themselves much earlier stood to gain, and had be�er access to new opportuni�es of 5G use cases in industry or government-led smart city development projects.
companies contribu�ng to the crea�on of smart ci�es, which not only will have huge mul�plier effects trickling through the economy, but also fulfil environmental, social and governance (“ESG”) aspects of future urban development.
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| Malaysia Smart City Outlook 2021 - 2022
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