Scaling nature-based solutions requires moving beyond short-term project funding towards stable, diversified, and system-oriented financing models. Cities that successfully implement NBS treat them as long-term infrastructure investments, allocating resources not only for construction, but also for planning, modelling, coordination, maintenance, and performance monitoring.
Effective financing combines multiple sources—municipal budgets, utility funding, regulatory instruments, and external funding programmes—while clearly defining who pays for which function and at what scale.
Beyond capital investments, effective NBS implementation requires dedicated resources for enabling functions that ensure long-term performance and scalability. Cities must allocate funding for staff capacity, interdisciplinary coordination, and continuous training, as well as for research, data collection, and hydrological modelling that underpin evidence-based planning and design. Equally important is securing stable budgets for operation, maintenance, and monitoring, as NBS performance evolves over time and depends on proper upkeep and adaptive management. Without these supporting investments, even well-designed solutions risk underperforming, limiting their contribution to climate resilience and broader urban benefits.
How different cities fund their NBS?
-
Aarhus has developed a financing model that combines utility investments, municipal funding, and developer contributions to support the implementation of catchment-fit nature-based solutions (NBS). The model is built around a clear principle: NBS should be financed according to the benefits they deliver to different stakeholders.
A key enabler is the Danish framework allowing water utilities to invest in climate adaptation measures that qualify as Best Available Technologies (BAT). Aarhus Water relies on technical guidelines and proven solutions that demonstrate predictable long-term hydraulic performance and cost-effectiveness. When NBS contribute to stormwater management objectives, reduce peak flows, support sewer separation, or improve the performance of the drainage system, they can be financed by the utility in the same way as conventional grey infrastructure. This creates a stable financing mechanism for NBS that provide measurable stormwater management benefits.
However, many NBS deliver benefits that extend beyond stormwater management alone. Green streets, urban wetlands, rain gardens, and blue-green corridors often improve biodiversity, recreational opportunities, urban attractiveness, public health, and climate resilience. These additional benefits fall outside the utility’s mandate and are therefore financed by other actors.
To address this, Aarhus has developed a shared financing model in which the utility finances the hydraulic functions of NBS, while the municipality co-finances urban quality, landscape, biodiversity, and recreational functions through municipal budgets. In urban development projects, developers may also contribute where NBS form part of site development requirements or provide value to the project.
-
The main source of NBS funding for Tampere comes from collected stormwater fees. In addition to the funds available from the fee collection, Tampere actively seeks opportunities for gaining grants, fund blending and is working towards implementing public-private partnership models.
The stormwater fee is determined based on the intended use and area of the zoning unit as specified in the local detailed plan; for apartment buildings, the floor area of the buildings is also taken into account when determining the fees. The area of a zoning unit refers to the area of a plot or an undivided, parcel-shaped plot.
The stormwater fee is collected from the area served by the municipality’s stormwater system, which includes the areas covered by the local detailed plan. In addition to stormwater sewers, the stormwater system consists of culverts, open ditches, stormwater wells, and various stormwater management solutions such as depressions, detention basins, infiltration structures, flow control structures, wetlands, and filtration solutions. The municipal stormwater fee covers the costs incurred by the municipality for stormwater management.
The Committee for Urban Environment and Infrastructure decides on the criteria for determining the stormwater fee and its amount, which are updated as needed.
Five fee categories
The stormwater fee has five different fee categories. Fee category 1 covers single-family homes, fee category 2 covers row houses and terraced houses, fee category 3 covers service and administrative buildings, fee category 4 covers apartment buildings and loft buildings, and fee category 5 covers commercial and industrial buildings as well as parking areas.
Maximum amounts have been set for stormwater fees in the different fee categories to ensure that the fees do not become unreasonably high for properties. In the highest fee category (Category 5), property owners may apply for a reduction in the stormwater fee if the specified conditions specified are met. The detailed determination of the fee categories and the calculation formula for the stormwater fee are presented in the stormwater fee document.
It was not possible to take all the specific characteristics of properties into account in the criteria for determining the fee, as this would have made the fee too complex and billing costs would have risen unreasonably. The criteria for determining the fee were obtained from the municipal register.
Collection of the fee
The invoice is addressed to the property owner or the holder of a city-leased plot within the stormwater system area.
-
At present, implementation is carried out on a project-based basis. Funding can be integrated into the budget once key constraints and viable solutions have been identified. In such cases, resources for implementation can be systematically incorporated into the broader budget strategy.
However, with a project-based approach, financing for NBS operation, maintenance, and monitoring remains unclear, with no formal agreement on responsibilities or the extent of cost allocation between stakeholders. As a result, no dedicated financial mechanism or budget line has been established to cover these ongoing expenses.
This raises the question of introducing a stormwater fee, which has not yet been implemented. Clear delineation of responsibilities, identification of sustainable funding mechanisms, and the establishment of a dedicated budget line are therefore required to ensure long-term financial viability.