Exploring the challenges and solutions for financing urban infrastructure projects in municipalities: A case study of the Tehran Municipality

Dehghanpour-Farashah, Afsaneh; Mofid, Farbod; Babaei, Sahar

doi:10.22034/uep.2026.567087.1817

Exploring the challenges and solutions for financing urban infrastructure projects in municipalities: A case study of the Tehran Municipality

Document Type : Original Article

Authors

Afsaneh Dehghanpour-Farashah ¹

Farbod Mofid ²

Sahar Babaei ¹

¹ Faculty of Governance, College of Management, University of Tehran, Tehran, Iran

² School of Management, University of Tehran, Tehran, Iran

10.22034/uep.2026.567087.1817

Abstract

Financing urban infrastructure projects, as a fundamental responsibility of urban governance, has consistently encountered various structural, revenue, and operational challenges. This is particularly evident in metropolises such as Tehran, where the scale and diversity of projects are vast, and infrastructural needs are constantly escalating. The primary objective of this research is to identify and analyze the core challenges of financing urban infrastructure projects in the Tehran Municipality and to propose appropriate solutions to address these obstacles. This study was conducted by applying a qualitative approach and thematic analysis methodology. To collect data, 14 semi-structured interviews were conducted with urban management experts, which were subsequently analyzed using thematic coding. Based on the findings, 16 main themes were extracted, comprising 7 main themes in the challenges section and 9 main themes in the solutions section. The extracted themes regarding challenges include “diminished credibility and trust,” “operational and bureaucratic challenges,” “revenue challenges,” “financial reliance on the central government,” “inability to attract investment,” “legal and structural challenges,” and “inefficient expenditure management.” Furthermore, the main themes identified for solutions encompass “structural reforms and bureaucracy reduction,” “reforming core revenue sources,” “decentralization,” “enhancing transparency and trust,” “incentivizing domestic and international investors,” “facilitating private sector participation,” “innovating financing instruments,” “strengthening sustainable revenue sources,” and “diversifying financial resources to reduce reliance on the central government.” The results of this research can assist urban policymakers in designing sustainable and efficient financial models tailored to the specific characteristics of urban infrastructure projects in the Tehran Municipality, thereby paving the way for the more effective implementation of urban infrastructure projects.

Keywords

financing challenges

financing urban infrastructure projects

public-private partnership (PPP)

sustainable revenue sources

Tehran Municipality

urban governance

Subjects

Urban Economy

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