(De)Financing remunicipalisation

Cooperatives

The most local source of financing is arguably that of community-based cooperatives, many of which have been set up with the express intent of taking public/community control of a privatised service, occasionally in partnership with a government agency. Such cooperatives have been particularly active in Germany, notably in the electricity sector where the goal has also been to accelerate the transition to renewable energy.

In Berlin, for example, Citizen Energy Berlin (BürgerEnergie Berlin) was created to purchase a share of the privately operated electricity grid. Collaborating with a local utility from Southern Germany, Citizen Energy Berlin had 2300 members and a capital shareholding of €11m in September 2015 (Becker et al., 2017: 64). Hamburg had a similar cooperative (Energienetz Hamburg) with 3000 members and more than €50m in capital (Becker et al., 2017: 69). Although a long way from the €550m ultimately required to buy back the electricity grid in that city, it is nonetheless an impressive sum of money for a community organisation. Both efforts are also illustrative of the transformative ambitions of many such cooperative initiatives, with groups in Hamburg and Berlin advocating for radical new models of collective ownership, direct citizen participation in decision making and the decommodification of electricity through ecological sustainability and social justice (Becker et al., 2016, 2017). There are also cooperatively owned banks with similar ecological and social mandates, some of which have been (indirectly) involved in remunicipalisation efforts, such as Germany’s GLS co-op bank which awarded €600 million in loans for locally owned renewable energy projects in 2014 (Knaebel, 2016).

It is not known how many such cooperatives exist or how easy/difficult it is to raise the capital required for remunicipalisation, but the potential for local communities to generate financing for remunicipalisation clearly exists and would benefit from detailed comparative research. It is also important to flag the limitations of such a financing model in low-income countries and neighbourhoods, where mobilising capital for large remunicipalisation projects would be far more difficult (Lal, 2019).

Taxes and tariffs

For some municipalities, local taxes and tariffs represent the bulk of their revenue and offer a potential source of financing for the initial costs of remunicipalisation through price increases and tax hikes, particularly in larger and wealthier municipalities with networked services with regular revenue streams such as water and electricity (Aronson and Hilley, 2010; Gordon et al., 2020). Other user fees could also be tapped into, such as increases in gas taxes and congestion charges to support the remunicipalisation of public transportation systems (Whegmann, 2018).

At first glance this may seem an unlikely source of financing given that most remunicipalisations would appear to be done with the aim of lowering taxes and tariffs, notably in low-income neighbourhoods (Bel, 2020; Romano et al., 2023). Nevertheless, there are examples of tax increases being used to finance the transition back to public control. In Ojai, California, residents voted in favour of a temporary property tax increase that would be used to repay up to $60 million in bonds issued to finance a takeover of the municipality’s water system (which, once paid for, eventually resulted in a 65% decrease in water rates for residents) (Yang, 2022).

Municipalities could also introduce more progressive taxes and tariffs to finance remunicipalisation, with wealthier households and firms paying more per unit of consumption than their lower-income counterparts. There could be support for such initiatives from wealthier rate payers if it benefits them as well (e.g. improved health and productivity in the city as a whole). And given that higher-income residents tend to benefit disproportionately from public subsidies for local services there are strong equity arguments to be made for financing remunicipalisation through progressive user fees (Fleming, 2018; Strand and Mirkay, 2019). The fact that some municipalities have been forced to raise fees and taxes to sustain their operations after remunicipalisation (because they lacked other financing options) is another reason for a candid conversation on the matter (for a discussion of Atlanta’s ‘inevitable’ price increases after water remunicipalisation see Lobina (2019)).

There are structural concerns with such a financing strategy, however. The first is that remunicipalisation necessarily takes place in a single sector in a single location, making it difficult for localised tax and tariff reforms to achieve the kinds of overarching redistributional impacts that its supporters may hope for. Moreover, even minor changes to pricing and resource allocation can generate stiff resistance from private businesses anxious about competitors in other jurisdictions and wealthy ratepayers concerned with erosion of incomes and lifestyles. Fee and tariff changes in one service can also impact other sectors, with unintended knock-on effects that can worsen equity elsewhere. In the end, attempts to address financial inequities in a single sector via local tariffs, taxes and user fees may be a zero-sum game that pits municipalities and service departments against one another, potentially undermining the broader goals of a remunicipalisation effort.

It is also notoriously difficult to set taxes and tariffs that will adequately account for infrastructure costs over a long period of time (50–100 years in some cases), particularly in light of constantly changing technologies, environmental legislation and the unknown impacts of climate change. As a result, municipalities are unlikely to charge what is actually required to cover the long-term costs of an expensive remunicipalisation transition, notably for services that are (literarily and figuratively) buried out of sight and less likely to garner public support for increased fees, such as sewerage (Libey et al., 2020).

These limitations are made even more problematic by the almost universal introduction of corporatisation over the past 40 years. Governments have increasingly turned to the use of financially ringfenced public corporations to deliver services, contributing to the creation of commercialised public sector cultures and ideologies, with public utilities being run increasingly on market-oriented operating principles (Andrews et al., 2022; Brownlee et al., 2018). In Germany, Wagner and Berlo (2017; 404) found that 96% of newly established energy utilities employed some form of corporatisation. Not all corporatisations have been carried out with commercialisation in mind (McDonald, 2016a), but by their very nature corporatised agencies are compartmentalised silos, making it difficult to coordinate management and finance across departments, potentially undermining synergistic planning, resource use and economies of scale when remunicipalising a single service.

A fixation on agency-specific finances can also serve to intensify processes of commodification, with service users increasingly seen as ‘customers’ instead of ‘citizens’, with public amenities perceived as private commodities to be bought and sold on the market, dissociated from broader public goods and concealing the complex social and labour arrangements behind their exchange price (Clarke et al., 2007). In other words, even the most progressive forms of tax and tariff reform are unlikely to address the financing needs of deeper transformative types of remunicipalisation on their own and would need to be introduced alongside other financing mechanisms.

Municipal bonds

The multi-trillion-dollar global municipal bond market is another potential source of funding for remunicipalisation. Although historically conservative, municipal bonds have increasingly targeted social and environmental initiatives, with the latter being popular with investors looking to boost their green credentials (Karpf and Mandel, 2018; Saha and d’Almeida, 2017). They play a major role in financing infrastructure in some parts of the world, notably the United States, where, due to favourable tax-exempt status on interest earnings, municipalities were able to issue US$38 billion in municipal bonds to pay for water and sanitation infrastructure projects in 2016 alone (AMWA and NACWA, 2016).

There are also indications that investors are willing to buy bonds specifically targeted at remunicipalisation, illustrated by the aforementioned case of Ojai in 2013 and the more recent case of a US$24.6 million revenue bond issued in 2023 by York County in South Carolina to recoup the costs incurred in the take-over of a private water utility. These latter bonds were rated AA-plus by S&P Global Ratings, with JPMorgan Securities as the underwriter (Nocera, 2023).

Without further research it is impossible to say how widespread the use of bonds has been to finance remunicipalisation, or what their impact has been on the remunicipalisation process. Nor is it clear that investors would be willing to participate in a remunicipalisation bond that was designed to disrupt the business-as-usual model of municipal services (Ponder, 2021). The fact that the municipal bond market is also largely focussed on relatively wealthy cities in the Global North limits their potential to finance remunicipalisation efforts elsewhere (Mantso and Blaauw, 2010; Singh and Dhanda, 2021).

Higher tiers of government

For some remunicipalisations, relying on funding from higher tiers of government may be a necessary and unavoidable part of the financing equation. Legislative responsibility for water, health, electricity and other locally operated services often lies with national or regional governments, and this can extend to financing. In low-income countries many municipalities rely heavily on intergovernmental transfers for financing core services (Bahl and Linn, 2014; Masaki, 2018).

Given the role that national and regional governments have played in creating the conditions for privatisation (e.g. downloading service responsibilities while reducing transfers to cover their costs) it is also reasonable to assume that higher levels of government have a financial responsibility to help reverse this process (Cepiku et al., 2016; Streeck, 2014). Growing commitments on the part of national governments to address issues such as climate change, human rights and the Sustainable Development Goals provide further justification for their financial support for remunicipalisation if it improves service delivery, while their stronger credit ratings can provide cheaper and better access to international finance.

Despite these realities, there are no recorded examples of direct financial support for remunicipalisation from national or regional governments. There is evidence of legislative support – such as in Germany where the national government has worked to advance the country’s rapid transition to renewables by assisting with the creation of new public energy companies (Berlo et al., 2017; Wollmann et al., 2010) – but funding for this appears to be indirect in the form of grants and subsidies to assist with the energy transition as a whole, as well as a share of national income and sales taxes available to municipalities (Davalos Yoshida and Gil-Herrera, 2020). These sources of finance are not earmarked for remunicipalisation, per se, although intergovernmental transfers can theoretically be applied to a remunicipalisation process. Once again, more research is needed.

The likelihood of significant financial support for remunicipalisation from higher levels of government would appear to be limited in the short term, however. Many national and regional governments remain committed to privatisation and continue to create the legislative and financial edifice to promote it (Brehm, 2021; Goldfajn et al., 2021; van Den Berge et al., 2021). Competing political parties and ideologies can also be a barrier, with local governments that support remunicipalisation often at odds with their higher-tier counterparts, such as with tensions between Barcelona’s En Comú party and various Spanish national administrations (Charnock, 2018; Eizaguirre et al., 2017). Unwillingness (and inability) on the part of national and regional governments to incur the debt and deficits required to finance remunicipalisation is an additional barrier, particularly if it is seen to open a floodgate of demands from other sectors and municipalities. Even if the political will from higher tiers of government does exist, undoing the financial scaffolding created by decades of austerity and downloading is not a quick or easy fix, with baked-in jurisdictional and legislative constraints on inter-governmental transfers limiting the potential for financial assistance (Dagdeviren and Karwowski, 2022; Smith et al., 2019).

There are also more existential questions about the role of higher tiers of government in remunicipalisation. If the goal is to advance local control and oversight then a strong financing role on the part of a national authority may be counterproductive, potentially squashing local transformations that do not fit with a national government’s agenda (Paul and Cumbers, 2023). There are cases of autocratic national governments supporting remunicipalisation for nefarious purposes, such as controlling local resources to manipulate politics and/or to reprivatise services to crony associates, as has taken place in Hungary (Horváth, 2016). In short, local advocates of remunicipalisation should be careful what they ask for from their national authorities.

Private commercial banks

Another potential source of funding for remunicipalisation is loans from private commercial banks (as distinct from the community-owned cooperative banks mentioned earlier), which are defined broadly here as for-profit lending institutions that are privately owned or publicly limited companies with shares traded on exchanges. Given the anti-private-sector sentiments of some remunicipalisation movements this may seem incongruous, but if bringing services back in-house is a pragmatic move designed to save money on the part of a local authority there is no reason to believe that private commercial banks would not consider lending for this purpose (assuming other financial risks are deemed acceptable).

In fact, a financially robust remunicipalised service provider could be an attractive lending opportunity, particularly if it is seen to advance other facets of economic growth through effective and sustainable service delivery. Private banks also earn profits from both swings of the remunicipalisation pendulum – lending to the private sector when services are contracted out and lending to the public sector when they are brought back in. A revolving door of bureaucrats between public and private service operators can further enable this dynamic, with long-term personal relationships between bank managers and utility managers potentially overriding the question of whether a service is publicly or privately run (Gabriela Castellani and Dulitzky, 2018; Seabrooke and Tsingou, 2021; Silano, 2022).

Once again research is scarce, but the potential for private banks to finance remunicipalisation would appear to be strong. Missoula offers a noteworthy example. Early in its eminent domain process the city issued a Request for Proposals to gauge the interest of financial institutions in assisting with the purchase of the private water utility. Six private banks submitted proposals, with Barclays Capital (based in the UK) winning the bid, based in part on its stated claim to have experience with financing remunicipalisations elsewhere. There was debate in city council about using local financial institutions, but the size of the financing required made this impossible. Knowing they had financial backing from a deep-pocketed bank also made it easier for the city to proceed with the eminent domain process. In the end, the city decided to issue bonds, which were purchased in their entirety by Barclays and resold on the market as 25-year revenue bonds. The cost of financing has been relatively low (as little as 1.47%) and has not had any negative effect on the operations of the new public utility, with no need to raise water tariffs (author interview with Leigh Griffing, Finance Director, City of Missoula). Similar financial arrangements have been made with Barclays in the $448m purchase of Monterey’s water system in California (author interview with Dave Stoldt, General Manager, Monterey Peninsula Water Management District).

Financing remunicipalisation with commercial banks does raise a number of concerns, however. The first relates to the question of indebtedness and whether local governments have the capacity to absorb the additional liability, even in relatively wealthy places. In Naples, for example, policymakers chose not to borrow to finance the remunicipalisation of the city’s sewerage system due to the ‘enormous costs, which would undoubtedly have exceeded the spending power of a municipality afflicted by a severe public debt and a stagnant economy’ (Turri, 2022: 1856). For many cities in the Global South increased debt to take on remunicipalisation is simply not an option.

It is also true that debts in one sector can undermine the fiscal health of other sectors if repayments affect the overall financial capacity of the municipality. Even if financially viable, municipal politicians may be reluctant to take on localised interest payments that could result in higher user fees and taxes as it may be too politically risky. Large loans can also undermine progressive remunicipalisation objectives by dampening the ability of a service provider to expand and improve services due to the costs of financing.

There is also the larger question of ‘financialisation’. Broadly defined as the growing power of financial actors in everyday activities, with a shift in the locus of profitmaking from the ‘real’ to the ‘financial’ economy, financialisation has become an increasingly significant component of private sector involvement in core services and infrastructure through complex (and often opaque) vehicles such as private equity funds and the securitisation of revenue flows (Ahlers and Merme, 2016; Bayliss and Van Waeyenberge, 2023; Loftus et al., 2019). Financialisation has also proved to be one of the primary motivations for remunicipalisation, with unsustainable levels of debt benefitting private financial institutions while reducing investments in infrastructure and raising costs for consumers (Beveridge and Naumann, 2013).

If escaping financialisation is one of the factors driving remunicipalisation, should private finance be employed when a service is back in public hands? The devil is in the details in this regard. If borrowing can be done on terms that are favourable to the goals and objectives of a remunicipalisation project then debt may be a necessary (and prudent) approach. But given how powerful financial capital has become, working out favourable terms that fit with the goals of a remunicipalisation project can be difficult, particularly for small local authorities and for municipalities with a more transformative agenda. Case study research is needed to shed more light on these dynamics.

Private finance has also proven to be a fickle partner when it comes to infrastructure investments, with commercial banks playing a minor role in financing essential services, particularly in riskier sectors such as water and sanitation (due to chronically low rates of cost recovery) and in low-income countries or smaller municipalities with weak credit ratings. Most private banks have ‘abandoned project finance completely’ in essential services (WWC (World Water Council) and OECD (Organization for Economic Cooperation and Development), 2015: 27), while public finance ‘remains the overwhelmingly predominant model worldwide, providing for well over 90 % of infrastructure investment’ (Hall, 2015: 10). According to the High Level Panel on Water, ‘private money can rarely fully substitute for public finance in major water infrastructure’, acting as a ‘junior partner in most cases, and even then will need comforts of various kinds’ (WWC and OECD, 2015: 58; Leigland et al., 2016).

To the extent that private banks do participate in the financing of remunicipalisation it will likely be restricted to relatively wealthy cities in sectors considered to be reliably ‘bankable’, with the fewest possible disruptions to business as usual. From the perspective of private investors this makes sense. Their remit is not to maximise public goods for the community; it is to increase private returns for their shareholders (cf. Lazonick and Shin, 2019).

Public institutional investors

Another potential source of funding for remunicipalisation is that of public pension funds and sovereign wealth funds. With more than US$27 trillion in assets under management these are public monies that are owned, controlled and regulated to varying degrees by public agencies (Megginson et al., 2021; Megginson and Gao, 2020). They are also intrinsically geared to long-term, stable and patient investment strategies due to their financial objectives (e.g. funding pensions). As such, they could be a natural fit with remunicipalisations that aim to expand and improve public services and infrastructure over the long term, particularly if the public sector unions that pay into a pension fund are opposed to privatisation and supportive of remunicipalisation.

Despite this potential there are no documented cases of public institutional investors financing remunicipalisation. In fact, rather than advancing remunicipalisation many of these funds have become leading agents of privatisation, with rapidly growing investments in public infrastructure as an asset class (Braun, 2022; Hassel and Wiss, 2020). Public pension funds are particularly active on this front and are seen as world leaders in this investment trend. The Ontario Teachers’ Pension Fund, for example, has majority ownership of the fully privatised water and sanitation services in Chile (initially divested under Pinochet) (Ontario Teachers Pension Plan [OTPP], 2011; Skerrett, 2018). They are also active members of the Global Infrastructure Investor Association (with a mandate to ‘promote private investment in infrastructure’) and have resisted efforts to remunicipalise water services in Chile, arguing that privatisation has benefitted low-income Chileans and that the fiduciary responsibility of pension fund managers is maximising returns for their members, not engaging in political action (Pryke and Allen, 2022).

This is not to say that public pension funds and sovereign wealth funds will never play a role in financing remunicipalisation, but it will be difficult to reverse their current pro-privatisation inertia. A lack of transparency and public engagement makes such a transition more challenging, with the management of many public pension funds having been effectively privatised, shielding decision makers from input even from their own members (Oręziak, 2022) while many sovereign wealth funds are owned and operated by authoritarian regimes.

Multilateral development banks and bilateral aid agencies

Multilateral development banks (such as the World Bank) and large bilateral aid agencies (such as Agence Française de Développement) are another potential source of funding for remunicipalisation. Both types of institutions are major funders of public infrastructure, particularly in the Global South where they can finance as much as 90% of investments (Alaerts, 2019; World Bank, 2017).

Given the neoliberal orientation of many of these organisations, and the central role they have played in promoting privatisation over the past 40 years, one could assume they are not supporters of remunicipalisation. For the most part this appears to be true, with major multilateral banks and bilateral aid agencies having effectively sidelined the topic, either by ignoring it or by being outrightly hostile towards it (McDonald, 2019).

But development banks and aid agencies are not entirely uninterested in the topic. Although they do not call it remunicipalisation, the World Bank has assisted numerous governments in rebuilding public services after an unsuccessful privatisation. In Uganda and Tanzania, for example, the World Bank initially promoted the privatisation of water services in urban areas, but after ‘botched’ failures (Bukenya, 2020: 3) reversed its position, arguing in favour of publicly owned corporatised water utilities run along commercial lines, ‘introducing private sector management principles and practices, including efficiency orientation, competition, performance management and entrepreneurialism’ (Mbuvi and Schwartz, 2013: 380), with the apparent hope of one day returning them to private management once business-friendly executives and ringfenced accounting systems were in place (Pigeon, 2012).

Such are the terms of neoliberal forms of remunicipalisation, with financing dependent on the creation of a highly commercialised public entity. As such, the potential for international financial institutions to play a role in financing transformative types of remunicipalisation would appear remote, although as outlined in the next section of this paper some regional development banks have engaged more positively with remunicipalisation, notably in Europe.

Public banks

One final potential source of finance for remunicipalisation is that of public banks – defined here as financial institutions that are owned and controlled by the state or some other public entity, governed under public law, or functioning according to a public mandate (Marois, 2021; Schmit et al., 2011). These banks can operate at a municipal, national and even international levels, but they are distinguished from their multilateral counterparts (such as the World Bank) by their ownership and governance models as well as their geographic focus.

As of mid-2020, there were an estimated 910 national and sub-national public banks around the world, holding close to $50 trillion in assets (nearly a fifth of total banking resources) and equating to a third of global GDP (Marois, 2021). Public banks are a diverse lot, however, and can function according to very different logics. Some are highly commercialised and neoliberal in their orientation (such as in Turkey; see Yamamura, 2019) while there are others for whom profits are secondary and which support the provisioning of more patient finance (such as with several Brazilian and German public banks; see Scherrer, 2017). Still others have mandates which put social returns on par with financial ones (such as the Banco Popular in Costa Rica; see Marois, 2021).

A resurgence of interest in public banks has resulted in a renewed debate on their purpose and potential, with writing on the topic generally falling into two polarised camps. Neoclassical economists tend to dismiss public banks as sclerotic, inefficient and corrupt – and therefore best privatised (La Porta et al., 2002, Calomiris and Haber, 2014; Demirgüç-Kunt and Detragiache, 2010). Keynesian-oriented political economists, by contrast, celebrate the developmental capabilities of public banks and their ability to stabilise economies at times of crisis via counter-cyclical lending (Andrianova et al., 2012; Griffith-Jones and Ocampo, 2018; Naqvi et al., 2018).

The framing of public banks in this paper falls into a third category of analysis which sees them as neither inherently good nor bad (Marois, 2021; UNCTAD, 2019). Taking an historical materialist perspective, public banks, like all state institutions, must be seen as constellations of social relations in which state power is a product of an ever-changing and ever-evolving mix of social forces (gendered, racialised and class-divided) that exist within and beyond their jurisdiction. The potential for public banks to be democratic, equity-oriented or otherwise progressive is not merely a matter of tweaking policy but a product of broader social struggle and change.

In terms of public services, public banks have long been active in financing infrastructure. Some have adopted a public–private approach, using public funds to leverage private investment (Loxley and Hajer, 2019; Whiteside, 2018), while others have explicit mandates to lend directly to the public sector at cheap rates and have done so for decades. The Nederlandse Waterschapsbank NV (NWB), for example, was formed in 1954 with the sole mandate of lending to the country’s public water authorities, with the aim of ‘keeping the public sector’s financing costs as low as possible’ via its AAA credit ratings (Nederlandse Waterschpsbank NV [NWB], 2018: 27). The German Kreditanstalt für Wiederaufbau (KfW) has a similar mandate, with an investment scope that covers social, infrastructural and ecological goals, as well as lending to low-income countries at concessional rates (KfW, 2019; Naqvi et al., 2018). The prospect for public banks to play a role in financing remunicipalisation would thus seem considerable, capable of offering low-cost loans driven by public-purpose mandates and patient finance that can account for broader social returns.

There are no detailed case studies of public banks financing remunicipalisation but there are examples, particularly in Germany where public banks play a large role in infrastructure spending in general and in the transition to renewable energy in particular (Marois, 2021). In the electricity sector, for example, a ‘key ingredient’ in the remunicipalisation of local power companies ‘has been Germany’s decentralised and largely socially owned banking sector, with funding for renewable energy projects coming primarily from local state-owned banks’Cumbers, 2016: 277-289). Efforts by Munich’s municipal electricity utility to become self-sufficient in renewables by 2025 have been ‘underpinned by local and regional state bank support, which has allowed it to embark on a €9 billion investment strategy’ (Cumbers, 2016: 277-289; see also Wagner and Berlo, 2017). As a manager of one German public bank noted: ‘Politically we have a very clear opinion about what we call re-communalisation … not all the energy suppliers are in municipal hands [but] there is a strong tendency to switch that and we support that switch’ (as quoted in Hall et al., 2016: 12).

Public banks also have the potential to definancialise lending by rolling back the influence of financial motives, financial markets and for-profit financial actors and institutions, while foregrounding local interests (Block and Hockett, 2022; Karwowski, 2019). Many have taken up this challenge by financing infrastructure in less marketised ways, with equity and sustainability as core objectives. The German KfW is perhaps the most committed green public bank in the world (Geddes et al., 2018; Marois, 2021). Unique institutions, such as the Council of Europe Development Bank, continue to pursue an explicitly social mandate (Reyes, 2020). The centuries-old German system of local public savings banks (the Sparkassen) retains assets in excess of US$2 trillion, anchored to local communities and guided by public mandates, despite the efforts of private European banks and regulators to eliminate them (Cassell, 2021). One concrete example is the financing of the remunicipalisation of energy services in Thuringa, Germany, which cost €950 million. Initially there was considerable criticism ‘directed at the financial risk involved in taking on public sector loans of the required magnitude’, but the remunicipalisation project is now seen as ‘highly successful by actors across the political, financial, economic and administrative spectrum’ with the municipalities involved expected to be ‘debt-free before 2030’ (Paul and Cumbers, 2023: 175).

Less optimistically, public banks continue to face the impacts of four decades of neoliberal restructuring, with ongoing pressures to privatise them. Market-oriented regulatory changes, such as EU Competition Law and State Aid rules, have shrunk the spaces in which public banks can operate. The intensification of market-based competition and the overall rise of financialisation have also heaped pressures on public bank operations (Scherrer, 2017). Increasingly, European development banks source the bulk of their inflows of capital from global financial markets, while creditworthiness and credit ratings by market-oriented agencies have intensified. Public banks are also tasked with finding ways to de-risk private sector investments while pursuing public purpose impacts (Mertens et al., 2021). In this regard, weaning public banks off global private capital markets may be a necessary precursor to having them play a role in progressive forms of remunicipalisation, either through heavier capitalisation by higher tiers of government or by becoming deposit taking institutions that can redirect funds from local public agencies back into the neighbourhoods they serve in the form of ‘community wealth building’ (Dennis and Stanley, 2023; O’Neill and Guinan, 2021).

Given these challenges, public banks should not be seen as silver bullets in the financing of remunicipalisation. Berlin is a case in point. The €1.3 billion loan used to purchase shares of the private water companies in 2012 was financed by a public bank (Investitionsbank Berlin) but the costs of paying it back have ‘cast doubt on the sustainability of water operations [and] threaten to undermine the aspirations of the Berlin Water Table for affordable and socially equitable charges’ (Lobina, 2016: 155). The ‘public’ nature of the loan does not change the fact that the buy-out deal continues to be seen as excessively generous, over-compensating the previous private owners for profit loss while placing the burden of repayment on the new public water operator. Although the terms and conditions of the loan are available to the public – and therefore more transparent than private commercial lending – local activists criticise a broader lack of transparency around decision making related to water management in the city (author interview with Dorothea Härlin of Berliner Wassertisch). In other words, public financing is only one component of a larger set of governance changes required for more transformative types of remunicipalisation.

Many public banks also appear to be unaware of remunicipalisation, or are agnostic on the matter (i.e. indifferent as to whether services are run by public or private agencies) (Butzbach and Spronk, 2022; Garcia-Arias et al., 2022; Marois and McDonald, 2022). Nor do advocates of remunicipalisation seem to consider public banks as a possible source of financing (outside of Germany at least). This may be due in part to a general lack of awareness of public banks, with many working behind the scenes to finance municipal infrastructure in ways that do not register on the public radar. In the Nordic region, for example, municipal infrastructure banks are amongst the largest financial institutions in their country, but bank representatives often lament the fact that ‘nobody really knows who we are’ (Juuti et al., 2022). Perhaps this is the price to pay for being a ‘boring’ financial institution – another potential reason to involve public banks in the financing of remunicipalisation instead of riding the spectacular boom-and-bust cycles of private finance (Cassell, 2021).