This study had two aims: (i) to present an integrated methodology for the development of a City Capability Assessment Framework based on PCA and (ii) to investigate the main factors that influence the entire process of developing SE investments at the local level.

The methodology utilized in this study, as well as the outcomes of its application, can be further exploited by a variety of stakeholders, including international investors, development banks, ESCOs as well as local and regional authorities. Such a framework enables the former stakeholders to decide which cities to invest in to minimize risks and potential delays in project development and implementation. Deployment of the findings of this study could also facilitate ESCOs to effectively provide services to meet cities’ unique needs. Finally, the insights offer a better understanding of their strengths and weaknesses regarding city-level project development and implementation and can serve as a guide for cities to further enhance their capacities with regards to SE projects.