french development agency financing low carbon cities in asia and emerging countries sylvie margat,...
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French Development AgencyFinancing Low Carbon Cities in Asia and
emerging countries
Sylvie MARGAT, Deputy Director of AFD Bangkok
AFD, the French Development AgencyFrench ODA Agency• AFD is the Groupe Agence Française de Développement, a bi-
lateral development finance institution established in 1941
• AFD mission is to finance development according to France’s Overseas Development Assistance policies.
• AFD is 100% State-owned and works on behalf of the French government
Untied aid
Present in 60+ countries • AFD’s activities are aimed at reducing poverty and inequalities
(Millenium Development Goals), promoting sustainable economic growth (green and socially inclusive), and, in emerging countries especially, protecting “Global Public Goods” of benefit to all humanity.
• Protecting Global Public Goods includes the fight against climate change
EUR 5 billion annual commitments in 2009• Asia region = average of 20-25% of commitments• Urban development = 25% of yearly commitments, mainly
through direct lending to cities
Some recent examples
• Direct loans to cities to support the implementation of municipal climate change action plans and social inclusion • Durban, South Africa (under appraisal)• Bangkok, Thailand (under discussion)• Diyarbakir, Turkey
• Direct loans to cities for the financing of Mass transit systems:• Istanbul, Turkey: 120M€ soft loan in 2006/2008, extension of
metro and light rail systems (disbursed)• Amman, Jordan: soft loan, under appraisal, for 3 BRT corridors• Medellin, Colombia, loan, under appraisal• Curitiba BRT and Biodiversity preservation (38 M€), Brasilia
Tramway (to be signed)• Not only in emerging countries:
• Dakar (10 M€), Energy Efficiency in public lighting (under implementation)
Additional information
Sylvie MARGAT, Deputy Director of AFD Bangkok
AFD, the French Development AgencyFrench ODA Agency• AFD is the Groupe Agence Française de Développement, a bi-
lateral development finance institution established in 1941• AFD mission is to finance development according to France’s
Overseas Development Assistance policies.• AFD is 100% State-owned and works on behalf of the French
government• AFD Group
• PROPARCO : financing of the private sector• French GEF secretariat• CEFEB: financial training center
Present in 60+ countries • AFD’s activities are aimed at reducing poverty and inequalities
(Millenium Development Goals), promoting sustainable economic growth (green and socially inclusive), and protecting “Global Public Goods” of benefit to all humanity.
• Protecting Global Public Goods includes the fight against climate change and pandemics; the preservation of biodiversity; the promotion of social and environmental responsibility; as well as aid to countries weakened by strife, war and natural disasters.
AFD, the French Development Agency
EUR 5 billion annual commitments in 2009• Asia region = average of 20-25% of commitments• Infrastructure & urban development = 25% of yearly commitments
Wide range of financing tools • Grants (projects, study funds)• Sovereign loans (from concessional to market conditions)• Non sovereign loans (concessional or market conditions)• Private sector loans (market conditions)• Partial risk guarantees, loan guarantees, Guarantees on
loans in local currency • Equity financing
Untied aid
AFD works hand-in-hand with many partners: • national, regional and local governments; • local authorities and municipalities; • international agencies; • non-governmental organizations; foundations; • private companies; entrepreneurs; • and local banks, microfinance institutions and capital markets…
AFD’s field office expansion
Jakarta 2007
New Delhi 2007
Islamabad2007
Amman2006
Sanaa 2007
Port Louis2006
Brasilia + Sao Paulo
2007
Luanda2008
Lagos2008
Istanbul2005
Beijing2006
Colombo2006
Damascus2009
Cairo2007
Kabul2009
Bogota2009
Mexico City2009
Abidjan2008 re-opening
Manilla(Philippines)
2010
Almaty (Kazakhstan)
2011
Baghdad(Iraq) 2010
Paramaribo(Suriname)
2010
Bus Rapid Transit system in Amman, Jordan (under apraisal)
• Development of efficient public transport in Amman, fast growing capital city of 2,6 M hbts,
• 3 BRT lines, 32 km• Great Amman Transport Master Plan previously
financed by AFD (grant) • Paris city cooperation• Project impacts: access to transport for the poor
populations, urban productivity improvement (big reduction in transportation time), CO2 emissions reduction, air quality improvement, increase safety
Bus Rapid Transit system in Amman, Jordan (aproved)
Integrated urban project of central east Medellin (under appraisal)
• Urban integrated program: main objective is social inclusion
• Massive public investments in a poor area
• AFD component: Financing a tramway line and 2 cable metro lines
• positive environmental impact and economic development cobenefits
• 2,5 M hbts, Colombia 2nd City
Background• Supporting the sustainable development / climate change program of
the 3rd South African city
Issues • Implementation of an energy efficiency and renewable energy policy
and financing of projects, • Developing access to basic environmental urban services (sanitation,
solid waste, etc.),• Integrating disadvantaged population to the city by restructuring
social housing projects
Financing & technical assistance• direct financing to the municipality in local currency• Support to the energy office / climate change unit to lead &
coordinate the program, and acquire the relevant expertise (EE, RE, social housing, urban development, etc.)
Impacts: Reduce Durban environmental footprint / Support social policies / Promote pilot project to limit urban sprawl
Supporting the sustainable development of Durban city in South Africa
Partner• the Metropolitan Municipality of Istanbul (15 M hb.), created in 1982 to regroup all district
municipalities
Project• Mass urban transportation program under construction, composed of several railway lines
(metro, LRT, tramway lines)• Positive social and environmental impact (CO2 emission reduction) and on urban productivity
Financing• Total cost of the program is above USD 1.5 Bn, half of the financing comes from the
municipality’s own resources• AFD provided the MMI with
• a € 120 M concessional loan (60 M€ in 2006 and 60 M€ in 2008) • 15-year maturity with 5 year grace period
Issues• A first sub-sovereign financing in Turkey without the MOF guarantee• After this first commitment from AFD, Istanbul got access to wider financial market (EIB, other
banks)
Public railways transportation program in Istanbul
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Greenhouse Gas EmissionGreenhouse Gas Emission in in Bangkok Compare with Other Large CitiesBangkok Compare with Other Large Cities
Source: World Resource Institute, 2000
0.6% of the world total GHGs emission
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Toronto
Bangkok
New York
Tokyo
London
Source: Chulalongkorn University, 2007
CO2 Million Tons per year
Developing a partnership with Bangkok on the Global Warming Action Plan (under discussion)
The 5-Year Action Plan for Global Warming The 5-Year Action Plan for Global Warming Alleviation (2007 – 2012):Alleviation (2007 – 2012): The 5 Approaches The 5 Approaches
1. Improvement of Transportation System
2. Promotion of Renewable Energy
3. Energy Conservation and Building Retrofit
4. Solid Waste and Wastewater Management
5. Expansion of green areas
Ultimate Goal: 15% reduction of GHGs emission by 2012
In April 2008, BMA officially adopted:
Developing a partnership with Bangkok on the Global Warming Action Plan for 2007:2012
Objective : “assist Guiyang establish a comprehensive Transport plan, covering the Greater Guiyang area and comprising all transportation modes, which will take into account environmental and energy consumption aspects”
Contents. Transport demand model for Greater Guiyang (transport network and travel demand analysis capabilities; all modes, traffic-related air pollutant and energy consumption estimations derived from the model)
. Strategic Environmental Assessment (SEA) (focused on energy aspects; overall assessment of the urban development policies and specific assessment of the Transport Plan; using a mix of qualitative assessment and quantitative data; recommendations integrated in transport plan)
. Support to Transport Planning Process (facilitating integrated approach from an institutional point of view)
Example :Guiyang Transport project, TA support
Requirements. Integration in formal planning exercise:
- appropriate timing- “methodological” integration- inter-departmental collaboration
. Political interest and will at municipal level
. Legal framework + guidelines?
Benefits and Co-benefits .Global Environmental, local environment, political, social, economic (economic benefits of better-dimensioned integrated system, city attractiveness, etc…). SEA a comprehensive tool to program appraisal and analysis .Long term partnership with development partners related to future investment.Field open to city-city international cooperation Contents
Example :Guiyang Transport project, TA support
Lessons learned