alexis bonnel sector operations agence française de développement

Agence Française de Développement – AFD – www.afd.frAgence Française de Développement – AFD – www.afd.fr

Alexis BONNELAlexis BONNELSector OperationsSector Operations

Agence Française de DéveloppementAgence Française de Développement

Infrastructure Trust FundInfrastructure Trust Fundand Climate Changeand Climate Change


The insider’s viewContribution of ITF co-financed projects on climate

change mitigation and adaptation

The outsider’s viewA performing blending instrument

An example to follow by Climate Change negotiations on future financing architecture

ITF and Climate ChangeITF and Climate Change


Climate change adaptation & mitigation are major issues in Sub-Saharan Africa Adaptation : many countries extremely vulnerable

Mitigation : increasing dependence on fossil energy ; poor resilience of development paths to external energy shocks (depletion of fossil resources, price volatility, …) ; deforestation

ITF already contributes on both agendas at project level

Climate impact of projects is optimized by also working at policy making level and through capacity building e.g. spatial planning

Flexible interpretation of geographical scope and regional mandate of ITF needed e.g. improving performance of national power utilities, addressing

energy efficiency and demand-side management issues, …

Climate Change Climate Change insideinside ITF ITF


Request systematic carbon footprint (mitigation) ?

Request systematic vulnerability analysis (adaptation) ?

Define carbon objectives/guidelines/strategies of ITF ?

Enhance knowledge sharing, best practice dissemination and joint analytical work between ITF members

Climate Change Climate Change insideinside ITF ITFNext steps ?Next steps ?


The The outsider’soutsider’s view : view : Climate finance and ITF Climate finance and ITF

Source : Bilateral Finance Institutions and Climate Change:A Mapping of Climate Portfolios; Stockholm Environment Institute, 2009


Current situation of international Current situation of international public climate financepublic climate finance

USD 18 bn (EUR 12 bn) committed annually on mitigation and adaptation

Bilateral + EIB: 66%

2008 data, based on climate finance reporting of relevant institutions

NB : European Commission does not currently report on EdF climate change interventions

Several programs sponsored by EdF could be considered as climate finance, including some funded by the Energy Facility

Multilateral: 34%


Tackling climate change means investing In all sectors: energy, transportation, water, housing, industry, agriculture…

By structuring demand and making projects financially viable

Catalyzing hundreds of billions… By mobilizing the whole range of existing and future means of financing :

national and international tax system and markets, carbon markets, public and private sector

By creating leverage effects with tools dedicated to climate: stockholders equity, grants, loans, guarantees…

… and reforming ODA, a major player in supporting countriesand catalyzing finance By creating a system that responds to countries’ demands

By supporting and reinforcing the emergence of national institutions in developing countries

By conditioning aid solely on the criteria determined by the COP

By guaranteeing priority of access to the poorest

Climate finance / COPClimate finance / COPA paradigm changeA paradigm change


Governed by the Parties

Giving developing countries the choice of their donors

Promoting collaboration and competition For more innovation and efficiency

Using funds fairly By adapting budgetary efforts to the nature of the investments and

beneficiaries

By using subsidies to make projects financially viable

By attracting public and private, international and national investments

And quickly By mobilizing all existing channels

Predictable and sustained flows, guaranteed by the COP By placing the mechanism under the authority of the COP

By creating a binding system of financial contributions by Parties

An innovative and quickly operational An innovative and quickly operational financial mechanismfinancial mechanism


Grants

Credit committee of the International blending facility

Contributions by Parties and/or innovative financing

mechanisms

Executive committee of the Facility

COP

High Level Body Registration Database

Financing requests

Inte

rnat

ion

al b

len

din

g fa

cili

tyInternational blending facilityInternational blending facility

Grants + loans +

guarantees + other

financial tools

Pool of financiersNational, bilateral, international, private

NAMAs

Grants

Policies/Local govts/Companies

Adaptation strategies

Additional grant requests

as needed


Thank you …Thank you …

alexis bonnel sector operations agence française de développement

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