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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Source: Chulalongkorn University, 2007

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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