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EDITORIAL: ENVIRONMENT, A PRIORITY AXIS FOR AFD OPERATIONS IN OVERSEAS FRANCE

Agence française de Développement operations, in line with international commitments made by France, promote a sustainable development model based on three traditional pillars: economic growth, reducing poverty and inequality and environment. The latter has been an increasing focus for several years now: a Climate strategy was adopted in 2005 and two strategies, “clean energy” and “biodiversity” are currently at the design stage. In the field AFD’s commitment is expressed through specific project financing and improving environmental and social risk management in AFD financed projects. AFD group complemented its operational social and environmental policy with an internal policy aiming to reduce its own ecological impact by controlling water and energy consumption and improving waste management.

In order to implement these actions, AFD draws on its team of experts from different backgrounds (economists, engineers, consultants) and external consultants (sanitation, energy, transportation, natural resource management…). It is also supported by a network of French and foreign partners (e.g. Ministry of the Environment, IUCN, WWF, CI…) through partnership agreements and/or joint actions. An important framework partnership agreement was recently signed on 22 March with ADEME, a long-standing partner, which should strengthen cooperation.

AFD operates in this area with a wide range of financing tools (loans, guarantees, trust funds…) and techniques (studies, internal and external expertise, technical assistance). It is also a member institution, administrative and operational manager for the French Global Environment Facility (FGEF) which operates through grants. AFD therefore coordinates the actions of both organizations in order to create the best possible synergies.

AFD operations are varied in terms of thematics and geographical area (e.g. electricity production from waste biogas in South Africa, combined heat and power in China, developing the Limpopo National Park in Mozambique, coral reef protection and management in the Pacific…).

AFD’s new strategic orientations put the environment as a priority axis in Overseas France. AFD therefore wishes to strengthen its position as a partner of the State and Local authorities for sustainable development. Problematics in these geographies are varied and often at the center of global issues. For instance, 10% of the planet’s coral reefs and lagoons, 8 million hectares of tropical forests and 5 out of the 34 global biodiversity hot spots are concentrated in Overseas France.

This edition seeks to illustrate AFD operations and initiatives in the environment field in Overseas France geographies and regional cooperation countries and open the debate on improving the integration of these problematics in all actions.

FRENCH OVERSEAS LOCAL AUTHORITIES

 Martinique - Colloquium “Climate change: is the Caribbean in danger?” – Fort de France – 11, 12 and 13 December 2006

The Departmental Council of Martinique and AFD signed a partnership agreement in 2006 with a focus on sustainable development.

The agreement consolidates AFD’s long-standing support for the design and implementation of the Department’s Agenda 21.

Within this framework AFD provided support for the organization of the colloquium “Climate change: is the Caribbean in danger?” alongside the ONERC (1), the National Observatory on the Effects of Climate Change:

Three highlights marked the three-day colloquium:

• scientific and technical presentations mainly focusing on the issue of adapting to climate change, 
•  an exhibition on “climate change”
•  thematic workshops

A colloquium on the vulnerability specific to insular territories

The event gave participants from Overseas Departments (Reunion, Martinique, Guadeloupe and French Guyana), Metropolitan France and neighbouring States (Jamaica, Dominica, Venezuela etc) the opportunity to share their diagnoses, analyses and state of scientific and technical knowledge which led to the adoption of the final declaration and action plan.

A workshop “Energy, climate, what is the role for local authorities?”

The workshop was coorganized by the Departmental Council and AFD and aimed to stress the importance of the link between energy and reducing greenhouse gas emissions (GHGs) in local authorities’ sustainable development strategies. According to ADEME, French Local authorities are directly involved in over 12% of domestic greenhouse gas emissions as a result of infrastructure decision-making and the activities they manage, for instance transportation and waste. They also have an indirect impact on GHG emissions through information, incentive and mobilization missions towards enterprises and the general public.

The debates, based on presentations made by the main actors – Departmental Council, EDF, ADEME and AFD, showed the high level of public awareness through the number of participants – over 110 people – and the quality of interventions.

For more information
Press release:/jahia/Jahia/lang/fr/home/EspacePresse/Communique/pid/1732
Final declaration:http://www.climatcaraibe.cg972.fr/index.phpoption=com_content&task=view&id=2&Itemid=7

(1) Of which the President is Paul Vergès, President regional consult oof the Reunion

 Guadeloupe – Supporting environmental policy design and implementation

Water supply cut offs, the review of the programme for household and similar waste disposal (PEDMA), the development of sanitation, the promotion of renewable energy and environmental issues are hot topics in Guadeloupe. The series of lags in these sectors is about to be caught up with political actors coming to agreement on necessary changes and the best solutions for the specific context of the island.

AFD is contributing to this dynamic by stepping up environmental operations. Its action upstream aims to help the relevant actors to design public policy in water, sanitation, renewable energy and waste sectors and provide financial support downstream for sectoral projects.

In 2006 AFD, on behalf of three local authorities operating in water and sanitation sectors, therefore conducted (i) an analysis of their institutional, legal, financial and accounts situation, (ii) a diagnosis of the state of their networks and (iii) support to designing their investment programme. Public actors also called on AFD expertise for an analysis and critical opinion on strategic documents such as the programme for household and similar waste disposal (PEDMA), water supply programme, delegation contracts for water and sanitation and the delegation of public irrigation services…

AFD is continuing to offer subsidized loans to the public sector in the environment sector. It concluded a partnership agreement with the Regional Department for the Environment in order to give systematic access to prefinancing for European grants for public authorities bearing projects in this sector. AFD Group (AFD/PROPARCO), within the framework of its mission to support the private sector, participated in financing wind turbine farms (Eole Terre de Bas, Fonds Caraïbe).

 French Guyana – Biodiversity protection on the Guyana Plateau

In the North East of South America the Amazon basin covers an area of approximately 650 million hectares and stretches over nine countries. From a biological point of view the area is exceptional with a third of the planet’s tropical forests. The last two World Conservation Congresses listed the Guyana Plateau, which includes French Guyana, among the seven priority action zones for knowledge and sustainable biodiversity management.

AFD Group, through the French Global Environment Facility (FGEF), is involved in the project for sustainable use of forest resources in the Guyanas (Guyana, Suriname, French Guyana). The project began in 2002 and aims to mitigate negative impacts of forest exploitation and gold extraction on ecology and public health. It also aims to create a network of protected areas. Considerable progress has been made in these areas with the ecocertification of 500 000 hectares of forest in Guyana, training and awareness-raising activities for gold panners for the use of mercury-free processes and alignment for the three countries’ mining codes.

The 5.03 million euro project benefits from 1.36 million euros of FGEF financing. It also regroups WWF, Holland and Surinam and will be completed by the summer of 2007. In view of the issues at stake and the time necessary for policy development, a new larger scale project integrating French Guyana and the cross-border area of Brazil is indispensable (25% of FGEF dedicated funds).

 Reunion – Proparco participates in financing wind turbines in Sainte Suzanne

The Reunion Region has set a target of producing 100 MW of wind power by 2025. Meeting this objective must contribute to the island’s economic development, ensure its energy independence and mitigate greenhouse gas emissions. The viability of wind power has been proven by results during the first months of operation at the La Perrière wind power station and should encourage the implementation of similar projects in the high wind zone in the east of the island.

The power station is located on the municipality of Sainte Suzanne and was commissioned at the end of 2006. It is made up of 14 wind generators with a 275 KW unit capacity, making up a total of 3.85 MW of installed capacity. It now produces electricity equivalent to the consumption of 12 000 people. The power station is equipped with Vergnet wind generators which fold back in case of cyclone warning. It successfully got through Cyclone Gamede in February 2007.

Construction required an initial investment of over 7 million euros and was financed by a combination of equity from Aerowatt, an independent wind powered electricity producer, financing from Proparco, the AFD Group subsidiary dedicated to private sector financing (2.65 million euros), grants from the Region and Europe and funds from tax exemption packaging under the Girardin law.

Construction works are underway on the same site to expand the power station in order to reach a total capacity of 7.15 MW. Proparco, in the framework of its mission in French Overseas Local Authorities, will also provide 1.7 million euros of financing for this extension.

 Mayotte - Towards clean energy

Electricity consumption in Mayotte has tripled since 1997, an increase due to several contributory factors:
(1) demographic dynamism with +4% growth per annum;
(2) social and economic development with the construction of many facilities and infrastructure in productive, health, education and housing sectors;
(3) the rise in purchasing power due to the increase in last resort social benefits and the phasing in of income alignment which induce household consumption;
(4) the general reduction in electricity sale tariffs since the national mechanism for tariff equalisation has applied to Mayotte.

Against this backdrop, in 2007 AFD participated in the financing of a second electric power plant with a 20 MW capacity which will raise total production capacity to 80 MW by 2008. From the outset of the project, AFD, with a concern for environmental preservation and optimizing public funds, requested that SAEM Electricité de Mayotte (EDM) provide for a less polluting and more economical electricity production method than the currently used diesel fuel.

An initial AFD financed study, in consultation with EDM, particularly focused on the gas sector. With the support of EDM and the contribution of several bodies and institutions such as the Mayotte Departmental Authority, the Prefecture and the Chamber of Commerce and Industry, the study concluded the technical feasibility and economic viability of the gas sector. Initial analyses, yet to be confirmed, estimate an economic gain of 17% for the LNG (liquefied natural gas) sector and 39% for the CNG (compressed natural gas) sector.

The economic interest for deploying a gas activity in Mayotte may be further strengthened by joint development with other sectors in the sub-region. A combined Mayotte + Reunion scheme would indeed optimize the use of methane tankers (alternating triangular or radial transport), thus reducing the “criss-cross effect”.

The project benefits from considerable support from public authorities due to both its environmental and financial interest (the State pays huge compensation to the region’s electricity producers under tariff equalisation).

EDM, boosted by this positive situation, has decided to purchase “DUAL” generators which will initially operate on diesel fuel but will be able to change over to gas when the time comes.

 Martinique/New Caledonia – Sustainable development in housing companies

AFD is a reference shareholder for a network of housing subsidiaries based in Overseas France which also carry out actions for sustainable development. The SIMAR (Martinique Housing Company) and SIC (New Caledonia Housing Company) are two examples.

SIC (New Caledonia Housing Company) is engaged in a sustainable development process

SIC is aware of its position in New Caledonia, housing 10% of Caledonians and a quarter of the population of Numea and puts social and environmental responsibility at the center of its corporate strategy. Its sustainable development objectives are applied right through the construction and rental management process.

From the very outset of housing design studies SIC integrates problematics related to the Oceanian way of life, local cultural anchors, social mix and integration and space management.

During the construction phase, in addition to the use of ecological, recyclable, low maintenance and, when possible, locally produced materials, SIC now equips all new housing with solar water heaters.

Two experimental pilot projects for a total of 60 homes are being conducted in the framework of the recent “ECOCAL” process implemented by the Territorial Committee for Energy Management in cooperation with ADEME. This applies to the orientation, ventilation, roof insulation and solar protection for constructions and includes an important environment component.

Photovoltic cell lighting for common elements, the use of low energy consumption lamps, rainwater catchment to water green spaces and the use of heat pumps as an economical alternative solution for sanitary hot water production are also at the study phase.

The development of tenant associations is encouraged in residential complexes. SIC initiates and participates in eco-citizen actions to protect the environment (cleaning, recycling, tree planting…).

 REGIONAL ENVIRONMENT

 Dominican Republic – Promoting the Clean Development Mechanism in Dominican Republic

Dominican Republic ratified the United Nations Framework Convention on Climate Change (adopted in Rio de Janeiro in 1992) on 7 October 1998 and the Kyoto Protocol (signed in December 1997) on 12 February 2002. The Clean Development Mechanism (CDM) is one of the tools stemming from these agreements and is based on the idea that some countries have considerable emission reducing sources which they do not need to fully exploit, whereas other countries face increasing costs for emission reductions. Emission reduction certificates are therefore issued to projects conducted between entities in industrialized and developing countries. Such projects target either reducing GHG emissions (developing sources of renewable energy, improving energy efficiency, reducing anthropic emissions) or increasing carbon stocks.

Three CDM projects have been developed in Dominican Republic to date: the el Guanillo wind farm in Montecristi, the electric light bulb replacement programme in poor quarters and the Madre de las Aguas forest project. None of these projects have yet been presented on the international emission reduction market.

AFD Group CDM strategy is based on three objectives:
Objective n° 1: Promote moderate carbon development
Objective n° 2: Link global problematics to local concerns
Objective n° 3: Support vulnerable populations.

AFD Group has the means and skills to meet these objectives: a great deal of experience in development projects, sound knowledge of the private sector, a full range of financing tools and multiple possibilities for partnerships (FGEF, World Bank, European Commission…).

It has already supported this type of project, for instance by granting a 6 million euro loan in 2004 to Durban municipality in South Africa (3 million inhabitants and 2 500 tons of waste per day) to finance a project to recover and use gas from landfills to produce electricity. The project is made profitable by the sale of certificates obtained by reducing greenhouse gas emissions.

The regional agency of Santo Domingo is currently processing three projects integrating the CDM (wind power project, solid waste management project and ethanol production project) in order to improve financial prospects for the projects and combine the private interest of promoters with the general interest of sustainable development.

Within the framework of discussions with the Dominican authorities for the implementation of budget support for the environment sector, the agency will support the Government in developing this mechanism, research for joint implementation initiatives between the Government and AFD and trading carbon credits on the emissions market.

 Agenda

Contacts

vasseurm@afd.fr   - 01 53 44 33 21
Agence Française de Développement
5, rue Roland Barthes 
75012 - Paris

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