AFD in Asia

Climate issues the priority

• An overall growth in activities, highlighting the priority AFD gives to climate issues (over 70% of its activity). This is particularly the case in China and India, where its operations now come at no cost to the French Government and support global public goods and French influence.

• The first projects planned in new countries of operation, such as Bangladesh and Burma.

• Intense project identification activities in Central Asia and the Caucasus.

• A strengthening of AFD’s traditional partnerships in Asia (Asian Development Bank, JICA) and the launch of new partnerships scaling up AFD’s presence in the region. This concerns initial contacts with Korean and Australian cooperation and the first mobilizations of European financing under the investment facilities.
 
• The strong social, economic and environmental impact of the development programs that are implemented – particularly in China to rebuild Sichuan Province – with a focus on infrastructure, sanitation and renewable energy development (biogas via the development of biodigesters in China and India).
 

New objectives, new regions in 2013

• Implementation of AFD’s new strategy for operations in Asia for 2013-2015, based on support for sustainable development and economic diplomacy, which will subsequently be translated into country strategies (initially Indonesia, Vietnam, China and India).

• New growth in activity expected, particularly with the first operations in Central Asia and the Caucasus.

• The celebration of the 20th anniversary of AFD’s presence in Asia, which began with its operations in Vietnam, Cambodia and Lao PDR in 1993.

Facilitating and scaling up the diversion of drinking water and the irrigation of new land

The additional financing will complete the Phuoc Hoa Water Resources Project cofinanced with the AsDB in 2008. This loan will finance the construction of the Duc Hoa main canal and develop the irrigated areas in Duc Hoa and Tan Bien. The River Bé’s surplus water resources will be conveyed towards the stressed Saigon and Vam Co Dong rivers. The use of this additional resource will make it possible to extend irrigated agriculture in the areas of Tan Bien (Tay Ninh Province) and Duc Hoa (Long An Province) and increase the water supply for domestic, municipal and industrial uses.

The Phuoc Hoa dam (with a capacity of 18.5 million m3), the transfer canal (with a flow of 55 m3/second) and the Tan Bien main canal were completed and commissioned in December 2011 under this project. Another facility, the Duc Hoa main canal, is currently being designed. It will convey water from one province to another (including Long An Province in the Dong Nai basin) and irrigate new land.

On the economic front, the projects in the area will increase crop yields – the vast majority are paddy fields – thanks to increased and more effective irrigation. According to the studies that have been conducted, agricultural income could increase by between 100 and 250% for some land. The drinking water supply in villages will improve hygiene conditions. The increase in river flows during the dry season will eliminate salt water intrusion caused by the sea level rise.

The project has also set up “water users’ groups” in order to learn more about and better meet the needs of the different stakeholders in the basin.

AFD is contributing to financing this project via loans amounting to €29.6m (first phase) and €20m (second phase), combined with a €500,000 grant. The additional financing is being provided by the Asian Development Bank, the Vietnamese Government and the recipient farmers for a total cost of USD 329.5m, which has been revised up following the inflation that affected Vietnam in 2008.

This mission was led by Yves Guicquéro, Deputy Director of AFD’s Asia Department, and Etienne Woitellier (Director of AFD’s agency in Bangkok). It provided the opportunity to hold discussions with all the development partners gathered in Mandalay on 15 and 16 May, as well as with several ministers from the Burmese Government (Health, Agriculture and Irrigation, Planning and Economic Development) who were met in Nay Pyi Taw, the capital of Myanmar. The mission was also able to meet the municipality of Rangoon and French NGOs working in Burma.

Following this mission, prospects for project financing were identified in the health, agriculture and water and sanitation sectors in close partnership with other stakeholders, most notably the Asian Development Bank.
Several technical missions are expected to go to Burma in the coming months to begin appraising these operations.

The official start-up of AFD’s operations in Burma should be formalized by the signing of an MOU with the Burmese authorities during the second half of the year.

Photo: Meeting with U Sein Hla Bo, agricultural advisor to the Burmese President.

Sustainable bamboo management and carbon credits

Under the French Global Environment Facility (French GEF) “Rural Carbon” project, AFD organized an international seminar on carbon credits and sustainable bamboo management in Phnom Penh (Cambodia) on 26 and 27 April 2012, in partnership with the Administrative Center for China’s Agenda 21 (ACCA21), the implementing agency for international cooperation projects under the supervision of the Chinese Ministry of Science and Technology.

Experts from France, China, India, Vietnam and Cambodia

This meeting, which on the opening day was chaired by Mr. Khong Sam Nuon, Secretary of State of the Cambodian Ministry of the Environment, gathered a number of experts from several countries (China, Cambodia, France, India and Vietnam). Representatives from several international institutions, notably FAO (Food and Agriculture Organization) and INBAR (International Network for Bamboo and Rattan) also attended, along with NGOs such as WWF and GRET, representatives from the academic world and specialized consultants (NEXUS and Carbonium).

Can China’s experience be reproduced?

These technical discussions also focused on China’s experience in promoting the reduction of CO2 emissions at its bamboo plantations, as well as methodologies developed to promote carbon credits under pilot projects supported by AFD and the French GEF in partnership with ACCA21.

Indeed, an initiative to promote carbon credits in China’s rural areas has been developed under the French GEF pilot project entitled “Rural Carbon”, which was approved in July 2010.

This project has established expert centers in Yunnan Province (Yunnan Clean Development Mechanism Service Center), which implement a new accounting methodology for carbon credits generated by bamboo plantations.

This methodology has been developed with technical assistance from the NGO TNC (The Nature Conservancy) and has led to the first carbon credit transaction for bamboo plantations in China. This transaction was conducted in March 2011 and was awarded the first Panda label, a Chinese standard on the voluntary carbon credit market developed by the China Beijing Environment Exchange and the French environmental exchange, Bluenext.

This exemplary and groundbreaking Chinese initiative aroused a great deal of interest from participants from the other countries which were present due to its potential to eventually be reproduced in other Asian countries, or in Africa. 

Photos of the field visit in Cambodia on 27 April 2012

Improving energy performance and reducing polluting emissions

An energy management center, the first of its kind in China, has been set up to optimize the energy performance of the network based on the needs of the final consumers.

Substantial energy savings have already been made (10-15%) making the investment profitable in just one heating season. Three other urban heating projects are currently being implemented in Taiyuan (provincial capital of Shanxi), Tianjin and Jinan (provincial capital of Shandong).
 

Photo of a skid for the heating network financed by AFD in Jinzhong. A skid is a compact and innovative heat exchanger unit. It is unmanned during the winter heating period as it is automatically regulated by a remote control center.

The aim of these operations is to replace inefficient small boilers or old networks with new energy-efficient collective networks, which both improves heating performance and reduces polluting emissions. The adoption of innovative technologies will also reduce energy and water consumption, as well as the floor space taken up in facilities.

Substantial energy losses

In the Northern part of China, 40% of energy consumed in the building and service sector corresponds to heating (2005, World Energy Outlook). This is partly due to the inefficiency of heating methods (low power individual boilers and substantial losses on the dilapidated networks).

The Government is therefore actively promoting collective and centralized urban heating, as well as the use of cogeneration power plants, as a heat source. Coal accounts for 70% of China’s primary balance and is the country’s main source of urban heating production, particularly in Shanxi Province, a major coal producing region.  

Purpose and objectives of urban heating projects in China

1. Decouple urban growth from greenhouse gas emissions in Shanxi Province and contribute to the Franco-Chinese bilateral climate and sustainable urban development agreements.
2. Promote reflection on the sectoral reform in order to foster technological innovations and effective network management.

Content of projects

In Jinzhong:

• Decommissioning of 677 small boilers and 8 district boilers.
• Construction of the first phase of a heating network equipped with heat exchanger units (substations) and supplied by a newly-built cogeneration power plant. The project aims to serve an area of 10 million m².

In Taiyuan:

• Decommissioning of 254 small boilers.
• Construction of three levels of urban heating networks: a primary network (10 km from the power plant to a pressure isolation plant), a secondary network (44 km between this isolation plant and 75 substations) and part of the tertiary network (from these substations to users). This network will be supplied by a cogeneration power plant and will serve an area of 11 million m². The heating network is expected to operate at 50% of its capacity in 2012 and to be completed in 2013.

In Jinan:

• Replacement of steam networks (energy losses in the region of 30%) by water networks (losses in the region of 5%);
• Water pipe insulation with direct burial;
• Installation of an automated control center combined with an energy management center.

In Tianjin:

• Replacement of inefficient boilers by a large boiler plant with a yield of roughly 85%;
• Construction of compact and automated heat exchanger units, including the most efficient equipment available;
• Water pipe insulation with direct burial;
• Installation of an automated control center combined with an energy management center.

Technical assistance

In addition to the AFD loan earmarked to purchase equipment, the technical assistance provided under the projects has supported the creation of an energy management center in Jinzhong, which regulates the supply of heat on the basis of effective final consumer demand and optimizes energy and water consumption thanks to intelligent network management. In Taiyuan, the technical assistance has helped improve the project design in order to increase energy efficiency on the network. 

Main expected impacts

The replacement of small boilers in Shanxi Province (in Taiyuan and Jinzhong) is expected to annually avoid 400,000 teq CO² of emissions for each project during the lifespan of the networks, i.e. 25 to 30 years, and to substantially reduce polluting emissions (3,440 tons of SO² and 6,150 tons of soot).

These projects therefore have a positive impact on public health and make living conditions more comfortable for the local community. Their pioneering nature has raised the awareness of other sector stakeholders, such as the World Bank and Asian Development Bank, who made a field visit to observe the performance of the solutions adopted in order to replicate them in China.

In Jinan and Tianjin, the main impacts of the program stem from the energy efficiency gains due to the construction of efficient heating networks and the replacement of old obsolete boilers, leading to substantial fuel savings. The reduction of CO² emissions is estimated at 135,000 tons a year. In addition, the construction of a large boiler plant, equipped with pollution control systems for gaseous discharges, should lead to a reduction of 1,170 tons of SO² emissions and 3,600 tons of soot.  

"Loan provided by AFD". Signing ceremony for the loan allocated by AFD for the urban heating project in Jinzhong

Through this project, AFD has enabled a Sino-French partnership to come into being, involving the French companies Schneider Electric and Salmson.

Nevertheless, the issue of evaluating public policies is neither a new idea, nor a novel practice. It becomes increasingly essential, however, to determine whether the evaluation task is properly conducted. We need to discuss whether the way evaluations are undertaken produces an accumulation of knowledge that is accessible to decision makers, or whether the context in which development policies are implemented severely reduces the usefulness of past experiences for designing future projects.
Can we learn from our own and others’ experiences in the field of development? If so, how can evaluation contribute and how is it that we seem unable to translate these experiences into practice? If not, what are the factors hampering the learning process?

Conference Center Pierre Mendès-France Ministère de l’Economie, des Finances et de l’Industrie , Paris