AFD in Asia

What is the aim of AFD’s presence in China?
Our main aim is to support China’s transition towards an economy that saves natural resources and emits less greenhouse gas.
Since the Beijing agency opened in 2004, we have financed 17 projects that contribute to the fight against climate change and to sustainable development.
This is the main area for Franco-Chinese cooperation that was defined when President Sarkozy visited China in November 2007 and was subsequently set out in several agreements signed between the French Ministry of Ecology and its Chinese partners.
Through the projects we finance, our aim is also to promote the emergence of Franco-Chinese partnerships that highlight French expertise and stakeholders in the green sector.
Finally, we give priority to innovative operations that bring about change and use techniques and good practices that can subsequently be reproduced, not only in China, but in other countries facing similar challenges.


Can you give us a few examples of the projects that AFD supports in China?
Our cooperation for the “rural carbon” project aims to reduce greenhouse gas emissions in rural areas through carbon finance. It specifically involves projects to build biodigesters and a reforestation program in two of China’s poorest provinces, Yunnan and Sichuan.
This program has developed a methodology for bamboo replanting and for methane recovery using individual biodigesters.
One of our main common objectives is to capitalize on the experience and know-how acquired in order to study the potential of reproducing this initiative in Sub-Saharan Africa.
The project to rebuild post-earthquake Sichuan is a particularly emblematic operation. This program comes in the aftermath of the devastating earthquake measuring 8 on the Richter scale which struck China in 2008. AFD has supported the efforts made by Sichuan Province, the worst affected by the earthquake, by providing a USD200 million loan to help finance the reconstruction works, alongside the World Bank, Asian Development Bank and European Investment Bank.
Our program comprised two main components: a “biogas” component, which has now reached completion, has installed roughly 100,000 biodigester units in rural areas, with PVC covers being used for a large-scale program for the first time.
This new technique makes big improvements to biodigester efficiency and also extends their lifespan. These facilities provide families with enough gas to prepare their daily meals.
AFD’s financing has also served to rebuild basic infrastructure – water, sanitation, waste treatment, roads and bridges – and to make a practical construction guide for villagers affected by the earthquake. The guide contains energy efficiency and seismic resistance measures and was designed under a Franco-Chinese partnership between a French architecture firm and the Chinese design institute, Xinan.

Another flagship project is our cooperation for sustainable rural development, which aims to reduce greenhouse gas emissions through carbon finance. In addition to the biodigesters, a reforestation program is being conducted in two of China’s poorest provinces, Yunnan and Sichuan. This operation is supported by the French Global Environment Facility (French GEF) and is being implemented with the official agency in charge of China’s Agenda 21 (ACCA21), which reports to the Chinese Ministry of Science and Technology. It has developed a methodology for bamboo replanting and methane recovery from individual biodigesters.
One of our main objectives with ACCA21 is to capitalize on the experience and know-how acquired under this initiative in order to study its potential of being reproduced in other developing countries, Southeast Asia and Sub-Saharan Africa.
AFD also conducts cooperation activities in the sustainable urban development sector. China’s efforts in this sector will be decisive for the future of the climate. Indeed, the number of new urban dwellers in China over the next 25 years is estimated at between 200 and 300 million. And yet there is currently no model for low-carbon cities. The construction of cities at such a pace and on such a scale has never been seen before in the history of mankind. AFD is participating in this process by financing a pilot program for thermal upgrading in public buildings in the metropolis of Wuhan in central China.
This project will save energy and reduce CO2 emissions in 30 public buildings and is in line with an innovative approach in China based on the energy performance contract. The principle is as follows: by reducing the energy bill, the project beneficiary will be able to repay the AFD loan. This type of mechanism can then be reproduced in other neighborhoods and other cities where there are also major needs for renovation.


What would be your assessment of these projects and what are the prospects for AFD in China?
In a relatively short period of time, we have managed to build a quality partnership with China, both at the central level with our partners in the ministries and at the local level with the provinces and municipalities where we operate.
Our activities have highlighted French know-how and expertise, which are highly appreciated. This constructive dialogue on concrete and innovative projects has helped establish a relationship of trust with China.
It promotes the adoption in the field of technical practices and solutions that aim to reduce its energy consumption, control its urban expansion and preserve its natural resources and its biodiversity. Helping China to meet its environmental challenges and move on to a low-carbon growth path contributes to preserving global balance.
Finally, China is currently a real high-speed laboratory in the fight against climate change and in sustainable development. By supporting it in this process, we can design new clean development models from which we can learn lessons. This helps to guide our international cooperation in other geographical areas.
 

Il existe une forte convergence des thématiques touchant au développement des pays de l’Asie centrale et du Caucase qui ont acquis leur indépendance il y a près de vingt ans, après l’éclatement de l’Union soviétique. Leurs trajectoires politiques et économiques présentent cependant des divergences significatives.

Les pays du sud Caucase aspirent plus spécifiquement à un arrimage européen, et les grands enjeux de développement de la région s’articulent autour d’une consolidation des reformes conduites dans le sens d’un rapprochement aux standards européens, y compris en termes de transparence et de conformité environnementale et sociale. Dans ce contexte, l’arrivée d’un bailleur de fonds comme l’Agence Française de Développement revêt un sens particulier.

De son coté le Bangladesh est confronté à de fortes problématiques énergétiques, de transport, d’eau et d’assainissement, et plus généralement environnementales.

Les six pays relèvent du mandat de l’AFD visant à la promotion d’une croissance verte et solidaire et sont intéressés par le savoir-faire de l’Agence notamment dans le domaine des infrastructures urbaines et plus particulièrement des transports. Les secteurs de l’eau, de l’assainissement et du traitement des déchets nécessiteront en particulier de lourds investissements dans les années à venir. L’expertise de l’Agence est également attendue en appui du secteur privé et sur les problématiques de restructuration des secteurs agricoles.

►Download the Annual Report 2010 in French (PDF)

2010: a new year of growth to support development

With €832 million of budget resources allocated by the State, AFD provided €6.8 billion of project financing in 2010, i.e. an 11% rise on 2009. Its activity accounted for 28% of France’s official development assistance. AFD also paid back €104 million of dividends to the State.

Africa remains the priority with €2.1 billion of financing in 2010.

Two-thirds of the financing break down between infrastructure, urban development, productive sectors and agriculture.

In 2010, AFD’s financing will contribute to:

• Improving drinking water supply systems for 33 million people
• Getting 13.4 million children into primary school
• Upgrading or building transport hubs that will be used by 85.8 million passengers a year
• Supporting energy efficiency by saving 5 million tons of CO2 a year
• Providing access to electrification for 3 million people
• Allocating microfinance loans that will benefit just over 700 000 people
• Supporting agricultural or irrigation projects that will benefit 1.4 million people

2011: consolidation of economic model

Dov ZERAH, Chief Executive Officer of AFD: “AFD has experienced a veritable revolution over the past few years. It has become a key player in development with an activity that has tripled in five years. Today, a new phase is beginning with the consolidation of our model.”

In the coming years, AFD will be focusing its activity on three priority areas:

• Sub-Saharan Africa:  60% of resources allocated to AFD by the State will be earmarked for this region, particularly for the sectors of agriculture and agro-industries, infrastructure, education and health.
• The Mediterranean: AFD will be supporting the recent developments in the region by scaling up its operations in Mediterranean Basin countries, particularly in the productive and vocational training sectors.
• Emerging countries: AFD will be supporting these countries via loans with a low level of concessionality in order to encourage them to set out on a growth path that respects the environment more and is more inclusive.

Consolidating the model requires stabilizing AFD’s level of activity, which is expected to reach €8 billion by 2013. AFD set up a Risk Department in 2011 in order to improve risk management. It has also reinforced its human capital with 125 recruitments in 2010.

Dov ZERAH: “Beyond financing, it is our expertise that our partners are seeking. AFD will also be continuing to actively provide input to international debates through its knowledge production. We will, at the same time, be forging an increasing number of partnerships with other development players such as NGOs, local authorities, private foundations, or again multilateral banks. They help increase the outreach and effectiveness of our actions. In a globalized world, the only winning strategies are cooperation strategies.”

In 2011, AFD will be celebrating the 70th anniversary of its creation in 1941 by General de Gaulle. AFD will be marking the occasion by organizing events to meet the French public in order to raise their awareness of North-South issues and allow them to learn more about development results. A travelling open-air exhibition called “Objectif Développement”, designed in partnership with Magnum Photos, will be launched in Bordeaux on 21 May 2011. It will be travelling to all the major cities in France throughout the year.

 
Agence Française de Développement (AFD) is a public development finance institution that has been working to fight poverty and support economic growth in developing countries and the French Overseas Communities for 70 years. It implements the development policy defined by the French Government.
With agencies in over 50 countries, AFD finances and supports projects that improve people’s living conditions, promote economic growth and protect the planet: getting children into school, support for farmers and small businesses, water supply, tropical forest preservation, fight against climate change…

The study seeks to assess the impact that private sector participation in the Indian power sector has on the environment. We examine this aspect of the linkages between the trends in reforms and GHG emissions using Central Electricity Authority (CEA) data on specific emissions. The CEA’s General Review Data is also analysed to study the trends in fuel choices for the three sets of generating plants in the central, state and private sectors.