On the occasion of the official visit of the kenyan president Uhuru Kenyatta in France, AFD strengthens its support to the development of the kenyan electricity sector by the signing of new operations amounting to a total of 180 million euros.
Speed up access to energy for Kenyans
A memorandum of understanding for the provision of 90 million euros to support the new electrification policy of the country was signed between AFD and Kenya. Indeed, the kenyan authorities are seeking to achieve universal access to electricity in the coming years and have developed an ambitious nationwide program. The resources made available to the Kenyan authorities are a 90 million euro loan from AFD and a 30 million euro grant from the European Union (financing facility of infrastructure in Africa, EU-ITF) whose management has been delegated to AFD. The funds provided by AFD could electrify up to 1.3 million people spread over a large part of the Kenyan territory.
60 million euros to finance the wind farm
In addition, a memorandum of understanding was signed with Mr. Albert MUGO, Managing Director and CEO of KenGen, a company owned 70% by the Kenyan state, operating in the electricity production sector and providing three-quarters of the country's supply. The signed MoU aims to make available to KenGen 60 million euros to finance the wind farm in Meru County. With the expected co-financing of the German cooperation (KfW), it is expected that the Meru wind farm will provide up to 80 MW of generation capacity.
90% of Kenya's electricity comes from renewable resources
This will strengthen the positioning of Kenya as a model for countries able to combine development and the fight against climate change: indeed, its electricity is for over 90% derived from renewable sources, as geothermal indeed provides half of the electricity consumed followed by hydropower accounting for about 40% of consumption. The financing provided by AFD to KenGen is a direct loan without guarantee of the Kenyan State; the planned mobilization of such a financial tool illustrates the excellent performance of KenGen, as well as the AFD’s confidence in the company and in general in Kenya's power sector.
Fifty years of partnership
These new projects are in the long-term partnership developed between the Kenyan authorities with AFD in the energy sector. Since the beginning of its activity in Kenya in early 2000, AFD committed over 800 million € of loans to the Kenyan power sector, spread across the entire industry value chain: drilling for the development of geothermal energy, renewable energy plants, national grid and interconnection with Ethiopia, electrification in rural areas and in urban areas, and even support for investment in the sector by SMEs. France is among the biggest financiers of the sector.
Just like all the projects supported by AFD in Kenya in this field, the operations signed this April 4 are aligned with the key pillars of France's cooperation policy in the energy sector, i / promoting access to electricity for all, ii / supporting sustainable economic development, and in particular iii / supporting the development of renewable energy to contribute to the fight against climate change.
The two signings were held at the Elysée Palace between the AFD’s Deputy Chief Executive Officer, Mr. Jacques Moineville, in the presence of Kenya's president of the Republic, Mr. Uhuru Kenyatta and the president of the french Republic, Mr. François Hollande.
Anne Paugam, Chief Executive Officer of AFD, presented today the key figures for the public institution’s activity in 2015. It has achieved a record year with EUR 8.3bn of commitments, up 15% since 2012, for a more just and more sustainable world. It is a record year in terms of the volumes of commitments for Africa, Asia, the Middle East and Latin America, as well as for the French overseas territories, and in particular for financing that has an impact on both development and the climate.
“2015 is a record year for AFD in terms of the amount of commitments for sustainable solutions to fight poverty and inequalities and for a more just and balanced globalization, as well as a year which has structured the international development agenda. The Addis Ababa Conference on Financing for Sustainable Development, the adoption of the SDGs in New York, and COP21 on the climate in Paris have defined a new universal framework, which concerns the entire planet”, said Anne Paugam, Chief Executive Officer of AFD. “AFD’s action, which is conducted for the benefit of people in our partner countries, contributes to a more just globalization and more sustainable development. This action is also in the interests of the French. This is, for example, clear for French people on climate and migration issues.”
“The French President’s decisions announced in September 2015, and the ambitious targets of increasing AFD’s commitments by 50% by 2020, bring the institution up to a level to meet the challenges of the 21st century. They provide a concrete response to the challenges facing the world today, where taking action in the South requires addressing the challenges which France is already facing. This mobilization offers prospects to meet the universal challenges posed by the Sustainable Development Goals”, she continues.
The new international development agenda confirms the relevance of AFD’s position, which already reflects the universality of the SDGs. AFD operates with the same philosophy in the French overseas territories and developing countries, on every continent, with a single mandate to finance sustainable development. AFD innovates in its operations in order to implement new development models, align social standards at a higher level, and address environmental challenges, especially the fight against climate change.
Milestone year for the climate
Throughout the year, AFD has demonstrated that there are concrete solutions, reconciling the climate and development, to address the challenges of climate change, which concern the entire planet. In 2015, 55% of AFD’s financing had positive impacts on the fight against climate change.
Porto-Novo, Green City: AFD, alongside the Urban Communities of Cergy-Pontoise and Greater Lyon, has provided EUR 9.2m of financing to the Benin municipality for the preparation of a sustainable urban development plan. The aim is to turn Porto-Novo into a resilient city, adapted to climate change, and concerned about preserving its environment. The project includes the development and environmental protection of the banks of lagoons and poor neighborhoods, by developing access roads to the banks and supporting income-generating activities (market gardening, fish farming).
Sub-Saharan Africa: A priority
In 2015, financing in Sub-Saharan Africa reached a record volume of EUR 3.1bn, i.e. 38% of AFD’s commitments, up 6% compared to 2014. Sub-Saharan Africa accounted for 81% of the State’s financial efforts in 2015. Over half the projects supported by AFD concern the development of infrastructure, which opens up access to essential services, allows the growth of sustainable cities, family farming, the preservation of natural resources, and the development of job-creating companies. Strengthening human capital via education, vocational training, social protection and health are the other key sectors for operations. In September 2015, AFD adopted a 5-year Sahel Regional Action Plan. This specific strategy for operations will be implemented in consultation with NGOs on the basis of three priority areas: employment, demography and the integration of territories.
Fight against yellow fever: WHO estimates that every year there are 200,000 cases of yellow fever and 30,000 deaths caused by this disease for which there is no treatment. Africa is particularly affected (90% of cases). AFD is supporting the Institut Pasteur Foundation in Dakar (FIPD), the only vaccine production unit based in Africa, with a EUR 6.5m subsidized loan. This loan will finance the creation of a new vaccine production unit, and will thereby permanently reinforce the fight against the disease.
Need to be agile to address crises and vulnerabilities
Crises can no longer be considered as an exception. Some 2.6 billion people have been affected by a natural disaster over the past 10 years, and over 1.5 billion people are currently living in countries affected by a violent conflict. AFD adapts its operating methods in crisis areas. Firstly, by reinforcing the coordination with France’s humanitarian and security interventions. Secondly, by targeting operations that have an impact on both the development of a region (to strengthen the adaptation and prevention capacity) and on the vulnerabilities which fuel the crisis (to address the causes).
AFD has allocated a total of EUR 5m to the NGOs Amel, Arcenciel and Première Urgence Internationale in order to provide long-term support to Lebanon and Jordan. Several areas in the countries, which experience water shortages, an increase in sanitation needs, and a saturation of education and health facilities, will benefit from a reinforcement of social services for the host populations and vulnerable refugees, and psychological and social care for traumatized populations, via individual and collective actions (families and communities).
AFD’s actions bring about concrete impacts. Between 2013 and 2015, ongoing projects have:
- Got 2.6 million children into primary and secondary school;
- Improved housing for 2.6 million people;
- Provided 3.8 million people with access to a permanent source of drinking water;
- Supported the development of 150,000 small businesses;
- Assisted 710,000 family farms;
- Conserved and sustainably managed 34 million hectares of natural areas, thereby preserving biodiversity.
An agency with a capacity to meet the challenges
In September 2015, the French President announced a new objective for France’s development policy, by giving its bilateral instrument AFD the additional capacity to meet the challenges of the new international development and climate agenda adopted in 2015, and establishing closer ties with CDC Group. To achieve this, AFD Group’s capacity for operations will increase by 50% to EUR 12.5bn by 2020, and its capital will double in 2016. Loan financing for developing countries and international solidarity will increase by EUR 4bn by 2020, including EUR 2bn for the fight against climate change and its consequences, while grants will increase by some EUR 400m.
“AFD Group will thereby reach a new scale and will continue to be a key actor in concert with development actors, working for France’s foreign policy and influence, and for the benefit of the French. The implementation of this has been initiated. Its activity will already increase by EUR 700m in 2016 to EUR 9bn of activity”, adds Anne Paugam.
AFD has launched the SUNREF website for its partners and green finance actors. The aim of this website is to be a platform to exchange ideas, share, and take action, while being an ecosystem for green finance by disseminating knowledge and creating networks among actors in the sector. It will also provide information on the projects and partners of this innovative program.
Seizing the opportunities of the ecological transition
The transition towards a greener model holds considerable economic development potential. Green growth provides the private sector with a number of opportunities in the fields of energy management, sustainable natural resources management and environmental protection. In Southern countries, financing this green growth poses a major challenge to which AFD contributes, thanks to the SUNREF program, in partnership with green finance actors (banks, companies, public authorities, donors…).
Green credit line for the private sector accessible via partner banks
The aim of the SUNREF (Sustainable Use of Natural Resources and Energy Finance) program, AFD’s green finance label, is to facilitate access to affordable sustainable energy in order to ensure the development of a low-carbon economy and contribute to mitigating the causes of climate change.
SUNREF helps private actors in Southern countries seize the opportunities of the ecological transition and encourages local banks to finance it on customized financial terms. This innovative range of services consequently gives the private sector greater access to bank financing to purchase better quality equipment, and thereby make savings and increase its competitiveness, thanks to better energy management and by taking the environment into account.
SUNREF also offers its partners an integrated approach which aims to strengthen the capacities of all actors, thanks to a technical assistance program whose role is to support and boost the market for financing green investments: assisting banks in project financing and helping companies implement strategies for an optimized use of energy and natural resources.
SUNREF website: A platform dedicated to green finance
AFD has made a dedicated platform available to green finance actors (banks, companies, donors, public authorities) which allows them to collect, disseminate and capitalize on best practices. The SUNREF website is thereby an ecosystem for green finance which provides actors in the sector with new opportunities to implement innovative and effective operational approaches. Finally, this website gives an additional understanding of the green finance projects implemented by AFD, the green investments made in Africa, the Indian Ocean, Latin America, Asia and the Mediterranean, SUNREF’s innovative approach and its benefits, its partners, and the types of eligible financing. SUNREF’s aim is to pool the efforts of all actors in order to facilitate the scaling up which is essential for addressing the environmental challenges.
For further information ► www.sunref.org
SUNREF (Sustainable Use of Natural Resources and Energy Finance) is AFD’s green finance label. In a context of energy and environmental transition, SUNREF helps private actors in Southern countries seize the opportunities of this transition via an innovative approach and encourages local banks to finance it. To date, 42 SUNREF projects have been successfully implemented since 2006, in partnership with 70 local banks in some 30 countries of operation, for a total commitment of over EUR 2.5bn of loans allocated by AFD, including EUR 1.2bn already disbursed.