AFD’s One Planet Summit Commitments: Tracking Our Progress

DECLARATION

AFD is committed to becoming the first “100% Paris Agreement” financial institution. The aim is to ensure that all funding is consistent with low-carbon and climate change-resilient development in the countries where we work.

WHERE DO WE STAND?

We have adapted our internal procedures. For each project we finance, AFD now checks that it is compatible with the climate goals of the country in which it is carried out. Projects likely to receive a negative assessment are abandoned very early in the internal decision process.

NEXT STEPS

The Paris Agreement also calls for countries to plan long-term low-carbon development trajectories for 2050. However, some countries have not yet produced their roadmap. AFD is therefore performing its own “country analyses”. The aim is to avoid involving countries in projects that are potentially incompatible with their future climate goals. Seventy-four of the 100 planned country analyses have already been completed.

DECLARATION

Twenty-six development bank members of the International Development Finance Club (IDFC) and Multilateral Development Banks (BMD) have committed to aligning their financial flows with the requirements of the Paris Agreement on climate change. This includes implementing “more explicit policies to significantly reduce reliance on fossil fuels and rapidly accelerate financing for renewables,” according to their joint declaration.

WHERE DO WE STAND?

The banks involved continue to advance in identifying a methodology to make their financial flows compatible with low-carbon, climate change-resilient development. 

In December 2018, at COP24 in Poland, IDFC members published a Position Paper clarifying the meaning of alignment, in relation to the joint declaration, based on six main ideas (climate financing, country-led strategies, the private sector, adaptation and resilience, the energy transition and internal transformation). At the same time, multilateral banks published a framework for alignment comprised of six building blocks. The underlying principles of each building block were unveiled at COP25 in Madrid. 

In September 2019, at the Climate Action Summit chaired by the UN Secretary General in New York, IDFC also pledged more than $1 billion in climate financing by 2025, with a greater proportion to be spent on climate change adaptation. During this Summit, IDFC published a study, commissioned by the European Climate Foundation and conducted by I4CE and the CPI, on the operationalization of the process of alignment with the Paris Agreement for Club members. The study comprised of two parts:

• The first part established a theoretical and conceptual basis for alignment, analyzing and describing the emerging interpretations of the definitions, principles, and approaches across the financial community, and building on the experience of the Climate Action in Financial Institutions initiative. 
• The second part identified the changes the Paris Agreement implies for the role of Development Finance Institutions (DFI)—specifically, members of the IDFC—and looked at how they may implement these changes, through a targeted set of activities. This part was based on interviews with a sample group of eight participating IDFC members: AFD, CABEI, CAF, CDG, DBSA, JICA, KfW, and PT SMI.

At the Finance in Common Summit held on November 11 and 12, 2020, which was the first ever meeting of 450 public development banks, under the patronage of Emmanuel Macron and in the presence of the UNSG, Heads of State and civil society representatives, the IDFC members reaffirmed their previous commitments by making a joint declaration. New measures were presented, including tools to operationalize the process of alignment with the Paris Agreement, the consideration of social issues amid COVID-19; and the link between climate change and biodiversity. The Club also announced the publication of the annual IDFC Green Finance Mapping Report, with climate financing increased to $187 billion in 2019, the creation of the IDFC Climate Facility, and the strategic partnership with the Green Climate Fund (GCF), demonstrated by the release of a joint study on the potential of public development banks in financing green and resilient transitioning.
 

NEXT STEPS

In 2021, IDFC members will continue to work on alignment by defining an operational framework and practical tools that will be available to Club members. In addition, the IDFC Climate Facility will be organizing capacity-building and peer-to-peer discussion activities on climate change, and providing greater access to Green Finance Fund’s resources for some members. 2021 will be a pilot year for MDBs to implement their framework, with a new report due to be published at COP26. 

DECLARATION

Starting in 2020, AFD will invest €1.5 billion each year to finance the adaptation of countries vulnerable to climate change.

WHERE DO WE STAND?

Not only was this goal met in 2018, two years early, but it was even exceeded: last year, AFD invested €1.6 billion in adaptation (€750 million on the African continent), an increase of 45% over 2017.

NEXT STEPS

AFD will continue its plan to allocate at least €1.5 billion each year to finance the adaptation of countries vulnerable to climate change.

DECLARATION

In 2017, AFD launched its “Adapt’Action” Facility, endowed with €30 million over four years. It is designed to support 15 countries and regional organizations that are especially vulnerable to the effects of climate change as they implement and revise their climate commitments, within the framework of the Paris Agreement.

WHERE DO WE STAND?

More than 50 studies and capacity-building activities are either ongoing or will be completed by the end of 2020.

The goal in terms of project leverage has been exceeded: seven projects, financed by AFD or financed with other partners (Green Climate Fund, European Union), amounting to a total of €550 million, have already been approved by the Board of Directors. 

The project has also highlighted the importance of knowledge-sharing and the development of support mechanisms, notably with the organization of a first webinar on an innovative approach (Forecast-based Early Action) to reduce the impact of disasters.
 

NEXT STEPS

Capitalization research will be conducted to identify best fit practices and lessons learned from the Adapt'Action Facility since its launch in 2017, which will be presented at COP26. The aim is to produce recommendations on transformational actions for the next round of projects or for other similar Facilities.

DECLARATION

The 2050 Facility, which will ultimately be endowed with €30 million, provides several countries with support to develop low-carbon, resilient long-term development strategies—targeting 2050, as called for in the Paris Agreement on climate change (Article 4.19).

WHERE DO WE STAND?

Following the initial allocation of a €10 million grant in July 2018, support is currently being provided in the following countries: Algeria, China, Colombia, Côte d’Ivoire, India, Indonesia, Mexico, Morocco, Namibia, Nigeria, Pakistan, Senegal and Vietnam.

The activities supported by the 2050 Facility include assessing the socio-economic impacts of climate change (GEMMES model), supporting energy transition policies, analyzing decarbonization trajectories and developing long-term strategies. 

A second tranche of €20 million was approved in December 2019 and new countries have been identified for support: Bangladesh, Brazil, Cambodia, Costa Rica, Ecuador and Mozambique.

NEXT STEPS

These new support mechanisms are currently being formalized and others are planned for implementation in countries which have expressed an interest in the 2050 Facility and want to set more ambitious goals for climate action.

DECLARATION

The Kiwa Initiative provides financing for climate change adaptation and biodiversity protection through nature-based solutions in small island Pacific states and territories. 

WHERE DO WE STAND?

Announced by the President of the French Republic at the 2017 “One Planet Summit”, Kiwa was officially launched in March 2020 (see press release).
This initiative has been allocated €35 million in grants. 
Financing for the project has come from an exceptional alliance between Australia (€0.65 million), Canada (€6.8 million), France (€13 million), New Zealand (€0.65 million) and the European Union (€13.9 million). In 2020, 18 Pacific Island States and Territories are being targeted by the initiative, including 3 French overseas territories, New Caledonia, French Polynesia and Wallis and Futuna.

The Kiwa Initiative aims to facilitate access to green financing for Pacific communities and to promote collaboration between regional and international financial partners, as well as regional cooperation. 

Project leaders include national and local authorities, public institutions, local and international non-governmental organizations (NGOs) and regional or international organizations operating in the regions concerned.

As part of these projects, biodiversity conservation measures must be taken for climate change adaptation through nature-based solutions (NBS).  Projects supported by the Kiwa Initiative will focus in particular on the themes of biodiversity conservation, climate change resilience, economic resilience, people and economy, reduction of social inequalities and gender equality. 

AFD's aim is to ensure that the Kiwa Initiative provides support to all Pacific Islanders, by fostering partnerships and cooperation, in order to become the main biodiversity conservation financing mechanism for climate change adaptation in the Pacific region.  
 

NEXT STEPS

Several projects of varying sizes and based on nature-based solutions are currently being developed (such as integrated coastal area management, protected marine and terrestrial areas, the fight against invasive alien species, fisheries management and ecotourism).

The launch of the first call for projects for local NGOs and the operational phase of the first regional projects are scheduled for the first half of 2021. 

DECLARATION

Each year, more than 12 million hectares of land are lost to degradation, no longer able to provide their range of ecosystem services. This is due to unsustainable agricultural practices, pollution and deforestation leading to their depletion or erosion. This is a direct threat to biodiversity and the food security of nearly one billion people.
At the One Planet Summit in Paris, AFD, as the lead investor, announced its contribution to the Land Degradation Neutrality (LDN) Fund, created in 2015 by the United Nations Convention to Combat Desertification (CNULCD) in order to achieve neutrality in terms of soil and forest degradation by 2030.

WHERE DO WE STAND?

AFD has invested €7 million ($7.9 million) in the LDN fund, in a junior tranche (which covers initial losses), and €3 million in technical support, (i.e. almost $11.3 million in total), to help identify the best sustainable agroforestry and land restoration projects. This technical support is provided on an ongoing basis in collaboration with the operator IDH and is currently supporting 11 project leaders around the world with their agroforestry or sustainable forestry projects. 

NEXT STEPS

Operational since December 2018, the LDN Fund has continued to raise financing, having increased from $60 million at the first closing to around $140 million today. This fundraising is still in progress, with a final closing expected at the end of this year. Following the example of DEFRA, which invested £10 million ($13 million) in a junior tranche of the fund, another member government of OECD is now currently considering a junior tranche investment. With this injection of public money, LDN has already managed to attract several private institutional investors. The fund has set a target of between $200 and $300 million, and is on track to reach this objective.

With such large-scale financing, the executive can consolidate its strategy of investing in major agroforestry projects (scaling-up), making this an exceptional fund, as most existing agroforestry funds are smaller in size. In the meantime, the executive has already been making investments at a brisk pace, with the first projects having already received financing, such as the sustainable coffee and cocoa plantations in Latin America (in partnership with local indigenous communities), the hazelnut plantations in Bhutan, the various tree-planting initiatives (Teak, Eucalyptus, Acacia) in Ghana and Sierra Leone, and the small-scale agroforestry programs in Kenya.  

DECLARATION

AFD, Bpifrance, Caisse des Dépôts, the Fonds de Réserve pour les Retraites and the Etablissement de Retraite Additionnelle de la Fonction Publique have signed a charter that binds these French public investors to six climate-related principles.

WHERE DO WE STAND?

AFD is already applying the principles of the Charter.
 

DECLARATION

A coalition of philanthropists and governments was launched to accelerate the implementation and storage of renewables, fight air pollution, and develop agricultural models that are resistant to climate change.

WHERE DO WE STAND?

AFD has built relationships with a number of foundations involved in the Task Force on Philanthropic Innovation, launched at the 2017 One Planet Summit. Led by the European Climate Foundation which provided the secretariat, this Task Force brought together members of 12 foundations and 3 governments (France, the United Kingdom and Canada) with the aim of developing innovative collaborative initiatives to promote renewable energy, aid quality, resilient agriculture and the mobilization of public/private financing. This work resulted in a multi-stakeholder partnership between the Children’s Investment Fund Foundation (CIFF), IKEA and Germany (BMU), focused on the energy transition in Southeast Asian countries, for which $40 million has already been set aside. The partnership is beginning to implement its operational activities in Vietnam, the Philippines and Indonesia, and will be formally launched at the ASEAN Energy Business Forum on November 19.

NEXT STEPS

The Task Force no longer exists today, the Secretariat that ran it (hosted by the ECF) has been shut down. It published a final report in December 2019, which reviewed the results of the various working groups set up. Some of the working groups that were created as part of the Task Force’s work have produced concrete initiatives, particularly in the following fields: 

• Energy: the launch of a Southeast Asia Energy Transition Partnership 
• Air quality: the creation of a “Clean Air Fund” 
• Blended Finance: the launch of a “climate finance partnership” with Blackrock  

DECLARATION

At the One Planet Summit in Nairobi on March 14, 2019, AFD announced the creation of a Biodiversity Facility, now called BIODEV2030, to help 16 countries to define voluntary multi-stakeholder sector-specific commitments as part of a development trajectory compatible with biodiversity conservation.

This project has been divided into three key stages:

1. Identify the main threats to their natural resources in relation to their development trajectories and the opportunities presented by the sustainable management of these resources;
2. Assist with the definition of concrete objectives for each country, tailored to its specific challenges;
3. Support the formulation of voluntary sector-specific multi-country commitments based on voluntary commitments defined at national level.

It is endowed with €10 million and will be rolled out in collaboration with WWF and IUCN, which specialize in protecting our living environment.

WHERE DO WE STAND? 

In operational terms, 10 countries out of 16 are already participating in the process and have begun the assessment phases, which will be followed by the discussion phases during which the following commitments will be defined:

1. Scientific assessments: Detailed studies on countries' natural resources, their level of vulnerability and sources of pressure are currently being finalized;
2. Sector-specific assessments: Research is ongoing on the impacts and opportunities relating to transformational changes in one or two economic sectors (factors in biodiversity loss), as well as to identify key stakeholders (public, private, associations, etc.) so that the discussion phases can be organized;

NEXT STEPS

1. Multi-stakeholder dialogue and negotiations: Multi-stakeholder consultation workshops will be organized from the first half of 2021 onwards to define potential targets for reducing biodiversity pressures and to develop voluntary sector-specific commitments to be put forward by stakeholders at the CDB COP15;
2. Integration and ownership of commitments: Following the official decisions made at the CBD COP15, the project will involve a revision of the voluntary commitments for biodiversity in the target countries and will aim to prepare for the implementation of these commitments during the first half of 2022.

DECLARATION

Announced by President Emmanuel Macron at the One Planet Summit 2019, France has increased its commitment to solar energy development in emerging countries from €1 billion to €1.5 billion. As a result of this decision, Agence Française de Développement (AFD) has been able to commit an additional €500 million to solar projects between now and 2022. 

WHERE DO WE STAND?

Between 2016 and 2019, AFD and Proparco allocated a total of €1.156 billion in solar energy grants. Fifty-three projects have been completed or are currently being implemented in 32 countries. These States are members of the International Solar Alliance (ISA), a coalition launched by France and India at COP 21 in 2015.

NEXT STEPS

By increasing its commitments and mobilizing more resources, AFD will be able to ramp up its financing of solar projects. Thus, AFD will demonstrate its capacity to significantly increase the share of renewables in energy production, an essential strategy to support countries in their efforts to achieve low-carbon development.

For example, in October 2020, Mozambique launched a call for expressions of interest to recruit a private operator for the construction of a 40 MW solar power plant in Dondo. This project represents the first stage in the PROLER program, an initiative supported by the European Union and AFD, which over the long term, will provide an energy capacity of 120 MW of solar power and 40 MW of wind power.