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China
Since 2004, AFD has been working in partnership with the Chinese authorities to develop cooperation activities for sustainable development and the fight against climate change. The projects financed by AFD, via loans on market terms, mobilize French expertise and know-how for the cooperation with China to conserve biodiversity and combat climate change. No French taxpayers’ money is used for these activities.
At the French government’s request, AFD is gradually ending new project financing in China. It will continue implementing existing projects in accordance with its contractual commitments.
Context
Located in East Asia, China is the second most populated country on earth (1.4 billion inhabitants). It is also a huge territory with an exceptional natural and cultural heritage.
In the past few decades, China has experienced unprecedented economic and social development and has become the second largest economic power in the world. But the country is also the biggest emitter of greenhouse gases. Due to severely polluted air, water and soils, ecosystems and biodiversity are rapidly degrading. In response, the Chinese Government has gradually repositioned its Five-Year Plans to promote a development path that safeguards the environment and limits its greenhouse gas emissions.
The environmental issue is central to the strategic dialogue between France and China. For more than 15 years, AFD has supported the country through a partnership with the Chinese Ministry of Finance and the National Development and Reform Commission (NDRC). The objective of this cooperation is to mobilize the most innovative French expertise to support China’s transition towards a low-carbon and green economy.
AFD operates in China exclusively through market-rate loans to the central government, with no public funds involved. These loans are then on-lent to local authorities. Since 2004, AFD China has financed 48 projects totaling €2.2 billion. Since 2022, France has reported no financial flows to China as official development assistance.
AFD and China: cooperating to conserve biodiversity and combat climate change
Since we began our activities in China in 2004, we have financed several wastewater treatment and drinking water production projects, using energy-saving technologies providing advanced treatment and high-quality services, as well as a pilot project for a “sponge city” in a district of the city of Mianyang, in Sichuan province.
Flagship projects:
- The project to restore the wetlands of Wolong Lake in Kangping, in Liaoning province, was the first operation supported by AFD in the field of biodiversity restoration in China,
- The project to protect and develop biodiversity in Xianju National Park, in Zhejiang province, aims to assist the local authorities with the implementation of a project to restore and promote the exceptional natural and cultural heritage of Xianju. This project benefits from a strong partnership with the Ballons des Vosges Nature Park which aims to facilitate peer-to-peer exchanges on this innovative issue for China,
- The project for integrated ecosystem management in Fuding, in Fujian province, is the first project supported by AFD in the field of coastal and marine biodiversity in China.
The emergency situation facing biodiversity in China, a megadiverse country, calls for strong policy guidance. AFD Group contributes to the bilateral dialogue and institutional exchanges between France and China on biodiversity. The projects implemented by AFD provide concrete examples of the efforts made by France and China to conserve biodiversity. This commitment was reaffirmed with the publication of the Joint Statement on Strengthening Biodiversity and Ocean Cooperation, on the occasion of the State visit by Xi Jinping to France in May 2024.
AFD is today recognized as a legitimate and leading actor by the Chinese ministries and academic network for dialogue on this issue, both for its expertise on the subject and its capacity for mobilization.
The world’s largest emitter of CO2, China pledged under the Paris Climate Agreement to peak its CO2 emissions by 2030 and be carbon neutral by 2060. To support this transition, our action focuses on financing pilot projects in innovative segments, renewable energies and energy efficiency, as part of the process to decarbonize the country.
For example, AFD is supporting several municipalities in the district heating sector:
- In Zibo, in Shandong province, industrial waste heat is recovered to supply district heating. A second project is under implementation with the same municipality through which AFD is continuing to accompany its low-carbon energy path
- Construction of systems to recover heat from treated wastewater from two sewage treatment plants to supply district heating to two districts of Jinan, in Shandong province
AFD has also helped the city of Shaoyang (Hunan province) set up a food waste management and energy recovery system.
China is a leading international donor and is playing an increasingly important role in international development financing. The volume of its financing will be decisive for the achievement of the Sustainable Development Goals (SDGs) around the world.
The aim of the cooperation with Chinese development finance actors is to promote the highest international standards and practices at several levels: environmental and social, governance, procurement, and sustainable finance.
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Key figures
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48 projects financed since 2004
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100% of projects aligned with the Paris Accord