Climate

In 2017, the entire AFD Group undertook to make its activity be 100% compatible with the Paris Agreement. This unprecedented commitment bears witness to our proactive stance in climate matters.

Being “100% Paris Agreement” implies analyzing each of the Group’s interventions to see that they are consistent with long-term low-carbon and resilient development in the country where they are implemented. This analysis is rounded out by an assessment of the level to which our investments are exposed to climate risks, be they physical or related to low-carbon transition policies. These analyses are used in delivering the Sustainable Development Opinion given to projects at the examination stage. 

In order to go even further in co-building in climate matters with its partner countries, AFD is setting up the “2050 Facility” dedicated to developing long-term low-carbon and resilient development strategies that the COP21 has asked all countries to produce by 2020.

This commitment comes in addition to another one that already exists within the Group: seeing to it that 50% of annual financing goes to projects that have a direct and beneficial impact on the climate.

In 2012, AFD made a commitment that 50% of its annual financing in foreign countries would concern projects that had a co-benefit for the climate. This objective has been renewed and extended to the entire AFD Group.

AFD has set an objective of reaching 5 billion euros of commitments per year in favor of the climate by 2020 in foreign countries. Special effort will be made in adaptation projects (objective of 1.5 billion euros per year by 2020).

In 2018, the AFD Group committed 4.8 billion euros of financing for the climate, through 124 projects. This level of commitment brought the total of the Group’s commitments since 2005 for projects co-benefiting the climate to more than 33.8 billion euros.

Above and beyond a role of solidarity towards the countries that are the most vulnerable and the least able to seize the opportunities of the green economy, development banks now have a major role to play as a “catalyst” and above all to “reorient” global public and private investment towards investments adapted to countries’ low-carbon and resilient transitions.

AFD is currently seeking to maximize its financing’s snowball effect on the redirection of private investments, largely via credit lines to banks or through direct financing by Proparco, the Group’s private-sector subsidiary.

To work on the practices related to climate financing, we actively participate in the major international meetings and in the discussions on climate financing that are part of the COP, Climate Weeks or more recently the One Planet Summit. 

AFD is involved in a great many initiatives to help better integrate climate into the strategies and operations of financial institutions, in particular the Mainstreaming Climate Action in Financial Institutions initiative and the integration of climate financial risks, and the Taskforce on Climate Financial Related Disclosure.

Furthermore, AFD has been accredited to the Green Climate Fund since 2015, and it has obtained approval for two initial adaptation projects, in fighting flooding in cities in Senegal and in agriculture in Morocco.

In October 2017, AFD was appointed to chair the International Development Finance Club (IDFC), a unique network of 23 national, regional and international development banks from around the world, 19 of which are based in developing countries.

With annual commitments of nearly $800 billion, of which 20% ($158 billion in 2016) are climate-dedicated, IDFC is the world’s top public donor for the climate.

AFD works with IDFC in several areas, especially in implementation of the Paris Agreement; methodology to determine amounts of climate financing, especially for adaptation; and joint commitments by IDFC and the group of multilateral development banks made during the One Planet Summit on December 12, 2017.