Agence Française de Développement – AFD – Page 1 Alexis BONNEL Sector Operations Agence Française de Développement Infrastructure Trust Fund and Climate Change

Agence Française de Développement – AFD – Page 2  The insider’s view  Contribution of ITF co-financed projects on climate change mitigation and adaptation  The outsider’s view  A performing blending instrument  An example to follow by Climate Change negotiations on future financing architecture ITF and Climate Change

Agence Française de Développement – AFD – Page 3  Climate change adaptation & mitigation are major issues in Sub-Saharan Africa  Adaptation : many countries extremely vulnerable  Mitigation : increasing dependence on fossil energy ; poor resilience of development paths to external energy shocks (depletion of fossil resources, price volatility, …) ; deforestation  ITF already contributes on both agendas at project level  Climate impact of projects is optimized by also working at policy making level and through capacity building  e.g. spatial planning  Flexible interpretation of geographical scope and regional mandate of ITF needed  e.g. improving performance of national power utilities, addressing energy efficiency and demand-side management issues, … Climate Change inside ITF

Agence Française de Développement – AFD – Page 4  Request systematic carbon footprint (mitigation) ?  Request systematic vulnerability analysis (adaptation) ?  Define carbon objectives/guidelines/strategies of ITF ?  Enhance knowledge sharing, best practice dissemination and joint analytical work between ITF members Climate Change inside ITF Next steps ?

Agence Française de Développement – AFD – Page 5 The outsider’s view : Climate finance and ITF Source : Bilateral Finance Institutions and Climate Change: A Mapping of Climate Portfolios; Stockholm Environment Institute, 2009

Agence Française de Développement – AFD – Page 6 Current situation of international public climate finance USD 18 bn (EUR 12 bn) committed annually on mitigation and adaptation Bilateral + EIB: 66% 2008 data, based on climate finance reporting of relevant institutions NB : European Commission does not currently report on EdF climate change interventions Several programs sponsored by EdF could be considered as climate finance, including some funded by the Energy Facility Multilateral: 34%

Agence Française de Développement – AFD – Page 7  Tackling climate change means investing  In all sectors: energy, transportation, water, housing, industry, agriculture…  By structuring demand and making projects financially viable  Catalyzing hundreds of billions…  By mobilizing the whole range of existing and future means of financing : national and international tax system and markets, carbon markets, public and private sector  By creating leverage effects with tools dedicated to climate: stockholders equity, grants, loans, guarantees…  … and reforming ODA, a major player in supporting countries and catalyzing finance  By creating a system that responds to countries’ demands  By supporting and reinforcing the emergence of national institutions in developing countries  By conditioning aid solely on the criteria determined by the COP  By guaranteeing priority of access to the poorest Climate finance / COP A paradigm change

Agence Française de Développement – AFD – Page 8  Governed by the Parties  Giving developing countries the choice of their donors  Promoting collaboration and competition  For more innovation and efficiency  Using funds fairly  By adapting budgetary efforts to the nature of the investments and beneficiaries  By using subsidies to make projects financially viable  By attracting public and private, international and national investments  And quickly  By mobilizing all existing channels  Predictable and sustained flows, guaranteed by the COP  By placing the mechanism under the authority of the COP  By creating a binding system of financial contributions by Parties An innovative and quickly operational financial mechanism

Agence Française de Développement – AFD – Page 9 Grants Credit committee of the International blending facility Contributions by Parties and/or innovative financing mechanisms Executive committee of the Facility COP High Level BodyRegistration Database Financing requests International blending facility Grants + loans + guarantees + other financial tools Pool of financiers National, bilateral, international, private NAMAs Grants Policies/Local govts/Companies Adaptation strategies Additional grant requests as needed

Agence Française de Développement – AFD – Page 10 Thank you …