Mexico, 16 June 2015 Bénédicte Desrus/AFD FINANCING CLIMATE ACTION

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1 Mexico, 16 June 2015 Bénédicte Desrus/AFD FINANCING CLIMATE ACTION

2 AFD COMMITTED TO THE CLIMATE AFD is working on a daily basis to achieve a sustainable, just and equitable world. For over 10 years now, our projects have mainstreamed the climate dimension and are now fully in line with the 17 Sustainable Development Goals (SDGs) adopted by the UN in AFD plays an active role in mobilizing climate finance, both directly and through cofinancing, with private investors. We are a member of the International Development Finance Club (IDFC) along with peers institutions and take action to redirect financing and investments towards the climate. Indeed, financing the climate benefits everyone. 24bn BETWEEN 2005 AND 2016 AFD Group finances a large number of development projects that have co-benefits for the fight against climate change. In 2016, OVER 50% OF AFD s FINANCING in foreign countries had benefits for the climate, populations and ecosystems. 322m 606m 2,797m Budget support Adaptation Mitigation

3 The first 100% Paris Agreement bilateral development bank Strategy AFD s climate-development strategy is one of the most ambitious among development banks. It is being developed in response to the Paris Agreement, with a focus on the objective of making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient. Our sustained climate finance commitments targets 50% of financing allocated yearly in developing countries. At the same time, AFD Group systematically measures the climate footprint of funded projects using a robust and transparent methodology. This is combined with a policy to select projects with regard to their impact on the climate. By 2020, 5bn a year will be earmarked for projects with direct climate co-benefits, including over 1bn a year for adaptation. In order to yet increase this ambition, AFD sets itself the objective that 100% of funded projects will be compatible with the Paris Agreement. This means that they will all be consistent with long-term, low-carbon and resilient development. Our aim is also to lead our partners (international donors and local financial actors) along this virtuous pathway through cofinancing, but also by jointly building methods and standards for climate finance. How does AFD finance the fight against climate change? International markets BORROWING 3.6bn IN 2016 Public funds GRA,NTS Grants from the French State Funds delegated by other donors Green Climate Fund AN OVERVIEW OF OUR ACTIONS GREEN CLIMATE FUND L AFD has become a partner of the Green Climate Fund, one of the main aid instruments for countries vulnerable to climate change. AFD GREEN BONDS To finance the fight against climate change, AFD has just borrowed 750m on the financial markets by ussuing its second green bond.

4 Mainstreaming Initiative In 2015, several IDFC member banks (see opposite), including AFD, launched the initiative Climate Action in Financial Institutions: 5 Voluntary Principles for Mainstreaming Climate Action. The aim is for funders and investors to take greater account of the climate. Two years on, it now has over 30 public and private member institutions from all over the world. Financial institutions have a major role to play in directing investments towards sustainable, low-carbon and resilient development pathways. The five principles of the initiative aim to guide the financing decisions of institutions to make climate issues a central component. The member institutions of Mainstreaming exchange their experiences and share their good practices for the climate. Their aim is to make a meaningful contribution to the achievement of the objective of the Paris Agreement to make financial flows compatible with green development. For the implentation of the Paris Agreement Less than two years after the Paris Agreement, 164 countries, accounting for over 95% of global greenhouse gas (GHG) emissions, have submitted their Nationally Determined Contribution (NDC), which demonstrates their commitment. This historical agreement now needs to be translated into practical terms through the implementation of the contributions. A large number of developing countries have expressed their wish to obtain technical assistance for the institutional, methodological and operational implementation of their NDC to achieve the objectives. In this context, AFD has launched Adapt Action, a 30m facility over a 4-year period ( ). It supports countries that are vulnerable to climate change along low-carbon and climate-resilient development pathways. Through support in the form of technical assistance and capacity building, Adapt Action will play an innovative role as a driving force to speed up investments that have co-benefits for adaptation in the most vulnerable geographical areas. IDFC International Development Finance Club On 15 October 2017, AFD took over the lead of the International Development Finance Club (IDFC). This network of 23 national and regional development banks from all over the world works to redirect financial flows towards sustainable, low-carbon and climate-resilient development actions. In 2016, IDFC provided USD 158bn of green financing including for activities that contribute to the fight against climate change. AFD will be working to raise awareness of the key role that national and regional development banks from developing countries play in this field. AFD and IDFC also mobilize private stakeholders to promote the emergence of innovative financial solutions for the climate: banks, investors, pension funds, insurers... The club has already developed common methods to account for climate finance and will be continuing this work, with a focus on adaptation to climate change. 24bn This is the amount of AFD s climate finance approvals since 2005 in the fields of renewable energies, energy efficiency, clean transport, forest protection, agroecology, and water resources and flood risk management. GEMMES Macroeconomic modelling finally includes parameters related to climate change. Gemmes is innovating to advise public policies and facilitate the energy transition. SOLAR ENERGY In Burkina Faso, the largest solar power plant in West Africa has just been built. Access to clean, reliable and cheap energy is changing the lives of the population. MORE INFORMATION ON AFD.FR

5 AFD Group climate activity IN DEVELOPING COUNTRIES 36% of financing by PROPARCO (AFD s private sector arm) 52% of AFD financing CLIMATE PROJECTS account for: 67% of financing in the Mediterranean 71% of financing inn Latin America 33% of financing in Africa 67% of financing in Asia ESTIMATION OF PROJECT IMPACTS -3.6 MILLION TCO 2 EQ/ A YEAR Impact of MITIGATION PROJECTS cofinanced by AFD Group Figures for 2016

6 Noor II solar power plant in Ouarzazate (Morocco), which comprises a power grid, a stormwater drainage system, public buildings and access to drinking water for surrounding villages Francesco Zizola / Noor AFD is France s inclusive public development bank. It commits financing and technical assistance to projects that genuinely improve everyday life, both in developing and emerging countries and in the French overseas territories. In keeping with the United Nations Sustainable Development Goals, AFD works in many sectors energy, healthcare, biodiversity, water, digital technology, professional training, among others to assist with transitions towards a safer, more equitable, and more sustainable world: a world in common. Through its network of 85 field offices, AFD currently finances, monitors, and assists more than 2,500 development projects in 108 countries. In 2016, AFD earmarked 9.4bn to finance projects in developing countries and for overseas France. AGENCE FRANÇAISE DE DÉVELOPPEMENT 5, rue Roland Barthes Paris France afd.fr facebook.com/afdofficiel twitter.com/afd_france Creation: Planet 7 November / PEFC certified / This publication comes from sustainably managed forests and certified sources. / pefc-france.org