AFD AND MAURITIUS SUSTAINABLE ISLAND

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1 AFD AND MAURITIUS SUSTAINABLE ISLAND The forest of Bras d Eau, classified as a National Park in 2011 Government Information Service, Republic of Mauritius A partnership for a sustainable societal project

2 MAURITIUS, A DYNAMIC BUT ECONOMICALLY VULNERABLE ISLAND STATE With per capita GDP at USD 8,700, the Republic of Mauritius is a middle-income country and has an open and diversified economy. Despite its size, its limited natural resources and its distance from its main markets, it is fully integrated into the global economy. It is characterized by high population density (628 inhabitants per km²), with million inhabitants for a surface area of 2,040 km². Popular celebration during the National Day Port-Louis during rush hour Buoyant economic growth (annual average of +4.7% of per capita GDP between 1999 and 2009), coupled with a rise in living standards, has damaged the environment (loss of biodiversity, coastal erosion, pollution of environments ) and created an increased dependence on imported fossil fuels for power generation and transport. 83.1% of primary energy needs are today imported (29% coal and 54.1% oil), i.e. a final per capita energy consumption of 1.12 toe. Over the past decade, Mauritius electricity demand has increased by an average of 4% a year. Constraints in terms of availability and the price of these materials will continue to grow in the coming years and are therefore likely to have an impact on the country s energy security and expenditure. This vulnerability may be exacerbated by the effects of climate change (floods, droughts, soil erosion ) and pose a threat to the economic and social development of the country. Traffic congestion at the entrance to the capital Mauritius is therefore facing a dual challenge: it needs to define a development path that will allow it to sustainably preserve its resources and increase its resistance to shocks, as well as its capacity for resilience, while promoting the well-being of its residents. MAURITIUS SUSTAINABLE ISLAND, A SOCIETAL PROJECT The Government of Mauritius has set out to address these challenges by declaring its intention to promote harmonious and eco-friendly development. In 2008, the Prime Minister, Navin Ramgoolam, consequently launched the Mauritius Sustainable Island (MSI) project. It aims to develop a real societal project shared by all citizens and to create sustainable and resilient economic wealth that benefits all, while preserving the environment, natural resources, social justice and the quality of life for the population. MSI aims to ensure that there is synergy and coordination between the different sectoral policies and to promote a better integration of issues related to sustainability within these policies. A participatory democracy process was established in order to come up with an MSI strategy. It was subsequently set out in an action plan, which should be included in the Government s 2013 budget. THE MSI FUND, A FINANCING INSTRUMENT DEDICATED TO MSI This fund was set up by the Government in 2008 and is financed by public, private and international funds. It finances projects and programs to preserve natural resources or increase resilience to climate change, notably through the implementation of the MSI action plan. Since its launch, with an initial endowment of EUR 35 million, the MSI Fund has financed several projects initiated by the Government in different sectors including: energy efficiency by replacing bulbs for street lighting or subsidizing energy-saving light bulbs; the promotion of renewable energies by providing subsidies to 50,000 households for their investments in solar water heaters, financing photovoltaic panels in public schools and training solar water heater installers; waste management via a domestic composting program. The MSI Fund also develops its own programs, which focus on rationalizing the use of water, rainwater recovery, the construction of sustainable buildings and raising environmental awareness in schools.

3 MAIN PUBLIC POLICIES RELATED TO SUSTAINABLE DEVELOPMENT The Government of Mauritius became aware of the extent to which sustainable development was an essential issue in ensuring the country s prosperity and adopted several policies prior to and alongside the MSI process: The National Environment Policy (NEP, 2007) sets out issues and objectives to be achieved for the sustainable development of the island; The Sustainable Consumption and Production Program (SCP, ) is a pilot program that aims to implement policies for sustainable consumption and production. It references 44 projects; The Long-Term Energy Strategy sets out the Government s energy policy and contains ambitious objectives for renewable energy generation, which is expected to account for 35% of the energy mix by The focus is on developing wind energy, enhancing the effectiveness of the bagasse industry and the development of new generation units by the private sector; The creation of the Energy Efficiency Management Office (EEMO), which has the task of implementing a national energy efficiency program; The Small-Scale Distributed Generation Project was launched in December 2010 and targets small private producers (residential, commercial and industries) to allow them to generate electricity using renewable energy sources and to sell any surpluses to the national electricity company, for a total installed capacity of 3 MW; Île aux Aigrettes, site for conservation of endemic flora by the Mauritian Wildlife Foundation The reform of the tax system for motor vehicles was set in motion following studies financed by AFD and the IMF. Taxes on motor vehicles (imports), which used to be based exclusively on the engine size, are now based on the French bonus/malus model depending on CO 2 emissions; The National Biodiversity Strategy & Action Plan (2006) targets a coherent set of observations and actions dedicated entirely to biodiversity. It specifically aims to develop a network of sensitive natural areas, create areas for restoration and an intensive fight against invasive species and implement activities in the sectors of agriculture, forest management, coastal development, conservation of genetic resources, etc. Astride Raghoonauth SUSTAINABLE DEVELOPMENT, THE GUIDING PRINCIPLE FOR AFD S OPERATIONS IN MAURITIUS Sustainable development is more than a sector of operation: it is a cross-cutting issue for all AFD operations in Mauritius. Over 70% of the EUR 500m mobilized in Mauritius by AFD and the French Global Environment Facility (French GEF) are in line with the Mauritius Sustainable Island project. Consequently, in order to preserve biodiversity, ecosystem services and protect the climate, AFD seeks to: better integrate the environmental and social aspects in the projects it finances for infrastructure, support to the private sector and support to regional cooperation; help strengthen the institutional framework and the process for the definition of public policies; promote investment options to private stakeholders that save resources and have a low environmental impact. The sugar cane industry, a potential to create added value

4 AFD S SUPPORT FOR THE MAURITIUS SUSTAINABLE ISLAND PROJECT Environment Aid Program AFD has defined its third budget support package in collaboration with the Government of Mauritius based on a three-year program ( ) to support the Mauritius Sustainable Island project, the Environment Aid Program (EAP). This program aims to: support the Government of Mauritius efforts to develop a coherent and common vision of MSI and consequently review sectoral policies; build concrete projects on the basis of MSI that have a real positive impact on the environment, the economy and the well-being of residents; endorse MSI as a common societal project by strengthening communication and dialogue with the private sector and civil society. This EUR 125m loan is combined with a technical assistance facility in the form of grants (EUR 2m) from AFD and the French GEF. A team of external sectoral technical experts also continuously monitors and supervises the MSI process. Workshop to define the MSI strategy Technical assistance for the definition of the MSI institutional process The grants from AFD and the French GEF and the participation of the French Government have supported the process to prepare the MSI strategy and action plan. A high-level expert has helped the Government of Mauritius establish a participatory process based on the French Grenelle de l Environnement (protocol on climate change). This activity has mobilized 300 people from civil society, the private sector and the Government, who have formulated their recommendations in a report. Moreover, the French GEF is financing a multidisciplinary team, which is consolidating the recommendations that aim to come up with an MSI strategy and action plan. Government Information Service, Republic of Mauritius Mauritius Sustainable Island, a participatory process UNDP financing Public contributions to the national MSI vision Green Paper MSI VISION National consultations special interest groups, consultations Consultations online surveys, ministries Consultative committee made up of 300 people divided into 6 thematic working groups > Reports and recommendations Consultation of ministries and public entities + 9 decentralized public meetings Formulation of draft MSI policy and strategy AFD + French GEF financing Sustainable development strategy with civil society contribution Each ministry has its own MSI roadmap MSI POLICY AND STRATEGY MSI ACTION PLAN Consultations draft MSI policy and strategy Validation by Council of Ministers Draft MSI action plan Consultations draft MSI action plan Validation by Council of Ministers Implementation by the relevant ministries on the basis of their budget programming for and by other stakeholders

5 Sectoral expertise AFD finances the preparation of concrete and innovative projects, particularly in the energy sector, for example, pre feasibility studies on geothermal energy and the introduction of ethanol in motor fuel, the mapping of energy efficiency reserves in industry and research on a program for energy retrofitting in public buildings. Support for innovation and experience sharing on green technologies also plays a key role. This involves tapping the strengths and know-how of Réunion, a French Overseas Community with broad competencies that shares the climate constraints and insularity of Mauritius. The building sector, a source of energy efficiency reserves COOPERATION WITH RÉUNION Support for regional integration is one of the objectives of AFD s strategy in Mauritius. The building of bridges between Mauritius and Réunion is particularly justified in the sectors of energy and environmental protection and, more broadly, sustainable development. AFD has facilitated an agreement between the French Environment and Energy Management Agency (ADEME), Réunion and the Government of Mauritius. This has made it possible to identify a number of areas for cooperation: development of renewable energies, energy demand management in buildings, sustainable urban planning, etc. Several practical support operations have been developed, such as training for public architects in bioclimatic architecture by ADEME, support to the Ministry of Energy from the Réunion Regional Energy Agency for the creation of an energy observatory, support from Électricité de France (EDF) to the same ministry for the drafting of a bid invitation for a 10 MW photovoltaic power plant. Financing private stakeholders AFD also works with the private sector with the aim of enhancing methods for the production and use of resources, thus making environmental improvement an economic and social opportunity for all. On this basis, a EUR 40m environmental credit line, signed with four local banks in 2009 to finance green projects, has made it possible to develop good practices in private investments. THE CONTRIBUTION OF THE ENVIRONMENTAL CREDIT LINE TO MAURITIUS The environmental credit line mainly finances projects for energy efficiency (39% of financing), environmental efficiency (32%) and renewable energies (19%). It concerns investments in hotels for energy efficiency, photovoltaic panels, processing vinasses from distilleries into biofertilizers, energy recovery from biogas from a waste landfill site, the renewal of a fleet of buses and more energy-efficient industrial equipment. On 30 April 2012, 38 projects had been financed for an amount totaling roughly 60% of the credit line and had achieved the following results: an annual electricity saving of roughly 24 GWh; the installation of 3.2 MW of renewable energies; an annual fuel saving of roughly 3.1 million liters (heavy oil, diesel, LPG); an annual water saving of roughly 1.1 million m 3 ; a 145,000 ton reduction of annual CO 2 emissions into the atmosphere. Donor community operations Other development partners are involved in the MSI project. With respect to the MSI roadmap, the European Union has allocated a EUR 3m grant under the Global Climate Change Alliance. The UNDP has established several major support programs for MSI and has financed the preparation of an MSI Green Paper. More indirectly, the World Bank, European Investment Bank and Japanese Government (JICA) finance projects in the sectors of water, sanitation, transport and the fight against climate change, with the aim of preserving the environment. Partners meet regularly to coordinate their activities in the different areas of operation. Through this innovative approach, AFD, development partners and the Government of Mauritius adopt a process based on collective learning and are brought together around a unifying concept: sustainable development.

6 Agence Française de Développement (AFD) is a public development finance institution that has been working to fight poverty and foster economic growth in developing countries and the French Overseas Communities for seventy years. It executes the policy defined by the French Government. AFD is present on four continents where it has an international network of seventy agencies and representation offices, including nine in the French Overseas Communities and one in Brussels. It finances and supports projects that improve people s living conditions, promote economic growth and protect the planet, such as schooling for children, maternal health, support for farmers and small businesses, water supply, tropical forest preservation, and the fight against climate change. In 2011, AFD approved nearly 6.9 billion to finance activities in developing countries and the French Overseas Communities. The funds will help get 4 million children into primary school and 2 million into secondary school; they will also improve drinking water supply for 1.53 million people. Energy efficiency projects financed by AFD in 2011 will save nearly 3.8 million tons of carbon dioxide emissions annually. AGENCE FRANçAISE DE DéVELOPPEMENT (AFD) 5 rue Roland Barthes Paris Cedex 12 France Tel.: Fax: AGENCE de port-louis Bureau 310, Bâtiment Dias Pier Le Caudan Waterfront Port-Louis, Île Maurice Tel.: Fax: afdportlouis@afd.fr FFEM FFEM is a bilateral public facility set up by the French Government in 1994 following the Rio Summit. It aims at promoting global environmental protection via sustainable development projects in developing or transition countries. The French Global Environment Facility supports physical projects in recipient countries. Its operations are learning-based and support experimental, innovative or exemplary approaches. Creation: Planet 7 June 2012 This brochure respects the environment and was printed using vegetal ink on PEFC certified paper (sustainable forest management).