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September the 16th, 2013

Climate finance tracking at AFD
Group
Methodology in AFD and examples of harmonization initiativ...
About the French Development Agency
 Public financial institution,
French ODA Agency with a private
sector subsidiary Pro...
1.2

How does AFD track climate finance ?

 Mitigation (emissions reduction or carbon sequestration):
« A development pro...
How does AFD track climate finance ?

 Support to national and territorial climate strategies and action plans
(budgetary...
1.3

How does AFD track climate finance?
1.5

What does AFD track climate finance for?

2005-2012 Climate commitment
 Information disclosure:
annually publicly wi...
2.1

Challenges for harmonization

 No common methodology, neither a unique legitimate institution to collect data
 In p...
2.2

IDFC – The 2011 mapping exercise of Green
finance of IDFC’s members

 Two step approach to overcome the varying defi...
2.3

IDFC – green mapping methodology
Core eligible project categories

Titre de la présentation

jj mmmm aaaa

9
2.4

ICCF – methodology

 Eligibility of project for financing by ICCF is defined …

 …. as belonging to one of the foll...
Thank you

Ophélie Risler
www.afd.fr
rislero@afd.fr
Key principals of our GHG accounting tool
> Excel based, easy to
handle and ergonomic
> Assumptions,
sources of data and
c...
1.2

Key principals of our GHG accounting
methodology
 3 SCOPES:
(1) Direct emissions, (2) Electricity / heat consumption...
1.3

Type of projects included in systematic
carbon footprint assessment
ALWAYS

USUALLY

RARELY

Energy
(fossil fuel powe...
2.1

International Development Finance Club (IDFC)

A group of nineteen development banks of national, sub-regional and in...
IDFC – green mapping methodology

Definitions of cimate change mitigation and adaptation

Titre de la présentation

jj mmm...
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CLIMATE FINANCE TRACKING AT AfD GROUP - BY OPHELIE RISLER - OECD 16-09-2013 Paris

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This is a presentation on whether elements of alternative approaches can be used to refine the Rio marker methodology. It was created by Ophélie Risler from AfD Group & presented during a working session at the OECD, Paris, on 16 September 2013. For more information please contact Stephanie Ockenden (stephanie.ockenden@oecd.org).

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Transcript of "CLIMATE FINANCE TRACKING AT AfD GROUP - BY OPHELIE RISLER - OECD 16-09-2013 Paris"

  1. 1. September the 16th, 2013 Climate finance tracking at AFD Group Methodology in AFD and examples of harmonization initiatives
  2. 2. About the French Development Agency  Public financial institution, French ODA Agency with a private sector subsidiary Proparco  Present in 80+ countries  EUR 7 bn committed in 2012  Climate change 2.4 bn , i.e. ~ 40%  Wide range of financing tools  Equity financing  Private sector loans  Partial risk guarantees / Loan guarantees  Guarantees on loans in local currency  Non sovereign loans / Credit lines to intermediaries  Sovereign loans at Project/Sector/Budget levels Climate change Strategy (2012-2016)  Systematic measurement of projects’ carbon footprint  Selecting projects according to their climate impacts (considering countries’ development levels)  High level of financing for climate change action  50% of AFD’s annual foreign-aid commitments  30% of Proparco’s commitments  Grants (projects, study funds) Project carbon footprinting at AFD Group 23/10/2012 2
  3. 3. 1.2 How does AFD track climate finance ?  Mitigation (emissions reduction or carbon sequestration): « A development project contributes to GHG emissions reduction when the emissions reductions it generates are greater than emissions produced during its lifetime ». Tracking methodology based on a restrictive project carbon footprint calculation (should be <0) using a transparent and simple tool to assess ex-ante the order of magnitude of direct and indirect GHG emissions due to a project over its lifetime.” (Carbon Footprinting Tool* developed since 2007) * available at http://climat.afd.fr  Adaptation (to climate change impacts): « An adaptation project is a development project that reduces goods, people or ecosystems vulnerability to climate risks ». A comparative analysis is conducted including (i) a study of the vulnerabilities to climate change of the project's geographical area with (ii) an analysis of the activities planned by the project in the light of a positive list of actions that can contribute to reducing vulnerability or to strengthening the resilience of communities, goods or ecosystems to climate change 3
  4. 4. How does AFD track climate finance ?  Support to national and territorial climate strategies and action plans (budgetary support or technical assistance dedicated to develop national strategies, NAMAs, local climate plans…). Our tracking methodology is based on triggers for Development Policy Loan’s (prorata) :  Budget support specifically for the climate (climate loans or support for national climate plans) is 100% recognized;  For kind of budget support, the methodology aims at reflecting the content of the political and sectorial dialogue with the counterpart (joint monitoring of indicators) and the impacts. It is backed up by a positive list of actions  In the absence of standardized indicators shared with the counterpart to monitor its public policy, there is the possibility to assess the financing provided at up to 40%, provided there is a cross-cutting “climate” activity. AFD-climate finance tracking September the16th, 2013 4
  5. 5. 1.3 How does AFD track climate finance?
  6. 6. 1.5 What does AFD track climate finance for? 2005-2012 Climate commitment  Information disclosure: annually publicly with disaggregate information by geography, thematic, instruments  Monitoring of our strategic commitment (50% climate projects, measurement of impact)  Participation in several reporting, mapping and disclosure processes using those figures (OECD, IDFC, Bilateral Financial Institutions) Titre de la présentation jj mmmm aaaa 6
  7. 7. 2.1 Challenges for harmonization  No common methodology, neither a unique legitimate institution to collect data  In particular, three main types of methodology for mitigation :  carbon footprint assessment (AFD) (robust but need and harmonized methodology of assessment)  list of type of projects which are by nature considered as climate action (simple but not very precise),  MDBs mapping  IDFC mapping  ICCF improved the methodology in giving for each type of project conditions  rio marker (expert based approach). Titre de la présentation jj mmmm aaaa 7
  8. 8. 2.2 IDFC – The 2011 mapping exercise of Green finance of IDFC’s members  Two step approach to overcome the varying definitions for green finance  A global definition of mitigation and adaptation based on OECD-DAC climate markers  A core list of eligible project categories or sub-sectors that were consensually accepted by all IDFC members as projects that typically contribute to tackling climate change. Integrated into this approach was the option for IDFC members to add other considered climate related investments along with an explanation on their climate accounting methodology  Collection data organized via a customized financial survey tool.  Approach based on positive list of actions with not restriction nor conditionality of environmental footprint assessment Titre de la présentation jj mmmm aaaa 8
  9. 9. 2.3 IDFC – green mapping methodology Core eligible project categories Titre de la présentation jj mmmm aaaa 9
  10. 10. 2.4 ICCF – methodology  Eligibility of project for financing by ICCF is defined …  …. as belonging to one of the following categories without restriction:  Generation of energy from renewable sources (Renewable Energy);  Production of long-lived products or equipment for the generation of Renewable Energy;  Sustainable sequestration of carbon or greenhouse gases.  …. as belonging to one the following categories to to the extent that the net ex-ante carbon footprint assessment is negative  Energy Efficiency Investments, being any investments dedicated to an efficiency improvement  Alternative Energy Efficiency Investments, being any investment dedicated to the generation of energy from a waste (-heat) stream;  Production of long-lived materials or equipment solely dedicated to generate higher energy efficiency levels compared to a reference scenario; The carbon footprint assessment shall take into account in as far as significant and available the lifecycle analysis);  Transport Projects that contribute to reducing road and air Titre de la présentation jj mmmm aaaa 10
  11. 11. Thank you Ophélie Risler www.afd.fr rislero@afd.fr
  12. 12. Key principals of our GHG accounting tool > Excel based, easy to handle and ergonomic > Assumptions, sources of data and calculation should be verifiable > Has to be usable by everyone for a decentralised use ((by country office and project managers) > “Simple" mode to assess the footprint of a project as early as possible in the project cycle > “Expert" mode (for more accurate carbon footprint) > Allows to modify the design of a project / influence on the decision process > Only the main emission sources (1 to 5) of a project are taken into account > Database of emission factor and ratio “A transparent and simple tool to assess ex-ante the order of magnitude of direct and indirect GHG emissions due to a project over its lifetime.” > Scope 1, 2 et 3 (when quantifiable with a reasonable effort) > Adapted to 27 types of projects financed by AFD > Consistent with scientifically validated method > All emissions from the funded activity are considered, regardless of the pro rata share of funds committed by the AFD in the project Project carbon footprinting at AFD Group > Compare gross emissions from project with emissions from a reference situation > Construction and operation phases taken into account 23/10/2012 12
  13. 13. 1.2 Key principals of our GHG accounting methodology  3 SCOPES: (1) Direct emissions, (2) Electricity / heat consumption, (3) Indirect emissions  ALL KYOTO GHGs: CO2, CH4, N2O, SF6, HFCs, PCFs (converted with Global Warming Potential)  BASELINE: Reference situation is taken as the situation with no project (can be dynamic)  FOR RENEWABLE: Baseline is the average grid emission factor (published by IEA)  PROJECT CARBON FOOTPRINT EXPRESSED IN tCO2 / year: We calculate emissions over the project lifetime (including construction emissions when not negligible) and divide it by project duration Project carbon footprinting at AFD Group 23/10/2012 13
  14. 14. 1.3 Type of projects included in systematic carbon footprint assessment ALWAYS USUALLY RARELY Energy (fossil fuel powerplant, oil & gas, EE, RE, FS) Transport & Distribution Education Manufacturing industry Health Urban development Telecommunication Forestry Agriculture Transport (road, rail, public transport, port, airport) Food industry Heavy industry & mining Technical assistance Solid waste management Budget support Water supply & wastewater Financial intermediation Project carbon footprinting at AFD Group 23/10/2012 14
  15. 15. 2.1 International Development Finance Club (IDFC) A group of nineteen development banks of national, sub-regional and international origin, who share common objectives. Agence Française de Développement (AFD), France Banco Estado (BE), Chile Bancoldex S.A., Colombia Banco Nacional de Desenvolvimento Econômico e Social (BNDES), Brazil Black Sea Trade and Development Bank (BSTDB), Greece In 2011, mapping exercise of Green Finance Delivered by IDFC Members Caisse de Dépôt et de Gestion (CDG), Morocco Central American Bank for Economic Integration (BCIE/CABEI), Honduras China Development Bank (CDB), China CAF-Development Bank of Latin America Croatian Bank for Reconstruction and Development (HBOR), Croatia Development Bank of Southern Africa (DBSA), South Africa Indonesia Exim Bank, Indonesia Industrial Development Bank of Turkey (TSKB), Turkey Japan International Cooperation Agency (JICA), Japan KfW Bankengruppe, Germany Korea Finance Corporation (KoFC), South Korea Nacional Financiera (NAFIN), Mexico Small Industries Development Bank of India (SIDBI), India Vnesheconombank (VEB), Russia 15
  16. 16. IDFC – green mapping methodology Definitions of cimate change mitigation and adaptation Titre de la présentation jj mmmm aaaa 16
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