climate finance tracking at afd group - by ophelie risler - oecd 16-09-2013 paris
DESCRIPTION
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 ([email protected]).TRANSCRIPT
Climate finance tracking at AFD
Group
Methodology in AFD and examples of harmonization initiatives
September the 16th, 2013
23/10/2012 Project carbon footprinting at AFD Group 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
Grants (projects, study funds)
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
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
How does AFD track climate finance ?
3
1.2
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.
September the16th, 2013 AFD-climate finance tracking 4
How does AFD track climate finance? 1.3
What does AFD track climate finance for?
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1.5
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)
2005-2012 Climate commitment
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).
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2.1
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
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2.2
IDFC – green mapping methodology
Core eligible project categories
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2.3
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
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2.4
23/10/2012 Project carbon footprinting at AFD Group 12
“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.”
> Assumptions,
sources of data and
calculation should be
verifiable
> Excel based, easy to
handle and ergonomic
> 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
> Scope 1, 2 et 3
(when quantifiable
with a reasonable
effort)
> Consistent with
scientifically
validated method
> Adapted to 27 types of projects financed by AFD
> Compare gross emissions from project with
emissions from a reference situation
> All emissions from the funded activity are
considered, regardless of the pro rata share of
funds committed by the AFD in the project
> Construction and
operation phases taken into
account
Key principals of our GHG accounting tool
23/10/2012 Project carbon footprinting at AFD Group 13
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
1.2
23/10/2012 Project carbon footprinting at AFD Group 14
Type of projects included in systematic
carbon footprint assessment
ALWAYS USUALLY RARELY
Energy
(fossil fuel powerplant,
oil & gas, EE, RE, FS)
Transport
(road, rail, public transport,
port, airport)
Heavy industry & mining
Solid waste management
Water supply & wastewater
Transport & Distribution
Manufacturing industry
Urban development
Forestry
Education
Health
Telecommunication
Agriculture
Food industry
Technical assistance
Budget support
Financial intermediation
1.3
International Development Finance Club (IDFC)
15
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
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
A group of nineteen development banks of national, sub-regional and international origin, who share
common objectives.
In 2011, mapping exercise of Green Finance
Delivered by IDFC Members
2.1
IDFC – green mapping methodology
Definitions of cimate change mitigation and adaptation
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