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Alexis BONNEL Sector Operations Agence Française de Développement

Infrastructure Trust Fund and Climate Change. Alexis BONNEL Sector Operations Agence Française de Développement. ITF and Climate Change. The insider’s view Contribution of ITF co-financed projects on climate change mitigation and adaptation The outsider’s view

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Alexis BONNEL Sector Operations Agence Française de Développement

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  1. Infrastructure Trust Fundand Climate Change Alexis BONNEL Sector Operations Agence Française de Développement

  2. ITF and Climate Change • 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

  3. Climate Change inside ITF • 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, …

  4. Climate Change inside ITFNext steps ? • 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

  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

  6. Current situation of international public climate finance Bilateral + EIB: 66% Multilateral: 34% 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 USD 18 bn (EUR 12 bn) committed annually on mitigation and adaptation

  7. Climate finance / COPA paradigm change • Tackling climate change means investing • In all sectors: energy, transportation, water, housing, industry, agriculture… • By structuring demand and making projects financially viable • Catalyzinghundreds 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 countriesand 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

  8. An innovative and quickly operational financial mechanism • 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

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

  10. Thank you …

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