Agence Française de Développement (AFD): “How Can Development Banks and Local Financial Institutions Promote Climate Finance for Local Authorities?”

As a key partner of the Cities & Regions Pavilion – TAP2015, the Agence Française de Développement (AFD) will host a session on Monday, 7 December from 11.00 -12.30 in Agora Hall of the Pavilion, entitled “How Can Development Banks and Local Financial Institutions Promote Climate Finance for Local Authorities?”

Many projects, although directly financed at the local level, are led by national governments. Such cases require effective vertical integration between different levels of government, with development banks such as AFD often playing a key intermediary role in this process. This session will showcase a range of climate financing models that are customized to reflect the local context, including the interests and capacities of local actors.

The session will capture experiences from development banks and from successfully funded projects, generating a discussion on how to successfully unlock the potential of climate finance. The session will answer the following questions:

• What combinations of technological solutions, policy frameworks and governance structures can be replicated for projects seeking to attract climate finance?

• How can technical assistance help lower the barriers to climate finance by fostering creditworthiness and transparency?

As a financial institution and main implementing agency for official development assistance in France, AFD is entrusted with a mandate by the French national authorities to contribute to economic and social development in its geographical areas of operation. It does so by financing and supporting development projects and programs, while participating in debates and dialogues with partners from local governments, research institutions and implementing agencies.

Through these actions, AFD aims to spur more sustainable and shared economic growth, improve living conditions in the poorest regions and countries, contribute to preserving the planet and help stabilize fragile or post-conflict countries.

AFD carries out its mandate through its financing, risk analysis and hedging instruments, as well as its expertise in training and capacity building, provided to both public and private stakeholders.

AFD also uses models for climate finance that are adapted to fit the specific context. In the poorest countries, primarily in Sub-Saharan Africa, AFD mainly operates through grants. In middle-income countries, it allocates soft loans and provides technical assistance, which strengthens the contracting authorities for funded projects and creates cooperation on common challenges in these countries. In emerging markets, it allocates market-rate loans to finance projects that combat climate change. In the French overseas provinces, it implements support, advisory and financing activities for local public and private stakeholders and promotes initiatives for cooperation and regional integration.

This blog post was developed by ICLEI – Local Governments for Sustainability.