Share the page
AFD’s Crucial Climate Initiatives Announced at COP28
Published on
Though famously hosted by the head of an oil company, COP28 was the first ever climate change conference to call for a transition away from fossil fuels. It’s a step towards addressing the climate emergency, which AFD Group is tackling head-on. The Group announced new projects and partnerships in Dubai, including assistance to countries most affected by climate disasters.
At COP28, France announced a package of financial support measures for countries vulnerable to climate change, amounting to more than €170 million.
- Climate disasters: suspension of loan repayments and risk reduction
AFD is to introduce its first ever clauses in its loan agreements to enable particularly vulnerable countries to suspend their loan repayments in the event of climate disasters.
A pilot phase will be launched in 2024 with 26 countries and will focus on two trigger events: storms and earthquakes. A second phase has already been planned and will expand the lists of countries and trigger events.
At COP28, KfW and AFD also presented a position paper on their activities in the field of loss and damage. The priorities identified include developing innovative tools and scaling up financing for disaster risk reduction and management, with new commitments in India, Peru and Turkey.
- Climate change adaptation: common language and support for Bangladesh
The Bangladesh Climate and Development Platform has been launched to combine climate projects with a financing strategy. The aim is to integrate Bangladesh’s climate risks into the country’s economic planning, and bolster climate-related risk management for financial institutions. It will also strengthen the monitoring and reporting of climate-related spending, and fortify disaster risk reduction and management.
The Asian Development Bank, World Bank and AFD are among the partners of this initiative. France will provide Bangladesh with approximately $1 billion of support from now until 2027, including an initial loan of €300 million allocated by AFD. France has already financed climate-related projects worth more than €750 million since 2015.
- Sustainable finance: transparency and Finance in Common
Rémy Rioux, as President of the Finance in Common coalition, and Jin Liqun, President and Chair of the Board of Directors of the Asian Infrastructure Investment Bank (AIIB), announced that AIIB will host the fifth edition of the Finance in Common Summit (FiCS) in China in 2024. It will be the first time that this summit will take place in Asia.
At COP28, a consortium of European Development Finance Institutions (EDFIs) led by Proparco and comprising Norfund, DEG, FMO and EFP, also formalized a Sustainability-Linked Loan for $200 million (€185 million) to support the strategy for sustainable development and climate action of Ecobank Group, which supervises 33 banking subsidiaries in Africa.
Find out more: COP28: Ecobank Transnational Incorporated signs its first Sustainability-Linked Loan
- Ecosystem protection: Nature-based Solutions and the Mediterranean
The Asian Development Bank launched the Nature Solutions Finance Hub in Asia and the Pacific, to which AFD is contributing a €1 million grant for technical assistance and project co-financing. This platform aims to reach a level of financing of $1 billion (€926 million) between 2024 and 2030.
Another partnership was announced at COP28, to restore and protect the Mediterranean: the Blue Mediterranean Partnership (BMP). AFD is one of the first three contributors to its implementation fund, the BMP Fund, hosted by the European Bank for Reconstruction and Development (EBRD), with a contribution of €2 million.
This fund will be operational in 2024. The BMP will target concrete investments in strategic sectors of the sustainable blue economy. This includes biodiversity protection, fisheries and aquaculture, the reduction of plastic pollution, and sustainable tourism in non-EU Mediterranean countries, such as Egypt, Jordan and Morocco.
- Satellite data in East Africa
At COP28, Expertise France signed the Charter of the Space for Climate Observatory (SCO), in which AFD also participates. The SCO is an international initiative launched in 2019 to fully exploit the potential of satellite data and digital innovations for climate action.
Gathering a group of public and private entities involved in the sector of Earth observation from space, the SCO coordinates efforts to develop operational tools for decision-makers and the general public for climate change monitoring, mitigation and adaptation.
AFD and Expertise France, in partnership with the Centre National d’Études Spatiales (CNES – National Center for Space Studies), have committed to help beneficiaries capitalize on these innovations to ensure sustainable economic development and increase their resilience to the effects of global warming.
Further reading: COP28: Satellite data key to climate cooperation issues
In Dubai, AFD Group also formalized its support to Rwanda with the objective of increasing climate finance flows. It comprises a €50 million budget support loan and a €3 million grant to finance technical assistance implemented by Expertise France.
Its objectives are to encourage climate-sensitive public finances and to incentivize private actors to consider climate risks in their regulatory, supervisory, and investment decisions.