Bolivia

AFD Group has been supporting Bolivia’s ecological and inclusive transition since 2015 through projects promoting the energy transition, access to safe drinking water and sanitation services, environmental protection and the country’s sustainable economic and social recovery.

Context

Home to a wealth of hydrocarbons and mineral resources, Bolivia developed a productive structure based historically on the exploitation of raw materials. The country has made significant social progress for its 11 million inhabitants thanks to extremely favorable commodity prices in the 2000s, and a proactive policy benefiting the most vulnerable groups. This is particularly true for its poverty rate, which has fallen considerably, from 70% in 2000 to 31% in 2021, according to CEPAL.

In addition, Bolivia ranks among the countries most affected by the impacts of climate change (among the ten most vulnerable countries according to the Global Climate Risk Index). Several Bolivian cities experienced unprecedented droughts between 2016 and 2018, and devastating fires have affected some areas in recent years.

There are other challenges involved in the fight against climate change, especially in rural areas, where people suffer from the poor quality of drinking water and sanitation services. The country is also facing the urgent need to diversify and secure its national electricity production.

In response to these challenges, AFD Group’s action, in keeping with the country’s economic, social and environmental development strategy, aims to support an integrated approach to climate issues and sustainable development by focusing on three strategic areas up until 2025:

support the low-carbon sustainable recovery;
promote fair and resilient cities and regions with high-quality local essential services;
bolster sustainable environmental management.

AFD's Bolivia office is directly attached to the Andes regional office in Bogotá.

Our approach

"AFD and Bolivia: meeting the challenge of sustainable and inclusive development"

Bolivia’s National Interconnected System (SIN) covers 94% of the country’s energy demand, with 97% coverage in urban areas and 77% in rural areas, while renewable energy (biomass, solar and wind) accounts for only 1% of national production. The Bolivian government plans to achieve universal electricity access by 2025 and a safe, sustainable and low-cost electricity supply for the people of Bolivia. AFD is supporting these efforts through:

a loan for the construction of one of the first solar power plants in the department of Oruro;
a loan for the construction of two wind farms in the departments of Santa Cruz and Tarija;
a budget loan to support the country’s public energy transition policy;
a technical cooperation program supported by funds delegated by the European Union and grants from AFD. The goal is to build national capacities in the sector, improve environmental and social regulations, support the integration of intermittent energies within SIN (with the National Dispatch Committee – CNDC – and RTEi), set up an energy information system, promote electromobility and improve gender equality in the sector.

Only 57% of Bolivians have access to sanitation services and the performance of drinking water and sanitation services remains insufficient. Water quality is a real problem for both people and the environment. AFD is committed to supporting the Bolivian government by providing the following:

a loan for the construction of 27.5 km of drinking water supply lines to transport water from the Misicuni dam to city of Cochabamba;
a loan for the construction of wastewater treatment plants and sanitary networks in Cochabamba and clean-up of Rocha River;
a budget loan to bolster the long-term water governance framework, including capacity building for several of the country’s water operators;
a technical cooperation program to support the Ministry of Environment and Water and assist two pilot catchment basins in integral water management (in partnership with the International Office for Water), and strengthen the Misicuni company;
produce knowledge through a research program on water as a common good in Bolivia.

In the current fragile global environment, particularly following the Covid-19 pandemic, Bolivia is facing the challenge of strengthening its economy. The country has therefore adopted measures to revitalize the economy by strengthening its production base. AFD Group is supporting this dynamic through:

an emergency budget loan co-financed with other donors during the pandemic to fund social benefits for the most vulnerable individuals in Bolivia;
a loan to the Bolivian government to support sustainable recovery and resilience to climate change, with three focus areas:
- macroeconomic stability, for example by adapting the GEMMES macroeconomic model to incorporate climate into public policies (2050 Facility) ;
- implementation of Bolivian commitments established by the nationally determined contributions for 2030. AFD is therefore helping to design the national strategy for climate change mitigation and comprehensive forest management in Bolivia (Euroclima+ funds);
- just transition through the consolidation of the Productive Development Bank’s (BDP) green financial strategy.
two credit lines from Proparco to support small and medium-sized companies and microfinance with the Ganadero Bank and the San Martin de Porres cooperative (COSMART).

Bolivia benefits from several regional projects funded by AFD Group:

AFD has financed partnerships between Bolivian and French CSOs on themes such as rural and agricultural development, human rights, health and women’s economic empowerment;
urban development is supported through different approaches: a sustainable urban mobility project with the construction of a pilot bike path in La Paz (Euroclima+ funds), a study on the various funding methods used by local authorities (Ciudad ConFianza) and studies to analyze the climate vulnerability of the cities of Tarija and La Paz, conducted by IRD and other institutions;
Expertise France is implementing several regional projects for forests and biodiversity in the Amazon, in Chiquitania and Chaco (Euroclima+ funds), as well as projects focused on social protection and public policies to address the ageing of the population;
Bolivia is also involved in the regional project to support the implementation of the Escazú Agreement, which includes Ecuador, Mexico and Costa Rica.