Transcript Johannesburg Convention Center – Shift towards green growth

Green Economy Summit – Johannesburg
Convention Center
–
Shift towards green growth
Need for innovative support from Development
Finance Institutions?
May 18th 2010
Main Topics
1. Snapshot on AFD
2. AFD and green economy in SA
3. A response requiring mind frame
changes
4. Achieving transition to green growth
model
5. As far as DFIs are concerned
6. Conclusion
AFD: a snapshot
 Promoting green and socially inclusive growth is a core
strategy for AFD, validated by French government
 More than 50% of AFD’s activity relates to the promotion
of new “Green orders”: € 3 bn + committed in 2009
• Policy making & investment financing
 Through a whole range of complementary tools
Policy
loan
Sector
program
loan
Non sovereign
Programmatic
loan
Sovereign
Project loan
Non
sovereign
Project loan
Credit Lines for
small sized
projects
Grant for study
or technical
assistance
AFD’s textbook strategy: supporting key players’
movement towards green growth model in SA
• Power sector: support to ESKOM wind farm – 100 MW + –
€ 100M +
• Banks: credit facility to promote renewable energy and
energy efficiency projects – IDC, ABSA, Nedbank – € 120M
• Municipalities: sustainable development program for
eThekwini - € 100M
• Research & Development: participation in the South
African CCS Center – study funding
• Public agency: technical assistance to CEF - € 750k
But…
An insufficient response in face of economic
mutation challenges
…are all issues addressed?
 Would R&D, industrialization and dissemination of green
tech be enough?
e.g: state of the art technology does not address urban
sprawl
 What is a “green New Deal” about anyway?
 Shifting towards green economy requires a change of
mind frame, a new paradigm
e.g: the solutions (technical, regulatory) may not yet be
known (or exist) but the key challenge is to make sure you
factor the issue in your economy
 Because the bottom line is: a “green New Deal” is about
“decoupling finite resource use and environmental
impacts with economic growth”
and it is not an easy task
Achieving transition to green growth model: some
certainties, many open questions
What we know for sure
 Public policy is pivotal
• needed to impulse behavioral changes and to reconcile growth strategies
and environmental constraints
• Methodology is unclear, no best practices available
e.g factoring environmental externalities in public policy tools
 There is no silver bullet to address environmental challenge
 Achieving is not getting there, but getting there before the
others
• It is also a competitiveness issue
What seems open
 How to leverage SA’s comparative advantages in the setting up
of a Green growth model…
• SA is endowed with many assets which should be benefited from: skilled
and young human capital, abundant resources, geopolitical situation, etc.
 …while building resilience for its economy?
• Over reliance on depletable or scarce resources (fossil energy, water…)
could jeopardize the sustainability of development trajectory
As far as a DFI like AFD is concerned
AFD’s work builds on substantial European experience and recent
activities in designing long term public policies factoring
environmental externalities, in setting up relevant institutions, etc.
Thus, what AFD contemplates is:
complementarily to its traditional investment financing on
preferential terms for public and private entities
To support the necessarily innovative institutional process, in:
•
•
•
accompanying policy makers
building tailor-made operations
helping investigate and establish social engineering, planning methods,
public policy tools for the implementation of green New Deal
e.g AFD’s support to Mexico Climate Change Program
• Financing of the National Climate Change Plan 2009-2012 (€ 185 M)
• Technical cooperation in spatial planning, forestry, methodology
(monitoring & evaluation, social engineering, performance indicators for
next climate change plan)
e.g vertical funds for geothermal power in Kenya or Indonesia
e.g massive credit lines for SMEs in Central Asia
Conclusion: low carbon growth model
requires platforms for institutional
innovation
 Transition towards a green economy is not an end in itself: in a
global economy, competing for resources, competing for jobs
localization, it is about being at the forefront of such a shift
 In this regard, undoubtedly, SA takes it seriously:
• IRP2: energy planning for next 20Y
• National strategy on Climate Change due 4th quarter 2010
• COP17 in Johannesburg in 2011
 In face of public policy challenges associated with green
growth model implementation, we, as stakeholders, collectively
have to imagine new instruments, rooted in SAn context, and
provide, along with financial resources, platforms for experience,
practices, expertise sharing