Agence Française de Développement
INDIA
Chantier du métro de Kochi © Kochi Metro Rail Limited
AGENCE FRANÇAISE DE DÉVELOPPEMENT
INDIA
India India has a surface area of 3 million km2 (six times the size of France), with a population of over 1.2 billion inhabitants. The country has been experiencing sustained growth since an extensive program of economic reforms was implemented in the 1990s. If this trend continues, India should become one of the fourth largest world economies over the next twenty years.
Reconciling economic development and the management of its impacts on the environment is a core challenge for India.
However, it is still a developing country in many respects. Despite the emergence of a dynamic middle class, a large proportion of the population is still living under the poverty line and the level of GDP per capita remains low. The priorities of the successive governments have been economic development and access to basic services for its population (food, decent housing, water, sanitation, electricity, transport), which are an overriding challenge. The Government of India has set out to address both the huge needs of this sector and the current deficit by adopting ambitious investment programs to develop infrastructure. Furthermore, economic growth has major impacts on the environment in a country which is already particularly vulnerable to the consequences of climate change. Reconciling economic development and the management of its impacts on the environment is a core challenge for India, which has made it central to its national contribution (Intended Nationally Determined Contribution – INDC) published prior to COP 21.
Landfill, New Delhi © AFD, Cheikh Dia
AFD Group’s commitment Agence Française de Développement (AFD) has been operating in India since 2008, by developing cooperation actions for sustainable development and the fight against climate change. It has committed more than EUR 1.3bn over these 8 years in the form of sovereign and non-sovereign loans.
AFD’s commitments at April 2016 (EUR M) Water and sanitation EUR 161m
Biodiversity
Green energy
4%
36%
EUR 462m
12%
EUR 54m
Total EUR
1,302bn
Urban
EUR 625m transport
48%
AFD has been entrusted with a strategic mandate tailored to the Indian Government’s priorities. It is implemented through three main focuses for cooperation: ■■ Promote sustainable and integrated urban development; ■■ Encourage energy efficiency and renewable energy development; ■■ Conserve the country’s biodiversity and natural resources. AFD’s financing is also a vehicle for sharing France’s expertise and innovative solutions, which Indian partners are seeking for targeted skills transfers. In addition to the loans it allocates in India, AFD can set up technical assistance programs which aim to build the expertise of its counterparties. AFD benefits from a close partnership with the European Union for this purpose in the context of fund delegations. PROPARCO, AFD’s private sector financing arm, supports investment in the sectors of energy, health, education, microfinance, the social and solidarity economy, as well as the agri-food chain, and implements both debt and equity instruments. PROPARCO earmarks two-thirds of its investments in India for renewable energy development and energy efficiency. With some EUR 390m of financing allocated at the end of 2015, India has become one of the flagship countries for its action.
AGENCE FRANÇAISE DE DÉVELOPPEMENT
INDIA
Developing the infrastructure network for sustainable cities For several years now, India has been facing a rapid growth in the phenomenon of urbanization, which is mainly due to massive rural exodus. This increasing urbanization has put considerable pressure on existing infrastructure, which has consequently limited the quality of municipal services. Promoting mobility and developing environmentally friendly electricity, water and waste treatment networks are major challenges for economic growth and poverty reduction. AFD’s action is in line with the Indian Government’s priorities and consequently aims to support Indian cities in this process.
Promoting the development of low-carbon urban transport In Indian cities, demographic trends, combined with the rising living standards of the middle class, lead to an exponential increase in the number of personal vehicles and therefore worsen congestion and pollution.
Since 2012, AFD has cofinanced phases I and II of the Bangalore metro, with a total of EUR 310m, for the construction of 72 km of railway lines. Major impacts are expected in terms of public health, urban productivity and economic attractiveness.
Consequently, the development of low-carbon urban infrastructure, particularly in the transport sector, is central to AFD’s mandate in India.
EUR 3.5m of technical assistance financed by the European Union has been provided to the three cities of Nagpur, Kochi and Ahmedabad as part of the international “MobiliseYourCity” initiative. Its implementation in India includes improving urban transport plans, which aim to achieve lower-carbon urban mobility trajectories.
A metro to improve social and environmental balances in Kochi AFD is providing EUR 180m of cofinancing for the construction of a light metro in Kochi over a 26 km viaduct section, including 22 overhead stations. This project will benefit 360,000 passengers a day starting in 2018 and 550,000 passengers a day in 2033. It will lead to an increase in transport facilities and a development of the living environment that respects the urban heritage, as well as the health and safety of residents. The use of the metro will significantly reduce both air pollution and CO2 emissions (65,000 tons a year from 2024 onwards). EUR 0.8m of technical assistance has allowed a partnership to be established between the cities of Kochi and Lyon (France) on topics related to operation and maintenance and the integration of modes of transport.
Participation in the “Smart City” program AFD is managing a EUR 0.7m technical assistance program in India, with an approach based on supporting national policies and sharing French expertise in sustainable urban development. The objective is to help the cities of Nagpur, Chandigarh and Pondichery prepare and implement their projects under the “Smart City” national program, which aims to meet the challenges of urban service performance and efficiency, particularly in terms of transport, energy and the environment.
Bangalore Metro © NMC
AGENCE FRANÇAISE DE DÉVELOPPEMENT
INDIA
Developing water and sanitation networks The national water policy adopted by the Indian Government in January 2012 aims to meet ever-increasing demand and eliminate the pollution of water resources. India’s federal States are seeking support on aspects concerning the optimization and effectiveness of the public service in order to address this strong pressure. AFD has provided EUR 94m of financing to optimize the city of Jodhpur’s drinking water distribution network, with an approach that focuses on energy and water efficiency and on improving the service for residents. Furthermore, AFD is providing EUR 200m of financing for a program to address the challenges of the water and sanitation sector in the city of Pondichery and its outskirts. This project’s sanitation component will safeguard water resources and reclaim the city’s highly polluted shores.
Water treatment plant in Jodhpur © AFD, Cheikh Dia
AFD aims to promote mobility and develop electricity, water and waste treatment networks in Indian cities in an environmentally friendly manner.
Supporting integrated natural resources management Biodiversity conservation India is home to an extremely wide variety of flora and fauna owing to its surface area and relief and has two of the world’s eight largest remarkable biodiversity hotspots: the Western Ghats and Eastern Himalaya. Despite a strong legislative framework, India’s vast forestry resources are now endangered and, along with them, the rich biodiversity they shelter. AFD is supporting the proactive policy of India and the State of Assam, in the northeast of the country, which promotes a sustainable and participatory management of its forest, combining exploitation and preservation. AFD is financing, through a EUR 54m loan, the reforestation of damaged forest areas, the preparation of concerted forest management plans involving local communities more, and awareness-raising and training for the administrative staff of the State of Assam in terms of the importance of preserving the natural heritage.
Assam Forest © AFD, Emmanuel Fourmann
AGENCE FRANÇAISE DE DÉVELOPPEMENT
INDIA
Contributing to clean solutions for energy security AFD is supporting the Indian Government for its commitments to combat climate change, with a focus on developing renewable energies and improving its energy efficiency.
Supporting the growth of renewable energies India’s energy demand is continuing to increase in a context of sustained economic growth, whereas the country’s resources are no longer sufficient to meet this demand. This results in increased dependence on fossil fuel imports, which causes economic imbalances and holds back the country’s development. In addition, the high proportion of fossil fuels in the national energy balance is increasingly contributing to climate change: India is now the world’s 3rd largest greenhouse gas emitter and has one of the highest emission growth rates in the world. In this context, the Indian Government has committed to an ambitious policy to develop alternative energies, which should account for 40% of its energy mix by 2020. AFD is supporting these efforts to promote investments to generate electricity based on renewable energies. In this respect, it has provided the Indian Renewable Energy Development Agency (IREDA) with financial and technical support via two “green” credit lines totaling EUR 170m. This financing has been earmarked for small-scale hydro, solar, wind, cogeneration and biomass projects led by private developers. This support is also provided via EUR 80m of financing allocated to Himachal Pradesh Power Corporation Limited (HPPCL) for the development of two run-of-river hydropower plants in Himachal Pradesh, which will contribute to developing this State’s clean energies and to meeting the anticipated strong growth in electricity demand.
Green finance: A tool to make India’s financial sector the engine for sustainable growth AFD is supporting several Indian public finance institutions in an approach to promote responsible investments via four “green” credit lines totaling EUR 320m. Most of this financing is combined with technical assistance, including market studies, analyses of reallife cases and workshops. Over 450 energy efficiency projects and 15 renewable energy projects were financed between 2011 and 2015. The savings in terms of greenhouse gas emissions are estimated at 33 million teq CO². In addition to these credit lines, AFD can offer its partners other financial tools, such as guarantee mechanisms or insurance products. These tools facilitate access to financing for companies in sectors which are still considered risky, such as green energy or the environment.
Strengthening the energy performance of public and private partners As energy savings are another essential driver for the Indian Government’s action to limit the environmental and financial costs of the country’s development, AFD promotes the implementation of energy efficiency measures with diverse partners, the private sector and public entities. For example, AFD has partnered with the public financial institution Small Industries Development Bank of India (SIDBI) with a EUR 50m loan to promote access to credit for SMEs which make investments to save energy. AFD is also supporting the public energy service company (ESCO), Energy Efficiency Services Limited (EESL), via EUR 50m of financing. The aim is to promote investments in energy savings made in priority in the street lighting and public buildings sectors.
Wind turbines in Jodhpur © NMC
AGENCE FRANÇAISE DE DÉVELOPPEMENT
INDIA
PROPARCO, AFD’s subsidiary dedicated to private investment, promotes private investment in emerging and developing countries in order to boost growth, promote sustainable development and reach the Millennium Development Goals. Its financing is tailored to the specific needs of investors in the productive sector, financial systems, infrastructure and private equity investment.
The French Facility for Global Environment (FFEM) is a financial instrument of French cooperation and development policy, dedicated to the protection of the global environment in developing countries and emerging markets.
www.proparco.fr
www.ffem.fr - ffem@afd.fr
Agence Française de Développement https://www.facebook.com/AFDOfficiel
With funds of €90 million for 2015-2018, the FFEM supports innovative work in developing countries in the following areas: climate, biodiversity, international waters, soil degradation including deforestation, persistent organic pollutants and the ozone layer. At the end of 2015, the FFEM had received financial pledges of €331 million, with 285 projects in their portfolio, 67% of which are in Africa and the Mediterranean.
@AFD_France https://twitter.com/AFD_France
AGENCE FRANÇAISE DE DÉVELOPPEMENT
NEW DELHI REGIONAL AGENCY
5 rue Roland Barthes 75598 Paris Cedex 12 – France Tel. +33 1 53 44 31 31 Fax +33 1 44 87 99 39 www.afd.fr
19 A, Rajdoot Marg, Chanakyapuri New Delhi 110 0 21 - India Tel. + 91 11 42 79 37 00 Email : afdnewdelhi@afd.fr inde.afd.fr
Agence Française de Développement https://www.youtube.com/user/GroupeAFD
Creation: Planet 7 – June 2016
Seafront, Pondichery © AFD, Nicolas Fornage
10-31-1482 / PEFC certified / This publication comes from sustainably managed forests and certified sources. / pefc-france.org
Agence Française de Développement (AFD), a public financial institution that implements the policy defined by the French Government, works to combat poverty and promote sustainable development. AFD operates on four continents via a network of 75 offices and finances and supports projects that improve living conditions for populations, boost economic growth and protect the planet. In 2015, AFD earmarked EUR 8.3bn to finance projects in developing countries and for overseas France.