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					7th Global Forum on Sustainable Energy
Vienna – November 21-23, 2007




Promoting Energy Efficiency in
 Developing Countries:
AFD’s (C)lean Energy Strategy

                                                         Dominique RICHARD
                                     AFD / Infrastructures and Environnement


  Global Forum on Sustainable Energy – Vienna – November 23, 2007
                Who are we? AFD Group

 French ODA Agency: Public Co & Bank
      AFD
      PROPARCO: financing of the private sector
      French GEF secretariat
 Present in 80+ countries
 EUR 1.7 billion committed in 2006
 Wide range of financing tools
      Equity financing
                                                                  Private
      Private sector loans
                                                                  Sector
      Partial risk guarantees, loan guarantees
      Guarantees on loans in local currency
      Non sovereign loans
      (concessional or market conditions)
      Sovereign loans
      (from very concessional to market conditions)               Public
      Grants (projects, study funds)                              Sector
 Untied aid

Global Forum on Sustainable Energy – Vienna – November 23, 2007
                       AFD General Strategy


                            Global Public Goods




Economic Growth                                                     Poverty Reduction

                    What is the challenge regarding energy?
  Global Forum on Sustainable Energy – Vienna – November 23, 2007
                      AFD Energy Strategy

                          « (C)lean » Energy
           DSM, Energy efficiency and Renewable energy




  Energy security                                             Access to Energy
 Dams, Interconnections,                                           Grid/Off-grid
    PPP, Regulation                                               Local Bio-fuels

Global Forum on Sustainable Energy – Vienna – November 23, 2007
                                 AFD Group
                               Energy Portfolio
        Million €
        Millions EUR
      600
                    Clean Durable
                   Energie energy
      500
                   Accès pour tous
                    Access to energy
      400
                   Energie compétitive et /sécurisée
                    Competitive energy energy
      300           security

      200

      100
        0
         2002              2003              2004                 2005   2006

        40% of total portfolio within energy agenda

Global Forum on Sustainable Energy – Vienna – November 23, 2007
                                     AFD Group
                                   Energy Portfolio

                       Annual average commitments (M EUR)
                                             2002-2006
       commitments
       Engagements
           (M€)                                            Energie Durable
                                                           Clean energy
140
                                                           Accès pour tous
                                                           Access to energy
120
                                                           Energie compétitive et sécurisée
                                                           Competitive energy / energy security
100

 80

 60

 40

 20

  0
        Sub-Saharan
        Afrique Sub-      Asia
                          Asie         Caribbean    Mediterranean/
                                       Caraibes / / Méditerranée -   Multi-country/
                                                                      Multi-pays          Other
                                                                                        Outre-mer
           Africa
         saharienne                                  Middle East
                                      Latin America Moyen Orient
                                       Amérique                        Regional
                                        Latine



      Global Forum on Sustainable Energy – Vienna – November 23, 2007
Promoting (C)lean Energy in the
    Developing Countries




Global Forum on Sustainable Energy – Vienna – November 23, 2007
 Change energy model, not climate

3 constraints impose new energy
strategies both in developed and
developing economies
    World discovering energy market
    tensions and high prices
                                                             d    lean
    Climate change + growing local impacts                en
    Energy security and long term                       tr
    sustainability needs                                          efficient
Change energy model (not climate)
“(C)lean and sustainable”                                         renewable
    Demand-side management
    Energy efficiency
    Renewable energy diversification &
    scaling up



Global Forum on Sustainable Energy – Vienna – November 23, 2007
 Change energy model, not climate


There is no “free ride”
Energy prices not reflecting real costs
     No provision for renewal of fossil energy
     No provision for environmental risks / climate change & local
     environment
Need to change energy model across sectors
     Without hindering economic growth
     While achieving sustainable energy access
Our challenge = Help the market achieve
this (r)evolution

Global Forum on Sustainable Energy – Vienna – November 23, 2007
Growth – Climate – Fossil resources: which way?




                                                  Business as usual scenario


                                                  Too much fossil fuels for the
                                                  climate


                                                  Not enough fossil fuels for
                                                  economic growth




                                                                   Source : Greenpeace

 Global Forum on Sustainable Energy – Vienna – November 23, 2007
Disconnect growth and fossil fuels consumption




                                                                    Lean
                                                                     and
                                                              efficient energy


                                                             Renewable energy

                                                         Regulation of fossil fuels
                                                            & GHG emissions
                                                              + CO2 storage




                                                                            Source : Greenpeace

 Global Forum on Sustainable Energy – Vienna – November 23, 2007
                (C)lean Energy:
           more Demand-Side oriented
                              (C)LEAN ENERGY MANAGEMENT

                  BUSINESS AS USUAL

  Primary energy                            Final energy                           Energy
   -------------------                     -------------------                   services
        Fossil                               Electricity                      -------------------
    coal, gas, oil                                                                Industry
                                                 Heat
                                                                                Transport
       Fissile                                   Fuel
                                                                               Residential /
    nuclear power        Transformation,                         Converters    Commercial
                            transport                            (end-uses)



     Renewable                                                                Demand-side
       energy                          Energy efficiency                      management
  Wind, solar, hydro,
     geothermal
      Biomass


Global Forum on Sustainable Energy – Vienna – November 23, 2007
                          (C)lean Energy:
                          across sectors
          Primary & Final Energy                             Energy Services

                                                                  INDUSTRY
                  ENERGY
                                                          Process modernisation
       Renewable power generation                         Energy efficient devices
     Wind, Hydro, Geothermal, biomass
                                                                 ESCOs
              Cogeneration
        Demand Side Management                        RESIDENTIAL / COMMERCIAL
      Sustainable rural electrification                      Urban Planning
              (including PV)                             Energy efficient building
                                                       Municipal waste energy uses
       AGRICULTURE / FORESTRY                               Heating networks
       Biomass management plans
                                                           TRANSPORTATION
              Forestry Plans
                                                               Mobility plans
       Water/Energy saving schemes
                                                         Public transport / Railways
                                                                   Bio-fuels




Global Forum on Sustainable Energy – Vienna – November 23, 2007
         (C)lean Energy: Sector Matrix

                         Demand management           Energy Efficiency        Renewable Energy

       Industry         Consumption audits        Efficient equipment       Agro-industrial waste
                        Sector benchmarking       and processes
                        (quotas)                  Recovery of heat
                                                  Variable frequency
                                                  engines
       Housing          Urban planning            High efficiency           Solar water heaters
                        Consumption               construction              Biomass heaters
                        measuring                 Bioclimatic housing       Geothermal heating
                        Labels                    Efficient appliances
      Transport         Urban transport           Sober vehicles            Pedestrian/bicycle
                        masterplan                Railway electrification   Bio-fuel vehicles
                        Modal transfers (road-    Combined rail/road
                        rail)                     freight
                        Alternatives to motor
                        vehicles
       Energy           Tariff structure review   Cogeneration              Renewable electricity
                        Fiscal and regulatory     Distribution loss         Bio-fuels
                        incentives                reduction
  Agriculture Forest    Regulation of             Water saving irrigation   Energy related
                        household energy          Non plow techniques,      cultivation
                        resources                 organic fertilizers       Recovery of vegetal
                                                                            residue

Global Forum on Sustainable Energy – Vienna – November 23, 2007
                           (C)lean Energy:
                       associating “hard / soft”

ENERGY
SAVINGS                                                       R&D     New process (?)

                                     Equipment
                                 adjustment / retrofit
                         Equipment
                        management



              Individual &
             social behavior
              management
                                                                            INVESTMENT


        Diagnosis
                  SOFT                                         HARD
   Global Forum on Sustainable Energy – Vienna – November 23, 2007
(C)lean Energy: according to the context



                                                 + Lean
                +
                Ef
                    fic
                     ie
                       nt
            s
     + Acces




                                                                         AIE



                                                                   Consumption: kWh / cap / year
 Global Forum on Sustainable Energy – Vienna – November 23, 2007
            Adapting financial tools to
            “climate change” maturity



     Grants     Concessional        Refinancing of Non-concessional             Financial
                    loans         credit institutions   loans                    markets

                                                                                 Mature
          Awareness     Demonstration                             Emerging      markets on
          raising       Pilot projects        Industrialisation    markets   climate change
          + R&D




                            Public policies




Global Forum on Sustainable Energy – Vienna – November 23, 2007
                  Adapting financial tools
                      to Innovation

                 Innovation
                                                                        Demand side management
                                                                        Demand side management
                                                       Energy efficiency
                                                       Energy efficiency
                                            Biomass power generation
                                             Biomass power generation
                         Bio-fuels for households
                         Bio-fuels for households                    Bio fuels for transport
                                                                     Bio fuels for transport


                                            Renewable energy
                                            Renewable energy
        Rural electrification
        Rural electrification

                                          Improvement of existing process
                                           Improvement of existing process
                                         Urban distribution
                                                                                                  Financial
                                         Urban distribution
                                                                                                   return

                                                         HV lines // Dams
                                                         HV lines Dams
                                    Post crisis
                                    Post crisis                                    Thermal IPPs
                                                                                   Thermal IPPs




Global Forum on Sustainable Energy – Vienna – November 23, 2007
                     Adapting financial tools
                         to Innovation

                    Innovation
                                                                           Demand side management
                                                                           Demand side management
Development                                               Energy efficiency
                                                          Energy efficiency
 Assistance                                    Biomass power generation
                                                Biomass power generation
                            Bio-fuels for households
                            Bio-fuels for households                    Bio fuels for transport
                                                                        Bio fuels for transport


                                               Renewable energy
                                               Renewable energy
           Rural electrification
           Rural electrification                                                                  Private sector
                                             Improvement of existing process
                                              Improvement of existing process
                                            Urban distribution
                                                                                                      Financial
                                            Urban distribution
                                                                                                       return

                                                            HV lines // Dams
                                                            HV lines Dams
                                       Post crisis
                                       Post crisis                                    Thermal IPPs
                                                                                      Thermal IPPs




   Global Forum on Sustainable Energy – Vienna – November 23, 2007
                     Adapting financial tools
                         to Innovation
                                                              « Innovation premium »

                    Innovation
                                                                           Demand side management
                                                                           Demand side management
Development                                               Energy efficiency
                                                          Energy efficiency
 Assistance                                    Biomass power generation
                                                Biomass power generation
                            Bio-fuels for households
                            Bio-fuels for households                    Bio fuels for transport
                                                                        Bio fuels for transport


                                               Renewable energy
                                               Renewable energy
           Rural electrification
           Rural electrification                                                                  Private sector
                                             Improvement of existing process
                                              Improvement of existing process
                                            Urban distribution
                                                                                                      Financial
                                            Urban distribution
                                                                                                       return

                                                            HV lines // Dams
                                                            HV lines Dams
                                       Post crisis
                                       Post crisis                                    Thermal IPPs
                                                                                      Thermal IPPs




   Global Forum on Sustainable Energy – Vienna – November 23, 2007
              (C)lean Energy:
      A regulatory & financial toolbox
Non financial regulatory tools
     Persuasive : laws, rules, imposed quotas
     Incentive based : norms, voluntary agreements, labels,
     communication
Financial / market based tools
     Tariffs : Specific tariffs for renewable energy or energy efficient
     transport modes
     Fiscal : Tax reductions, income tax credits, accelerated
     depreciation (households)
     Budgetary support
          Support for policy & decision making, research and development, pilot and
          demonstrative projects, etc.
          “Bonified” credit lines
     Cap & trade : Clean Development Mechanisms – Carbon Funds
Global Forum on Sustainable Energy – Vienna – November 23, 2007
                 A few examples of
                AFD funded projects




Global Forum on Sustainable Energy – Vienna – November 23, 2007
Interconnection et geothermal energy in the
Caribbean Sea
                                           2005 Preliminary study (AFD/ADEME)
                                           2007 Several partners involved
                                            •    “Surface” study (1.1 M€)
                                                 ADEME / Interreg / BRGM / Regions
                                            •    Drilling measuring campaign (3.5 M€)
                                                 French GEF / European Commission
                                            •    Assistance to project owner (0.5M€) AFD

                                           2009 « Geo-Caribbean project »
                                            •    Geothermal production plant in Dominica
                                                 and interconnection with Guadeloupe and
                                                 Martinique
                                            •    250 M€ - 350 M€


            Pipeline: geothermal energy projects in
            Indonesia and East Africa (Rift)
  Global Forum on Sustainable Energy – Vienna – November 23, 2007
Credit line to Industry in Turkey

Non-sovereign loan to the TSKB bank:
50M€ (2004)
Eligible sectors to refinancing:
    Renewable energy
    Distribution of natural gas to isolated areas
    (switch from fuel-oil to natural gas)
    Energy efficiency in industry
Partial risk covered by the bank



Pipeline: Dedicated credit lines in
Tunisia, China, Jordan, Indonesia

Global Forum on Sustainable Energy – Vienna – November 23, 2007
  Energy Efficient Building Program in
                 China
Objective (1997)
Save energy in social buildings
Develop local energy efficient norms /
standards
Dissemination of advanced technology,
materials, know-how
Results (2007)
1 million m2 concerned (300 M€)
> 50% of saved energy
Investment cost for energy savings topics: 27 M€ (9%)
of which French GEF grant: 2.7 M€ (10%)

          Pipeline: Energy efficient building in Lebanon,
          Tunisia, Thailand, Jordan
Global Forum on Sustainable Energy – Vienna – November 23, 2007
                               Thank you…


                                         www.afd.fr



Global Forum on Sustainable Energy – Vienna – November 23, 2007

				
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