March 14th 2019, Nairobi – on the occasion of the One Planet Summit in Nairobi (OPS), the Agence française de Dévelopement (AFD) and the Trade and Development Bank (TDB) signed a Statement Letter formalizing their commitment towards a USD 120M credit facility which will be targeting climate-oriented projects on the African continent. The signing is taking place on the side-lines of the fourth session of the UN Environment Assembly (UNEA-4).
The 2015 Paris Climate Agreement and the adoption of the Sustainable Development Goals (SDGs) have given a renewed impetus to development finance, focusing in particular on the tremendous importance of the Climate Agenda and on the convergence of national and international agendas in terms of sustainable development. The activities of multilateral and bilateral development banks such as TDB and AFD clearly fall under these renewed mandates.
With this Statement Letter, AFD and TDB are expressing their interest to pursue discussions regarding the structuration of a USD 120M credit facility in 2019. The projects that will be targeted will be climate-oriented and will include renewable energy projects, lower-carbon and energy efficiency projects, agriculture, forestry and land-use, non-energy GHG reductions, water, waste management, resilient infrastructure and buildings.
Both institutions are also committed to jointly promote the role of multilateral and bilateral banks for climate finance.
AFD and TDB are both members of the International Finance Development Club (IDFC), which has a strong focus on the climate agenda. AFD will facilitate and support TDB’s increased engagement in this area of focus, including by harmonizing its climate finance data with IDFC methodologies in advancement of the Paris Agreement objectives.
According to Rémy Rioux, AFD’s CEO and Chairman of IDFC: “AFD is committed to 100% compatibility with the Paris Agreement, which calls for low carbon resilient development pathways for all. With this credit line of USD 120 M, we are happy to support TDB in its endeavor for financing inclusive and sustainable climate strategies for SMEs in renewable energy, agriculture, resilient infrastructure, and more. AFD and TDB are members of International Development Finance Club (IDFC), the leading network of 24 national and regional development banks, totaling USD 4 trillion in assets, and USD 850 billion of annual commitments. IDFC doubled its climate finance commitments since 2015, reaching USD 200 billion in 2017. Our network demonstrates that development banks can champion climate-friendly investments, a key message of the One Planet Summit.”
“TDB and AFD’s relationship goes back some 8 years ago” says TDB President and Chief Executive, Mr. Admassu Tadesse. “The first cooperation agreement was signed in 2012, and then followed by a USD 75M credit facility and USD 0.5M technical assistance program focused on infrastructure and project finance in Africa in 2017. This supported the implementation of three renewable energy projects among others. The growing partnership with AFD will enable TDB to continue stepping-up its climate efforts, which have been growing robustly in recent years, which is reflected in the fact that 69% of TDB’s energy portfolio is in renewables.”