PARIS CLIMATE 2015 - issuing of climate bonds by the AFD [fr]
AFD issues its first “Climate Bonds”, an innovative and incentive-giving financial tool to support development projects that work to combat climate change.
Paris, 11 September 2014 – Just a few days ahead of the opening of the international Climate Summit in New York, organized by the Secretary-General of the United Nations, in which it is participating, AFD has issued Climate Bonds for the first time in its history and the operation has met with success. These Climate Bonds are an innovative and incentive-giving financial tool designed to support development projects that actively work to combat climate change. In one day, AFD has raised a billion euros on financial markets.
Drawing on its experience and climate commitment, Agence Française de Développement has proposed to investment stakeholders, particularly socially responsible stakeholders, an investment in a bond that comprises specific and robust standards for the fight against climate change, which are more demanding than the usual international standards for green bonds.
Indeed, the Climate Bond will finance AFD’s action in support of projects to combat climate change that have a direct impact on reducing greenhouse gas emissions, which are estimated via a systematic and rigorous assessment of the carbon footprint of the projects it finances.
“Today, development assistance and its financing must play an incentive-giving role in mobilizing financing for the fight against climate change. Agence Française de Développement is convinced of the potential of this market, which is mobilizing an increasing number of companies and international actors. AFD actively contributes to creating tools and structuring international standards to measure the carbon footprint of the projects it finances to support sustainable, low-carbon development”, points out Pierre Forestier, Head of the “Climate Change” Division at Agence Française de Développement (AFD), and responsible for defining and steering the strategy to combat climate change.
At the international Climate Summit in New York, financial issues and the question of the standards and incentives that are likely to increase the outreach of these instruments will be central to the discussions. All the levers and tools must be mobilized to promote development trajectories that emit less greenhouse gas and are best placed to meet the economic and social challenges.
About the methodology for Climate Bonds defined by Agence Française de Développement
This methodology has been subject to an external opinion from the non-financial rating agency VIGEO (*). The approach, which fits in with the process to standardize the market, is in line with the Green Bond Principles: justification for the use of funds, monitoring of flows, external opinion and, finally, robust reporting. It comprises specific “climate” criteria and accountability. AFD’s annual CSR Report (Corporate Social Responsibility) will report on the climate aspects of the projects that are supported, by sector and geographical area, and concerning environmental and social risk management. This will all be verified by AFD’s auditors.
(*) Can be consulted in the Finance section of AFD’s website.
AFD, the Agence Française de Développement, is a public development-finance institution that has worked for seventy years to alleviate poverty and foster sustainable development in the developing world and in the French Overseas Provinces. AFD executes the French government’s development aid policies.
Working on four continents, AFD has seventy-one field offices and bureaus, including nine in France’s overseas provinces and one in Brussels. The Agency provides financing and support for projects that improve living conditions, promote economic growth, and protect the planet.
In 2013, AFD committed €7.8 billion to projects in developing and emerging countries and in the French Overseas Provinces. These AFD-financed projects will provide schooling for children, improve maternal health, support farmers and small businesses, and bolster access to drinking water, transportation and energy. These newly-funded projects will also help mitigate climate disruption by abating nearly 3.3 million metric tons of carbon dioxide-equivalent annually.