AFD in China

Evolution of AFD’s total commitments and disbursements in China {in EUR million} 1200

1,029.1 1000

898.5 777.5

800

674.5 2

696.2

554.5

600

520.3 400

392.2

324.5 240.5 249.5

180.5

200

68.5

35 0

0

2003

8.9

0

2004

2005

2006

95.4

50.4

31.1

2007

2008

total commitments

2009

XXX

2010

2011

2012

total disbursements

Situation as of 31.12.2012

Allocation of AFD’s commitments by sector

373.5 M€ / 34.5%

energy efficiency

368 M€ / 34%

sustainable urban Development

115.6 M€ / 11%

rural Development and biodiversity

123 M€ / 11%

clean energies

49 M€ / 4.5%

regional integration in the Greater Mekong subregion (GMS)

A

gence Française de DÊveloppement (French Development Agency -AFD) has been operating in China since 2004 under a partnership with the Chinese Ministry of Finance (MOF) and the National Development and Reform Commission (NDRC). Its activities aim to develop cooperation in the fight against climate change and the promotion of sustainable development, which are priority sectors in the Sino-French strategic dialogue.

Considering the major environmental challenges in China, AFD's objective is to promote the country's transition towards a low-carbon, environmentally friendly economy.

It meets this objective by implementing exemplary and replicable projects to: Mitigate the environmental footprint of cities by developing adapted urban infrastructure and services.

Promote low-carbon development by improving energy efficiency and developing clean energy.

In addition, AFD-financed projects offer an opportunity to develop Sino-French partnerships by mobilizing French expertise and know-how in order to support China's transition towards a low-carbon and environmentally friendly economy.

Conserve natural resources and biodiversity and assist Chinese local authorities in integrating ecological considerations into their territorial planning programs.

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Mitigating the Environmental Footprint of Cities AFD’S sustainable urban development projeCts in China District Heating

Mongolie Intérieure

Pékin Shanxi

Hebei

Taiyuan Ningxia

Jinzhong

4

Building retrofitting

Tianjin

Integrated Multimodal SOUTH Transport Hub KOREA

Jinan Shandong

Gansu Shaanxi

Jiangsu

Henan Anhui

Shanghai

Hubei Zhejiang Chongqing Hunan

Jiangxi

Fujian

China has 690 million city dwellers in 2013, i.e. an urbanization rate of over 50%. If the pace of urban expansion experienced over the past thirty years continues, there will be a billion urban dwellers by 2030.

This extremely rapid and massive urban transition goes hand in hand with enormous environmental challenges.

AFD’s activities aim at supporting sustainable urban development in China, particularly in the following three areas:

Urban planning will determine the living habits for decades to come, especially for transportation, which will be structured according to the pattern and shape of the city.

– T he development of public transport infrastructures towards sustainable transport;

– T he improvement of energy efficiency in buildings and urban services;

– E ffective water and sanitation services.

Supporting innovation in district heating Heating networks in China are three times less energy efficient than those in industrialized countries. Heating counts for 12% of primary energy consumption, which is mainly coal-based, and poses significant challenges with regards to emissions of greenhouse gases and hazardous pollutants (e.g. sulfur and soot).

In the 2000s, the Chinese authorities undertook measures to modernize the sector, which include the establishment of centralized networks connected to large-scale and more efficient heating plants (boiler systems and cogeneration plants), support for the normalization of heating industries and energy-saving tariff methods.

ACHIEVEMENTs

impacts

AFD has granted loans to support the rehabilitation of district heating network in three cities: Jinzhong and Taiyuan (Shanxi Province) and Jinan (Shandong Province). These operations have identified substantial energy-saving potential in this sector, contributed to the adoption of innovative, high performance technical solutions and brought about remarkable improvements in project design.

✓ Annual emission reduction of approximately 800,000 tons of CO2 . ✓ Reduction of local pollutant emissions (over 3,000 tons of SO2 and over 6,000 tons of soot a year). ✓ Positive effects on public health and the quality of life for local communities.

Examples of innovative technologies:

– Installation of « skids » (box-type heat exchange station) – Establishment of automatic control and energy management centers – Utilization of high-efficiency pumps

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Promoting low-carbon sustainable cities in China The case of Wuhan

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Wuhan, capital of Hubei province, was designated as a pilot city for the implementation of a cooperation agreement to promote sustainable urban development signed between the French Ministry of Ecology and the Chinese Ministry of Housing and Urban-rural Development. AFD is implementing two demonstration projects in this city.

Energy rehabilitation of public buildings The project followed an AFD-funded study on the financial mechanisms for energy rehabilitation in buildings in Wuhan, conducted in partnership with the Commission of Construction of Hubei and Huazhong University of Science and Technology.

Multimodal Transport Hub The project aims to promote intermodality in Greater Wuhan by encouraging the use of public transport. It involves the construction of a multimodal transport hub that coordinates different modes of transport (subway, train, urban buses, taxis, private cars and flights) and optimizes transfers.

This project to rehabilitate public and administrative buildings owned by the municipality of Wuhan aims to reduce greenhouse gas emissions through a more effective control of energy consumption in buildings. An energy performance contract (EPC) mechanism is included in the project in order to ensure that the initial energy-saving objectives are achieved.

➢ The hub will spread over 5 functional levels covering a total area of 278,000 m2. It will comprise transit areas, stations, parking lots, commercial centers, etc. ➢ The project will provide airport passengers with an integrated, varied and attractive choice of high-level public transport services. These services will also facilitate access to employment in the airport zone.

Promoting new technologies in water and sanitation projects With 21% of the world’s population but only 7% of water resources, China faces strong growth in water demand combined with severe pollution of its surface water and groundwater. The country thus needs to address major challenges in terms of access to good quality water and wastewater sludge treatment.

France, with its specialized companies and organizations in this sector, enjoys renowned expertise and know-how, as well as numerous international references.

AFD ’s activities in China aim to:

– P romote advanced solutions in water treatment, wastewater treatment and sludge management; – Recover greenhouse gas emissions from wastewater treatment and organic residues; – Reduce energy consumption in drinking water and sanitation services; – Preserve ecosystems and biodiversity by reducing pollutant discharges.

In the province of Sichuan, AFD has provided a loan for the reconstruction of drinking water and wastewater treatment plants as part of the postearthquake reconstruction program.

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Energy Saving and Clean Energy Development Hebei

Ningxia

Shandong

Qinghai

AFD’S clean Energy projects in ChinA Gansu

Henan

Shaanxi

Small Hydropower

Jiangsu

Yichang

Shanghai

Xiangyang

Sichuan

Biodigesters

Anhui

Hubei

Wuxi

Wind Power

Zhejiang Chongqing Hunan

Jiangxi Fujian

Guizhou

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Dali

Yunnan

Guangdong

Guangxi

Taiwan

Hong Kong Macau

Hainan

China is the largest energy consumer with a very high energy intensity (gross domestic product – GDP – per unit of energy use).

The country has set an objective of reducing its energy intensity by 40 to 45% by 2020 relative to 2005 levels. The control of energy production and utilization constitutes a major challenge for the country's transition towards a low-carbon economy.

In China, AFD supports projects to improve energy efficiency in the industrial sector and develop clean energy sources, such as biomass.

Green Credit Lines ( 55 projects in 20 Provinces ) AFD has granted loans totaling EUR 180 million through two Green Credit Lines, in partnership with Shanghai Pudong Development Bank, Huaxia Bank and China Merchants Bank. At the end of 2012, these two credit lines had financed 55 energy efficiency and renewable energy projects in 20 Chinese provinces.

ACHIEVEMENTs

This program has two objectives:

1

2

Provide financial support to public or private companies with strong energy-saving potential.

Build the capacities of banks to develop green finance in order to fight against climate change.

Conservation of Natural Resources and Biodiversity AFD’S ForEst and biodivERSITy projects in ChinA

forest projects

Jilin

Liaoning

biodiversity projectMongolie

Pékin

Intérieure

Tianjin

Shanxi

Hebei

Ningxia Shandong

Qinghai Gansu Shaanxi

Jiangsu

Henan Anhui

Shanghai

Hubei Sichuan

Zhejiang Chongqing Jiangxi

Hunan

Fujian

Guizhou

Yunnan Guangxi

Guangdong

More than a third of greenhouse gas emissions released into the atmosphere derive from agricultural and forestry activities. Yet when they are sustainably managed, agriculture and reforestation can play a major role in biological carbon sequestration.

AFD supports China’s public policies by implementing pilot projects in rural areas.

These projects have a strong impact on reducing greenhouse gas emissions and promote sustainable development in rural areas.

Taiwan

Hong Kong Macau

Sustainable Forest Management in Hunan and Yunnan ACHIEVEMENTs

The projects financed by AFD in the provinces of Hunan and Yunnan aim to contribute to economic development in rural areas and to the fight against climate change by rehabilitating forests and planting new forest areas. They include capacity building activities for local partners, as well as the application of forest carbon credits on the financial market.

HUNAN

– Rehabilitation of 10,000 hectares of bamboo; – Planting of 6,600 hectares of ligneous species (fir trees and endemic deciduous species); – Construction of roads in forest areas; – Creation of a fire prevention network.

YUNNAN

– Rehabilitation of degraded forests and new plantations (walnuts, bamboo, pine trees, etc.) covering a total area of 59,000 hectares in order to improve forest productivity.

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Preserving Biodiversity As one of the 17 countries in the world with the richest biodiversity, China is confronted with a rapid deterioration of its ecosystems. The situation today is critical, with China's rate of biodiversity loss higher than the world average. The main causes are the transformation of natural spaces, pollution, the overexploitation of natural resources and climate change. China has recently set out to address these issues by implementing policies to preserve its biodiversity.

AFD is supporting these initiatives by implementing projects to preserve fragile ecosystems, which allow China to benefit from French experience and expertise in this area.

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Wetland Restoration in China Wetlands constitute an area of transition between water bodies and landforms. They are an essential natural heritage with remarkable biological, hydrological, economic and social functions and value. As one of the most productive ecosystems on

ACHIEVEMENTs

the planet, wetlands play a vital role in water circulation and constitute a unique flyway for numerous waterfowls in the world. About 10% of the world’s wetlands are located in China.

Restoration of the world's largest reed marshes in Liaoning Province The world’s largest reed marshes are located in the Shuangtai estuary in Liaoning Province and cover an area of almost 300,000 hectares. They feature rich biodiversity and are the habitat of the largest community of Saunders's Gulls. This site has been labeled Ramsar (see box) since 2004. However, due to human activities such as agriculture and petroleum drilling, the reed marshes have recently been confronted with large-scale degradation and drought.

AFD has provided a loan to preserve and restore the hydraulic functions of the Shuangtai estuary by rehabilitating the hydraulic infrastructures and remediating polluted oil extraction sites.

The project also involves diversifying wetland economies through ecotourism.

The Ramsar Convention (The Convention on Wetlands of International Importance, especially as Waterfowl Habitat) is an international treaty ratified in 1971 in Ramsar (Iran) for the conservation and sustainable exploitation of wetlands. China is a contracting member of the convention with 41 sites listed.

Developing Sino-French Partnerships AFD aims to promote the emergence of SinoFrench partnerships through its activities.

France possesses world-renowned expertise in environmental equipment and services.

AFD-financed projects can thus call on competent French actors (consulting firms, enterprises, local authorities, research institutes and NGOs) in the domains of sustainable development, environmental

protection and the fight against climate change to share their experience and propose innovative and effective solutions to Chinese partners.

The French Global Environment Facility (FFEM) and French Environment and Energy Management Agency (ADEME) can also support the technical assistance components of certain projects.

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Green Solidarity project for post-earthquake reconstruction in Sichuan The partnership approach is embodied in the support AFD provided to China in the aftermath of the earthquake on 12 May 2008.

Under the reconstruction program, for which AFD allocated a USD 200 million loan, several French actors have been mobilized for the following projects:

Infrastructure:

Construction of water treatment plants, restoration of roads, bridges and river banks, waste collection.

Biogas:

Construction of 100,000 individual digesters for rural families.

French experts (NGO, consulting firm) have been involved. Their contributions have facilitated the implementation of the program and the introduction of international best practices, particularly as regards the environmental and social impacts. French high-tech water treatment equipment has been selected by the City of Deyang to equip its new water treatment plant.

AFD has also funded the publication of a “Guide for the Construction of Rural Houses", which focuses on seismic standards and energy efficiency. It was produced in cooperation with MOHURD and the Sichuan Provincial Commission for Construction.