The energy sector occupies a significant place in AFD Group’s activities. Over the period 2012–2016, €1.8 bn on average were dedicated each year to the sector (of which two-thirds to climate cobenefits), equivalent to around 20% of the Group’s commitments. In 2017, AFD Group committed nearly €2.4 bn to the theme of energy, including €1.9 bn by AFD and €0.5 bn by PROPARCO.
Massive deployment of the Energy Transition involves deep technological and societal changes: it stretches far beyond the question of electricity to include industry, construction, mobility, urbanism, agriculture, our consumption patterns, our leisure activities. The challenge is to bring about large-scale changes in the consumption and production of low-carbon energy and, at the same time, open up access to reliable energy services for over a billion people.
Unlike developed countries, which already have modern energy services accessible to all, developing countries need to dovetail several objectives: give as many people as possible access to reliable and efficient energy services, whilst also becoming less dependent on fossil energies so as to improve energy security and limit global warming.
To reconcile development challenges and climate challenges, a three-pronged action is necessary.
- Manage demand, energy sobriety and efficiency in all sectors
- Substitute fossil fuels with renewable or biosourced energy vectors
- Decarbonise power generation.
The investment decisions made today will shape the countries’ development trajectories and emissions for decades to come. The efforts devoted to each of these three pillars as well as the technological choices may vary, leading to different Energy Transition trajectories. These trajectories will thus differ depending on the context of each country at the economic (growth, energy mix, energy-intensive sectors, local resources, urbanisation model, etc.), social (access rate, share of biomass in domestic consumption, employment) and environmental level (pollution, deforestation, waste).
With two major commitments in the Group’s 2018–2020 Strategy – 100% Paris Agreement and 100% social link –, AFD Group is promoting the idea that the fight against poverty and inequality can be reconciled with the fight against climate change. It thus commits to ensuring that all its financing, in each country, is consistent with low-carbon and resilient development as defined in the Paris Agreement. It will ensure that all its actions contribute to strengthening social cohesion between populations and between territories, or at least not weaken this cohesion. This means working on reducing inequalities and improving access to essential goods and services, as well as on the economic integration of communities and territories. This is also the framework that AFD Group’s Energy Transition Strategy must be part of.
It is thus proposed that this Energy Transition Strategy focus on three key areas that mobilise three acceleration levers on which this consultation wishes to gather your reactions.
Theme status: Open