AFD’s strategy of intervention towards Sustainable Urban Transport in China

Herve BretonHerve Breton

AFDAFD

Shanghai Nov.2008Shanghai Nov.2008

Presentation of the AFD group

Urban transport sector within of AFD’s strategy of interventions in China:

. Rationale

. Approaches supported

. Financing tools and levels of intervention

A recent example in Guiyang, Guizhou

AFD’s strategy of intervention towards Sustainable Urban Transport in China

French ODA Agency: State-owned ; follows banking regulations• AfD• PROPARCO : financing of the private sector• French GEF secretariat

Present in 80+ countries

EUR 3 billion committed in 2007• Asia region = average of 20-25% of commitments• Active in China since 2003 , 320 MEUR total commitments to-date

Wide range of financing tools • Grants (projects, study funds)• Sovereign loans

(from concessional to market conditions)• Non sovereign loans

(concessional or market conditions)• Private sector loans• Partial risk guarantees, loan guarantees• Guarantees on loans in local currency • Equity financing

Untied aid

The AFD groupThe AFD group

AFD’s strategy of intervention towards Sustainable Urban Transport in China

The urban sector has always represented a sizable part of AFD’s portfolio worldwide: support to urban infrastructure projects, to urban planning and city development strategy, decentralization, etc…. along varied rationales: poverty alleviation, economic development, strengthening local authorities, local governance, the environment…

In China (as in other Asian Emerging Countries), AFD interventions in all sectors are systematically driven by a global environment rationale (including Climate change, Biodiversity)

The Urban Transport sector has an important place in AFD’ s strategy in China

Rationale of intervention

AFD’s strategy of intervention towards Sustainable Urban Transport in China

urbanization process

motorization

urban de-densification decrease of public transport

congestion

– Adequate urban development and urban transport policies can help curb emissions of GHG while providing economic benefits and contributing to reducing local air pollution.

– Structuring role of Transport infrastructure

– Opportunity in time in China as urban infrastructure being fast developed

– Importance of local governments, municipal service companies, urban service PPPs as potential partners to AFD

.

accelerated growth of energy demand in transport and associated CO2 emissions (growth of energy demand in transport is twice the world average)

AFD’s strategy of intervention towards Sustainable Urban Transport in China

Rationale of intervention, Importance of urban sector within AFD strategy in China

technological approaches (vehicles, fuel, traffic management tools, etc..) Incentives , reglementary, fiscal-based approaches development of public transport (increasing share of public transport in modal split) land-use, location efficiency, long-term transport policies linked to land use development policies

Promotion of whole range of public transport means (from facilities for pedestrians, bicycle, to bus, BRT, LRT, MRT), integrated and accompanied by other measures (fuel conversion, fiscal incentives, traffic management, road use charging)

Important parameters to energy consumption/ CO2 reduction analysis and strategies : . energy mix of country . passengers/vehicle.km (optimization of operations, frequency/load; attractivity

quality/tariffs). cost of tCO2 spared

consistency of energy consumption/ CO2 reduction strategies with project/program economic return rationale local environment, social co-benefits

Energy / CO2 impact evaluation one valid angle of overall appraisal of projects

Approaches supportedAFD’s strategy of intervention towards Sustainable Urban Transport in China

Direct funding of projects by AFD loan (AFD appraisal based on economic, financial, technical viability of projects and including energy-climate change impact)

Support at pre-feasibility or feasibility stage (through grant financing mobilized by AFD and French financial authorities)

. support to energy /climate evaluation, economic, travel studies:- validation of technical arrangements (e.g. modal choices, implementation of ITS,

traffic management systems)- validation of operational/institutional arrangements (phasing, development,

operations, technical financial viability )

. leading to or accompanying loan financing

Support to formulation of long-term policies, plans, upstream of projects, through grant financing

. mobility plan, transport planning exercises, urban development plans

. long term partnership developed over time, leading to energy-friendly policies, urban or transport plans.

. leading to loan financing of projects.

AFD’s strategy of intervention towards Sustainable Urban Transport in China

Financing tools and levels of intervention

Example :Guiyang Transport project, AFD TA support

- Population 3.5 M- Greater Guiyang development strategy “ speed up the urbanization process”- WB-supported Guiyang Transport Project (2006-2007) - Up-dating process of the Urban Master Plan 2006-2020 and Comprehensive Transport Plan-Support to environmental management and transport planning capacities needed

AFD’s strategy of intervention towards Sustainable Urban Transport in China

Objective : “assist Guiyang establish a comprehensive Transport plan, covering the Greater Guiyang area and comprising all transportation modes, which will take into account environmental and energy consumption aspects”

Contents. Transport demand model for Greater Guiyang (transport network and travel demand analysis capabilities; all modes, traffic-related air pollutant and energy consumption estimations derived from the model)

. Strategic Environmental Assessment (SEA) (overall assessment of the urban development policies and specific assessment of the Transport Plan; using a mix of qualitative assessment and quantitative data; recommendations integrated in transport plan)

. Support to Transport Planning Process (facilitating integrated approach from an institutional point of view)

AFD’s strategy of intervention towards Sustainable Urban Transport in China

Example :Guiyang Transport project, TA support

financing sustainable urban infrastructure investments in line with energy efficiency/GHG rationale

providing support for the evaluation and improvement of planning, programs, projects, from a global environment standpoint, with co-benefits (economic, social, environmental)

towards long-term partnership in support of public policies

work with other stake-holders such as municipalities, and in full cooperation and complementarily with other French stakeholders (MEEDAAT, MEF…) providing expertise or financing

AFD’s strategy of intervention towards Sustainable Urban Transport in China