France, having expertise and experience in tackling climate change issues, is keen on meeting Bangladesh’s financing needs by providing AFD concessional loans for green investments and through supporting the government in addressing climate-related issues, says Agence Française de Dévelopment (AFD) Executive Director Philippe Orliange.
With the upgrade from least developed country (LDC) status and the “rapid” economic development of Bangladesh, the government is looking for massive capital investments while facing unprecedented environmental and climate change issues, he told UNB in an exclusive interview.
During his two-day visit recently, the highest-level AFD mission to date, Orliange acknowledged the growing collaboration between AFD and Bangladesh over the past decade.
The AFD, a financial institution of the French government, is currently operating in 110 countries with an annual commitment of around 12 billion euros – half of it in Africa and the rest in Asia, South America and the Middle East.
The French Embassy in Dhaka and AFD’s Dhaka office organised the Bangladesh visit of the executive director considering the population size of the country which is significant for a development partner.
Orliange, who had a meeting with the finance and ERD secretaries of the government of Bangladesh (GoB) and the Bangladesh Bank governor on the same day, said the portfolio of Bangladesh is around 1.4 billion euros.
He also attended a roundtable, titled “The role of France in tackling climate change, both globally as well as in Bangladesh.”
The roundtable was facilitated by International Centre for Climate Change and Development (ICCCAD).
“First of all, let me say that I am quite happy to finally come to Bangladesh, it is a very interesting country from a development point of view. It is really important for AFD to understand a country and its dynamics in order to adapt our services,” said the AFD executive director.
Responding to a question, he said his visit has had three main purposes: acknowledging and celebrating achievements of the AFD-GoB collaboration over the past decade, reassuring the full support of AFD in the future, and exploring new areas of cooperation with the government of Bangladesh around climate change and green finance.
AFD’s financing in Bangladesh almost tripled over the last three years (a total of 1.4 billion euro has been committed since 2012).
“We signed with the government loans and grants for 543M€ in the last two years (2021 and 2022). It was agreed with the government that AFD would commit to around 300M€ annually in the coming years,” Orliange said.
Despite the implementation duration of these kinds of development projects, he said, they are starting to witness concrete impacts on the people (access to basic services like electricity, water and sanitation, urban mobility, financial inclusion, and social protection).
“We also like to believe the projects funded by AFD have a significant impact on the global adaptation to climate change,” he said.
The executive director said project implementation is a heavy process that could be accelerated sometimes.
“AFD, the government of Bangladesh and our implementing partners should work together to improve that specific point,” he said.
Responding to a question on his participation at the Raisina Dialogue held in New Delhi, Orliange said Raisina is the place where brainstorming results in important decisions, promoting disruptive and important questions on our modern stakes.
The development agenda, especially finance supporting SDGs, is structural in every region, especially in the Indo-Pacific, he said.
Public development banks and development financial institutions play a key role in namely delivering sustainable and high-quality projects, taking into account the needs of partner countries and ensuring lasting benefits for local communities, in the specific context of the Indo-Pacific.
There is indeed a pressing need to recognise that among the challenges that the Indo-Pacific is facing, sustainability is no less urgent and strategic than the security agenda, Orliange said.
Responding to a question, he said of course, AFD has started due diligence on a Blue Economy project to improve the research capacity of the Bangladesh Oceanographic Research Institute (BORI) by acquiring an advanced oceanographic research vessel.
The objective is to help BORI with physical and chemical oceanographic campaigns, underwater mapping, geological sampling, marine biology or fisheries resource assessment, he said.
In terms of green energy, AFD, together with the European Union, is currently supporting the Dhaka Power Distribution Company (DPDC) to strengthen its distribution grid by expanding and renovating it, and commissioning smart-grid technology on a pilot basis.
“AFD also recently showed interest in financing solar photovoltaic power plants and hopes to make it concrete soon,” Orliange said.
AFD is also taking part in the European Union’s initiative called “Green Energy Transition in Bangladesh,” to engage in policy dialogue with the Ministry of Power, Energy and Mineral Resources and especially with Bangladesh’s Sustainable and Renewable Energy Development Authority (SREDA).
AFD’s role in Bangladesh to help achieve SDGs
AFD’s role could be summarised very succinctly: helping countries achieve Sustainable Development Goals, as they were defined in the Paris Climate Agreement in 2015, said the executive director.
In Bangladesh, he said, AFD is working with the GoB on the following SDGs:
SDG 1 (no poverty)
Through AFD’s cash transfer project, as well as all projects improving living conditions (access to water, energy, transportation).
SDG 3 (good health and well-being)
Through AFD’s Health and Social Protection projects signed in response to the Covid-19 pandemic.
SDG 5 (gender equality)
AFD tries to include a gender component in all of the projects: favouring women’s capacity-building, women empowerment, and women entrepreneurship.
SDG 6 (clean water and sanitation)
Through AFD’s 2 projects with the Dhaka Water Supply and Sewerage Authority (DWASA) and the upcoming one with the Chattogram WASA.
SDG 7 (affordable and clean energy)
AFD is working with DPDC on strengthening the power distribution grid of Dhaka. Discussions are progressing with NESCO to strengthen the grid in the north of the country and with BPDB for renewable energy power plants.
SDG 8 (decent work and economic growth)
Through AFD’s project with the Bangladesh Bank, the focus is on improving the working conditions and the safety of workers in the RMG sector.
SDG 10 (reduced inequality)
SDG 11 (sustainable cities and communities)
A number of projects with financing institutions are in the appraisal phase. These are aimed to finance projects with municipalities, to support the housing sector and urban development overall.
SDG 13 (climate action)
As mentioned before, all of AFD’s financing needs to be “climate-compatible” and the objective of the AFD executive director’s visit is to put climate even more at the core of its project origination process.
SDG 14 (life below water)
AFD is currently appraising a project with the Bangladesh Oceanographic Research Institute that promises to be very interesting.
Responding to a question, Orliange said the AFD Group includes a subsidiary named Proparco, which deals exclusively with the private sector.
Proparco is active in Bangladesh with a growing portfolio in the textile and energy sector ($135 million committed over seven projects since 2013). Proparco’s activities are monitored from the regional office based in Delhi, with regular visits and missions undertaken to see the evolution on the ground.
AFD finances the private sector and the industries through public financial institutions.
At the moment, AFD finances three credit lines with Bangladesh Bank, IDCOL and BIFFL which aim to finance private firms’ investments which qualify.
These investments must prove to save energy (energy efficiency) or produce green energy from renewables, or improve the safety and hygiene of the workers.
Other credit lines are under preparation. The promotion of the private sector is crucial to the economic development of the country and AFD is dedicated to playing a role in this, said the executive director.