1

Funding sustainable transportThe point of view of a bilateral financing institution, AFD

Conference GAITIstanbul, 9 October 2015

2

Content AFD at a glance AFD mandate in Turkey: support sustainable and

inclusive growth Funding sustainable and inclusive transport in Turkey Mobilize Your City Initiative

3

A bilateral development bank working with governments, local authorities and private sector in more than 70 countries, with different mandates : Fight against poverty – priority for Sub-Saharan Africa,

36% of total funding Inclusive and sustainable economic growth Climate change mitigation and adaptation: 53 % of total

funding

In the top 12 of international donors, with 8 billion € commitments (2014) ; out of which about 1 Bn € for transport sector ; 50 % for urban transport, all modes

What is AFD – the French Agency for Development?

4

Present in Turkey since 2004 (total portfolio of 1.8 billion €)

Intervention axis in Turkey : 1. Encourage low carbon growth; 2. Contribution to the reduction of territorial inequalities; 3. Preserve regional public goods

Partners: Public sector (State, public firms / banks and municipalities) & Private sector (Banks and firms) with PROPARCO

Tools : Lending (long maturity credits with conditions below local market cost) & Supporting technical assistance

Various projects in support of sustainable development: Forest management, credit lines to local banks to promote CSR and access to credit for SMEs, energy efficiency & climate change program, modernization in agro-industry, cities’ urban development...

AFD promotes sustainable cities and the development of Turkish municipalities by financing investments in infrastructure (transportation, water, sanitation, energy, ...).

Transversal Objective : Finance and assist territorial development strategies of local urban actors 3 Strategic Objectives :

> Promote environment friendly and low carbon cities> Encourage social cohesion and accessible cities to all inhabitants> Reinforce local economic dynamics and job creation

AFD mandate in Turkey: support sustainable and inclusive growth

5

Municipal Projects Financed in Turkey in Support of Sustainable Transport

Municipality Project Financing

Metropolitan municipality of Kayseri

Urban development and tramway line 22 MEUR loan without guarantee

Metropolitan municipality of Gaziantep

Climate change action plan (CCAP) 110 KEUR grant

Metropolitan municipality of Istanbul

1. Taksim-Haciosman metro line

2. Taksim-Yenikapi metro line & decentralized cooperation with the City of Paris

60 MEUR loan without guarantee

45 MEUR loan without guarantee

Metropolitan municipality of Izmir

1.Financing of passenger ferries

2.Financing of 2 new tramway lines

3.Financing of 85 metro vehicules

45 MEUR loan without guarantee

55 MEUR loan without guarantee

12.45 MEUR loan without guarantee

Cofinancing with IFC, EBRD, ING

Izmir Signature ceremony of the CCAP Istanbul Kayseri

6

Economic growth

Efficient transport

Vehicle for trade and for territorial and regional

integration in the global economy

Poverty reduction

Improve global mobility, open access to areas and support economic growth and poverty reduction),

Global public goods protection

Safe, improving energy efficiency, reducing carbon footprint and contributing to food

security

Inclusive transportSustainable

transport

AFD Transport strategy: 3 pillars

7

negative

negative

Strong

Financial profitability

Econ

omic

pro

fitab

ility

“White Elephants”

Projects socially non desirable

Strong

Public sector

Private sector

Low

Low

Railways for Mining Industry

Some Airports / Ports

ParkingSome multimodal exchange station

(commercial activitives)

Mixed use Railways

BRT (Public infrastructures, private buses)

Some metro projects / LRT

Some multimodal exchange station

Most of MRT (metro, tram…)

Infrastructures for active modes

Urban roads

Highly Polluting Projects

Disproportionate Social Impacts

PPP Opportunity

Transport projects : A wide range of business models

8

Long-term loans

AFD Transport strategy : financial instruments

Priority Mode Financing modality

Urban transport (Road and rail based)

Sovereign and non sovereign loans

Interurban rail Sovereign and non sovereign loans

Ports and airports

Non sovereign loans(except for river transport)

Roads et rural roads

Sovereign loans with strong selective criteria

Partnerships, training and capacity building

Cooperation: institutional/governance, intermodality, urban integration, contracting, technical, Assistance to Implementation (AMO),

9

Project loan Urban and suburban rail (road) systems: Train, metro, tramway,

BRT, bus, cable, etc. Roads, bridges, bypass, ring road, etc. Multimodal interchanges

Program and sector loan Green or climate change program “Transit-oriented development”

Budgetary loan Policy for urban mobility

AFD Transport strategy : financial instruments

10

High speed trains Regional integration Low carbon mode – subject to Turkish electric mix!! Social and economic externalities

Urban transport Local benefits: reduce congestion, pollution and improve

road safety Global benefits: a key sector for GHG emissions

reduction There are solutions to “contain” GES emission of urban transport, from today (2,3 Gt

CO2) to a “High Shift Scenario” with a push on public transport –> 2,7 GtCO2 (-40 % compared to IEA baseline)

These solutions shall combine in a Sustainable Urban Mobility Plan (SUMP), at the metropolitan level,

Funding sustainable and inclusive transport in Turkey

11

Integrate urban transport and urban development planning

Better measure and communicate on climate change impact

Improve governance with appropriate technical/institutional integration

Adapt and work with local private sector, including paratransit

Promote ITS / new technologies innovations

AFD Urban Transport Strategy: 5 guiding principles

12

Who pays what? Investments, assets renewal, O&M

The direct beneficiaries :Public transport users : tariff structure, Car users : Taxation (use/property),

urban tolls, parking fees and fine. The indirect beneficiaries :

Employers’ contributions,Land owners through land value capture

The global beneficiaries : Tax payers, public authorities, donorsNew : Green Climate Fund

Financial sustainability policy : optimising the different funding sources for urban transport

13

Direct loans to municipalities Partnerships with French operators Mobilise Your City: an initiative supported by AFD for the Paris

COP 21 to promote integrated urban planning …SUMP as a “facilitator” to get GCF funds??

AFD is keen on supporting municipalities to optimise the funding framework for urban transport

AFD - Sustainable Transport and Energy DivisionCarine Megueulle– megueullec@afd.fr

5 rue Roland Barthes 75012 Paris

www.afd.fr

Thank you for your attention