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AFD - French Development Agency

15/08/2024 | News release | Archived content

Overcoming Economic and Climate Challenges via Sustainable Finance in the Indo-Pacific

More than half the world's population lives in the Indo-Pacific region, which is also home to a large proportion of the planet's increasingly endangered biodiversity. Rapidly coming into play however, are a number of tools and projects that seek to build resilience and turn the tide. We delve into some of the risks across the region, as well as the projects, supported by AFD, which aim to improve infrastructure, diversify economies and protect biodiversity.

Challenges in the Indo-Pacific region

  • Vulnerability to environmental and climate risks
    14 of the 20 countries most vulnerable to the effects of climate change are found in the Indo-Pacific region. They are regularly exposed to rising sea levels, typhoons, floods and drought, which are putting infrastructure, ecosystems and local populations at risk.
  • Loss of biodiversity
    Overexploitation of natural resources, deforestation and pollution are endangering the region's unique ⦁ biodiversity. Illegal fishing, in particular, poses a major threat to sustainable ocean management.
  • Socio-economic pressures
    Social inequalities and rapid urbanization are exacerbating the situation. Many people in the Indo-Pacific's developing countries are close to the poverty line, with livelihoods that are highly dependent on natural resources.

The role of public development banks (PDBs)

Public development banks like AFD and the Asian Development Bank (ADB), play a crucial role in financing resilience projects. They mobilize resources for capacity-building projects to help these countries mitigate the effects of climate change and other risks. As a result of the partnership between AFD and ADB, which has recently been consolidated, major initiatives are being financed in various critical sectors.

PROJECT FOR GREENING URBAN FOOD SYSTEMS THROUGH NATURE-BASED SOLUTIONS IN INDIA

AFD and the Indian Institute for Human Settlements have joined forces to increase citywide resilience in Bangalore, India, via nature-based solutions (NBSs). This project is exploring how urban agriculture can contribute to ecosystem services (such as bee pollination) and social well-being, while improving food security. It is also looking at ways to expand sustainable urban agriculture practices by mobilizing support from various players in the sector. Find out more here.

PROJECT TO PROVIDE SAFE WATER SUPPLY AND SERVICES IN LAOS

AFD and the Centre-Val de Loire region have got behind the Dear Water II project to improve water access for rural communities in Luang Prabang, Laos. The project supports local authorities with ensuring the safety of the water supply, protecting springs and managing resources sustainably. It also involves installing water distribution systems, and developing a university program on water management. Find out more here.

NATIONAL CLIMATE CHANGE REFORM PROGRAM IN THE PHILIPPINES

AFD is supporting the Philippines with its reforms for low-carbon and resilient development. Despite its low greenhouse gas emissions (GHG), the country is especially vulnerable to natural disasters. The purpose of this program is to strengthen planning and financing for climate action, improve the resilience of populations and reduce GHG emissions from the energy and transportation sectors. It aims to promote a green economy, improve ecosystem management and reduce social and gender inequalities. Find out more here.

SUPPORTING INVESTMENT IN RENEWABLE ENERGY AND CLIMATE ACTION IN INDONESIA

AFD is working with PT SMI, the Indonesian public financing bank, to finance infrastructure projects that directly contribute to the Sustainable Development Goals (SDGs) and climate action. Despite its rapid economic growth, Indonesia lacks sufficient infrastructure. The project aims to reduce emissions by at least 280,000 tCO₂ per year and protect over two million people from climate change. PT SMI will continue its transformation into a universal development bank, which supports ambitious SDG-based projects. Find out more here.

FLAGSHIP INITIATIVES IN THE INDO-PACIFIC REGION

Pacific Islands Forum

The Pacific Islands Forum is working to foster cooperation between governments for greater stability, security and prosperity in the Pacific region. Its eighteen members are supporting projects to increase island communities' resilience to climate change and natural disasters.

Coalition for Disaster Resilient Infrastructure (CDRI)

The CDRI, launched by the Indian government, is a partnership formed between several countries and international organizations to promote resilient infrastructure. Its work focuses on governance, risk assessment, standards and regulations, as well as technological innovation.

ASEAN Catalytic Green Finance Facility (ACGF)

The ACGF is an initiative to develop technical cooperation, policy and regulatory frameworks, and co-financing for green projects. It aims to mobilize investment for sustainable projects in Southeast Asia.