Renewable energies and energy efficiency

Proparco has made the investment in climate and biodiversity one of the three pillars of its 2023-2027 strategy, with the objectives of stepping up its action in favour of climate change mitigation or adaptation, helping its clients with their climate transition and promoting innovative solutions to protect the planet. 

In 2023, climate co-benefit financing accounted for more than 40% of Proparco's activity in 2023, representing an increase of almost 70% in volume terms compared with 2021 (i.e., from €0.67 billion to €1.13 billion). Proparco also continued its financial commitments to climate change adaptation with €218 million financing with adaptation co-benefits.

Working with its European partners, Proparco has also helped create a facility dedicated to cofinancing renewable energy and energy efficiency projects led by the private sector in developing and emerging economies: Interact Climate Change Facility. This stands as one of the most successful lender collaboration accomplishments to date.

Projects that aim to produce energy from renewable sources (wind, solar, hydro, biogas, biomass...).

Projects that aim to reduce consumption of conventional energy (building, industrial processes, transport...).

Projects providing energy access in remote regions (rural electrification, off-grid financing facility...).

Projects that aim to help populations adapt to climate change constraints (technologies that help to reduce water consumption or adapt to water stress...).

Climate change is one of the major challenges of the 21^st century. International Energy Agency (IEA) has calculated investment needs, to avoid global temperature increase of more than 2°C, at USD 590 billion annually for OECD countries and USD 769 billion for non-OECD countries by 2035.

Private actors will be key players in the transition to more eco-friendly economies, by developing projects that have a "climate benefit" such as renewable energy projects, e.g. wind farms or solar power plants, or other projects that contribute to the reduction of greenhouse gas (GHGs) emission.
To enable them to play their part as fully as possible, Proparco has stepped up for years its cooperation with its European counterparts (EDFI). Thanks to the partnerships, Proparco can take on larger-scale projects and mobilize greater financial resources.

Since 2009, their investments dedicated to climate change mitigation were quadrupled: from €517 million to €2,167 million for a cumulative total of 6,174 million.

Green bonds are a component of the fight against climate change in that they increase the funding available for low-carbon investment projects.

Green bonds clearly have the wind in their sales, with issuance in 2016 alone exceeding US$100bn, but they are still a rarity in emerging markets, not to mention developing economies.

• Proparco invested in 2017 in the first green bond issuance by Banque Centrale Populaire (BCP), to promote sustainable, environment friendly projects in the country. Read more about this project
   
• in 2017, Proparco has invested US$100m in Amundi Planet – Emerging Green One. The fund’s brief is to invest in “green bonds” to be issued by financial institutions in emerging and developing countries over the next seven years. US$1.2bn have already been committed to this new fund, making it the largest green bond fund operating in those geographies. Find out more

Like Amundi, Proparco and AFD belong to Finance for Tomorrow, an initiative launched by Paris financial market participants with the aim of promoting sustainable finance in France and abroad.

The Green, Social and Sustainability (GSS) bond market saw significant growth over the past years, with cumulative issuances reaching USD 1 trillion in 2020. 

Proceeds are exclusively used to finance or re-finance, in part or in full, new and existing eligible projects with positive environmental and/or social benefits. 

Through a technical assistance facility, Proparco supports partner banks in the development of GSS bond frameworks contributing to the UN Sustainable Development Goals.