CAF and AFD support sustainable cities in Latin America

CAF, Development Bank of Latin America, and the French Development Agency (AFD, for its acronym in French), subscribed a financing line for EUR 100 million, aimed at financing urban projects both for the mitigation of greenhouse gas emissions as well as for adaptation to the impacts of climate change in cities of Bolivia, Colombia, Ecuador, Peru, and the Dominican Republic.  

The agreement was subscribed by CAF's Executive president, Enrique Garcia, and the AFD's Executive Director, Anne Paugam, in the framework of the meeting of the Executive Group of the International Development Finance Club and the Climate Finance Forum, organized by the IDFC and the AFD in the city of Paris, France. 

The funds will help finance projects from national, regional, departmental, or municipal governments in the energy, urban recovery, housing, urban transportation, potable water, and residual waters sectors. 

Enrique Garcia highlighted the importance of multilateral financing to address climate change. He stated, "CAF develops a catalytic role by channeling resources from other regions to Latin America for these types of initiatives, as we are conscious of the challenges that low in carbon urban development represents, as well as the prevention and mitigation of the effects of climate change".  

At the same time, Anne Paugam insisted on the importance for two development banks such as CAF and AFD, of coordinating their financing strategies for projects that help in the fight against climate change in a region like Latin America, where cities share the same challenges in terms of mitigation and adaptation. She also highlighted that in this field, both institutions are complementary as a result of AFD's experience in financing low in carbon projects in many countries around the world, and CAF´s high level of knowledge regarding the reality of Latin American cities. 

It is important to note that in the framework of the COP20, held last December in the city of Lima, CAF and the AFD subscribed a cooperation agreement for EUR 500,000 to provide resources to the multilateral institution so as to finance the program "Cities and Climate Change". The program will provide technical assistance for the definition of urban strategies related to climate, such as carbon footprint, water footprint, and vulnerability indexes, as well as the development of action plans to face climate change in different cities of the region. 

The aim is to mobilize the cities and local governments of Latin America, through credit and the technical cooperation program, to strengthen the positive agenda of solutions in the framework of the international climate negotiations and the COP21, which will be organized in Paris in December of 2015, with specific commitments and projects.  

Challenges for the region

Latin America is the most urbanized region in the planet, with four of the 20 cities in the world with more than 10 million inhabitants, and 55 of the 414 cities with more than one million inhabitants. In these 55 cities there are 183 million people, one third of the total Latin American inhabitants. According to the UN's 2012 Habitat report, this ratio exceeds that of more developed countries. At the same time, 55 percent of the regional GDP is generated in cities, and it is expected that 80 percent of the future growth will originate in urban centers. 

In 2013, CAF launched its Cities with a Future initiative, whose aim is the sustainable development of cities. The strategy states common guidelines for its intervention in urban areas which, through a comprehensive vision and development agenda, will help use the synergies of the different initiatives that the institution promotes in the different spheres of public management, citizen safety, productive tranformation, infrastructure, inclusive urban development, environment, energy, and ICT.