Get to know AFD: SUNREF – AFD’s green finance label

Environmental integration offers significant economic development potential: green growth provides a number of opportunities to companies through new markets, especially in the fields of energy management, sustainable natural resources management and environmental protection. In developing countries, financing this green growth is a major challenge. Agence Française de Développement (AFD) contributes to this challenge in partnership with banks in the South.

SUNREF’s innovation is based on the combination of a financial approach and a technical approach. The aim is to meet the demand of partner banks and project initiators.

The financial approach involves providing local partner banks with long-term loans (green credit lines). These loans can be allocated on favorable terms on the basis of certain criteria (maturity of green financing market, type of investment, target client base).

The technical approach aims to support and scale up the market for green investment financing by assisting banks in project financing and building the capacities of companies to implement strategies for an optimized use of energy and natural resources.

Financial gains

• Access to financing for a range of traditional investments (equipment purchases, upgrading, refurbishment, increase in production capacity, etc.)
• Financing for up to 100% of the investment cost
• Reduction of operating costs
• Upgrading of industrial facilities, improvement in productivity
• Investment premiums
• Profitable investment projects and access to new markets related to green growth

Technical assistance: support for upgrading

Technical assistance is provided free of charge or at a very low-cost thanks to subsidies allocated by the French Government, European Union or other partners.

• Consultancy to guide investment decisions
• Assistance to companies for the development of eligible, innovative and profitable green projects
• Assistance tailored to the size and complexity of the project:
  • For larger or more complex projects, assistance is provided at all the project stages (loan application, technical-financial assessment of the project, monitoring of implementation, and verification)
  • For small-scale projects, a wide selection of equipment prequalified by the SUNREF team and available in a database

ENERGY EFFICIENCY

Customized approach to energy efficiency investments

Much of the equipment used in companies is old and inefficient, which is detrimental to their competitiveness. New green equipment and technologies would reduce companies’ energy consumption and improve their energy efficiency while providing productivity gains.

Types of investment

SUNREF loans in the energy efficiency sector are available for all submitted projects that meet general criteria and respect the eligibility criteria, for example:

• Replacement or upgrading of energy-intensive equipment
• On-site cogeneration of heat and electricity or trigeneration (heat, refrigeration, electricity)
• Replacement of boilers (higher quality control systems, energy saving systems, improved insulation, etc.)
• Installation of a heat recovery unit
• Thermal insulation of premises
• Upgrading of existing ventilation / air conditioning systems
• Implementation of energy management systems or building management systems
• Replacement of old coolers and compressors

Project eligibility

Projects for green energy efficiency investments are required to meet the following conditions:

• A reduction of energy consumption of at least 20% compared to standard technologies
• An internal rate of return (IRR) of at least 10% of savings on energy costs from project upgrading or
• An IRR of at least 20% of energy efficiency gains for investments involving an increase in the production capacity of at least 50%

RENEWABLE ENERGY

Customized approach to renewable energy investments

Investing in renewable energies (solar, wind, geothermal, hydro, biomass, etc.) offers companies several benefits:

• Savings on electricity use
• Reduction of dependence on fossil fuels and the volatility of their tariffs on international markets
• Independence in terms of power cuts
• Development of local resources

Types of investment

SUNREF loans in the renewable energy sector are available for all projects submitted that meet general criteria and respect the eligibility criteria, for example:

• Thermal photovoltaic solar systems
• Photovoltaic equipment
• Wind facilities
• Conversion of large quantities of waste into biomass
• Biomass combustion systems for heat and/or power generation
• Installation of solar water heaters
• Geothermal energy with/without a heat pump
• Small-scale hydropower plants

Project eligibility

Investment projects using renewable energy (solar, biomass, wind, etc.) are eligible. SUNREF gives priority to supporting projects which, despite their technical and financial viability, experience difficulties due to their size, their innovative nature, etc.

ENVIRONMENT

Customized approach to environmental protection investments

The implementation of environmentally friendly technologies and practices improves the image of a company, its competitive position, as well as compliance with strict environmental regulations, which may be a prerequisite for access to international markets. In addition, improving health and safety conditions and the use of less harmful solutions preserve the physical capital and health of the company’s staff.

Types of investment

SUNREF loans in the environmental protection sector are available for all projects submitted that meet general criteria and respect the eligibility criteria:

• Reduction of water consumption
• Introduction of technologies/techniques that reduce waste and production costs
• Waste sorting, recycling or reuse as a fuel
• Use of a more environmentally friendly fuel
• Introduction of green modern technologies

Project eligibility

All green investment projects for environmental protection that improve the local or global environment, or help to reduce its degradation, are eligible, for example:

• Reduction in the consumption of natural resources
• Reduction in the generation of all types of pollution: wastewater, chemical pollution, agriculture
• Decontamination, waste management solutions
• The objective is to achieve a 50% reduction for a specific use or a 20% reduction for an overall use.

SUNREF implemented successfully over 42 projects since 2006, allocating over 2,5 bn of loans, including EUR 1,2 bn already disbursed.