June 18, 2024

Proparco programme gives climate finance a major boost

2 min read

Proparco’s far-reaching Transforming Financial Systems for Climate (TFSC) programme is delivering significant impact in a range of green initiatives implemented by leading South African investment banks. On the eve of COP28, this programme highlights the AFD Group’s commitment to responding to the challenges of climate change.

Proparco launched its TFSC programme in 2018 in partnership with the Green Climate Fund, to boost investment in low-carbon emission development in 17 developing countries including South Africa.

Steven Gardon, regional director of Proparco in Southern Africa, says: “South Africa is a priority region for TFSC, given the current high-carbon intensity of its economy and the country’s sensitivity to climate change impacts. The South African government has made fighting climate change a priority and is working toward developing renewable energy resources with an emphasis on creating jobs and reducing poverty and inequality. The TFSC programme aims to support these efforts.” 

In 2022, in a bid to scale up climate finance in South Africa, Proparco provided credit facilities worth $100 million and $80 million to FirstRand Bank and Investec, respectively. The banks distribute the funds as climate finance loans to qualifying clients. 

The TFSC programme includes a technical advisory component, co-financed by French government funds. This facility seeks to integrate climate change considerations into participating banks’ operations and strategies, remove financial and technical barriers to project development, and minimise risk by building capacity in the fields of climate finance and sustainable banking.

“Climate change is accelerating extreme weather events and driving risk to economies and societies across the globe. Proparco and the AFD Group are committed to supporting our partners to meet these challenges by providing financing and expertise wherever we can. We are investing knowledge, technical assistance and funding through the TFSC to address the financial and technical barriers faced by participating banks in financing relevant local projects,” says Gardon.

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