AFD Annual Report 2014

ANNUAL REPORT

Agence Française de Développement titre de l a s ecti o n

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Increased financing aids development

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ANNUAL REPORT

Contents 4 Editorial by Laurence Tubiana

Our Actions 20

5 “Collectively, we need to change our development models” Interview with Anne Paugam

20 Sub-Saharan Africa

7 Our Mission

Because the future is shaped here and abroad

Results and Highlights 8 12 Our Strategy Committing to new development models 12 T ransforming economic development into universal social progress 13 E ncouraging environment-centered growth models

25 Middle East and North Africa 29 Asia and the Pacific 32 Latin America and the Caribbean 36 French Overseas Provinces 39 Fragile and Crisis-affected States

Our Savoir-Faire 43

Conceiving, financing and assisting development

Our Method 46

Partnership and innovation

14 E qualizing development opportunities across regions

AFD Team 51

16 T ailoring solutions to fit the specifics of each location

59 Financial Information

19 O ur funding sources: financial markets and public support

60 Financial statements 62 Financing commitments by country 64 Projects financed

Agence Française de Développement

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EDITORIAL

Laurence Tubiana Chairwoman of the Board of Governors Special Representative to the COP21 Conference Ambassador for Climate Change Negotiations

The year 2015 will make history! It will see a new French law on developmentaid financing in July, final touches to the UN Sustainable Development Goals in September, and an international climate summit in Paris in December. As chair of AFD’s board of governors, I consider it a privilege to give renewed impetus to sustainable development.

AFD, the French development agency, works at the forefront of climatefriendly development: over the past several years, the Agency has evolved criteria for sustainable development and ensured that, year by year, economic development projects include increased environmental protections. We may draw many lessons from these field experiments: instead of the predicted additional costs, we can now show savings and synergies. Agricultural practices using less water and fertilizer actually protect soil fertility, preserving vital natural capital and sequestering atmospheric carbon. Investments in energy efficiency reduce recurrent costs and improve well-being. Everywhere we look, we see greater interplay between health, education, and the environment.

The year 2015 will also be a turning point for development financing, outstripping the question of public aid funding.

We must now think about risk-sharing, leverage, and credit enhancement, if we hope to draw on savings and international, non-public funds for places needing investment. The Addis Ababa Conference on Financing for Development will complete the steps that began with the Monterrey Consensus in 2002.

AFD has operated as an outpost on the frontier of this transformation – anticipating, theorizing, and experimenting.

The Agency has led many projects and financing experiments, such as providing budget aid for national climate plans, private-sector support from Proparco, green credit lines, and funding for the multi-donor Bêkou Trust Fund for the Central African Republic. These and other efforts will allow AFD to make an excellent contribution to the Addis Ababa Summit and what comes out of it.

“It is a privilege to support the renewed impetus to sustainable development”

The year 2015 will also see a final push towards a climate agreement binding all countries to a common goal. The accord would curb global warming and prevent climate catastrophes through a new economic model — one less prone to greenhouse gas emissions and more resilient to climate changes already underway.

As France’s ambassador for climate negotiations and its special representative in preparing the 21st Conference of the Parties to the 1992 United Nations Framework Convention on Climate Change, I believe that AFD can offer climate-smart solutions in every stage of negotiations between governments, financial institutions, local governments and businesses. The Agency’s experience allows it to conceive a new financing model, one that would encourage national development banks and multilateral donors to take the lead. Local government engagement through non-sovereign lending encourages them to go further, and convinces the private sector that future markets have arrived. In Paris in 2015 as in 2014 and before, AFD will act as a solid pillar for the French government, through the competence, commitment and rigor of all the men and women who work for the Agency.

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INTERVIEW

Anne Paugam Chief Executive Officer

“Collectively, we need to change our development models” United Nations member countries have labored in recent months to define Sustainable Development Goals to replace the Millennium Development Goals – the lodestar of the international agenda for the past 15 years. What major changes will these new goals bring?

The world of development has made tremendous progress in recent decades. Millions have escaped poverty and gained better access to healthcare, education, drinking water, and other basic services.

The Millennium Development Goals, which focused on social services, have come to at least partial fulfillment. However, during this time, inequality has increased throughout the world. Today, ongoing social and economic exclusion creates tensions that in turn feed conflicts. Economic growth, while genuine in much of the developing world, has not created enough jobs. The planet’s resource loss has accelerated and climate disruptions have worsened.

Collectively, we need to change our development models. We need to invent and encourage paths to economic growth that alleviate poverty and inequality while preserving the environment. These universal challenges now affect both the developing and the developed worlds simultaneously, for the first time in history.

These social and economic imbalances cause great concern among the French, as do climate disruptions. According to a recent poll, 78% of French citizens believe that events in developing countries may have an impact on their own lives.

How does AFD’s mission tie into these concerns?

Globalization has definitely created strong interdependencies between various regions of the world. This situation carries risks – I am thinking of health crises, such as Ebola, or conflicts and tensions in the Middle East or the Sahel that provoke regional and international repercussions – but it also brings opportunities. For instance, if China decides to fight pollution and climate change, that would help the whole planet.

These interdependencies find an echo in AFD’s actions. We work for the French and in their name, representing their values – solidarity, notably – with the conviction that developing the Global South is in everyone’s interest.

We strengthen human capital over the long term by supporting public policies dedicated to health and education. By financing mass transit systems and green energy infrastructure while supporting the private sector and job creation, we help create conditions for sustainable economic development.

By favoring low-carbon and environmentallyfriendly drivers of growth, we contribute to the “ecological transition” crucial for a sustainable green economy and help preserve the planet.

How do you imagine working with developing countries to meet these new global challenges?

We consider that the traditional foreign aid model — where assistance flows unilaterally from the Global North to the Global South — has become outdated. Flows of people, knowledge, and money go in more than one direction; for example, Chinese, Indian, and African companies invest in France, and vice versa! AFD no longer has a prescriptive, doctor-patient type of relationship with our aid beneficiaries; we form partnerships with aidreceiving countries, local governments, companies, and nongovernmental organizations. These partners value exchanges of knowledge and experience, especially with French enterprises, administrations and institutions. Our partners especially appreciate the savoir-faire of French companies, engineering groups, and local governments, as they apply to sustainable cities, agriculture, energy and transportation. AFD plays a role in connecting this know-how to our partners’ needs.

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What impacts have you seen from AFD actions?

I have three concrete examples: in the past three years, AFD-funded projects have ensured access to safe housing for 2.3 million people, installed systems that generate 1,700 megawatts of renewable energy, and supported 246,000 small businesses. We rigorously measure these “ex-post” impacts. These are not our only achievements: our work also helps to prevent tensions and conflicts – I am thinking of our work in the Sahel, where we help to provide local public services, build facilities, and support herdsmen and farmers. We also assist governments in designing long-term public policies.

“The traditional foreign-aid model — where assistance flows unilaterally from the Global North to the Global South — has become outdated” I would like to add a word about the amount of financing we provide, as it directly drives our effectiveness. For the first time in 2014, we exceeded €8 billion in commitments to development projects and programmes. This “critical mass” of funding has allowed us to achieve the local-level impacts that I have just described.

It has also allowed us to develop a research and partnership strategy with even further-reaching influence: AFD’s voice now carries weight in international debates and discussions about development.

The fight against climate disruption has become a major theme in AFD’s mission. Your objective – surpassed in 2014 – was to dedicate at least 50% of funding to projects that would have positive climate effects.

AFD has worked on climate-related issues for more than ten years. First, because climate disruption threatens all progress made through development.

Second, because development leads to increased energy and natural resource consumption, and thus has an impact on climate. The challenge for an agency like ours is to finance projects that serve both development and the climate. For example, financing a solar power plant in Burkina Faso increases electricity access and greens the country’s energy mix. Just as a subway or tramway line improves daily life for city dwellers while decreasing urban emissions.

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AFD has committed more than €18 billion to climate-friendly projects since 2005; we now rank as one of the most active donors in the fight against climate change. In this connection, AFD has joined with the French government to help prepare the United Nations Climate Change Conference, slated for Paris in December 2015.

Whether one speaks of Sustainable Development Goals or the climate, the actual financing of sustainable development poses a major challenge.

How does AFD contribute to strategic thought on the subject?

We certainly know that the infrastructure investments needed for a more ecologically and socially sustainable world far outpace the available public funds — or even foreign aid, in the strict sense of the term. We must mobilize private-sector investors; as a donor, AFD can play an active role in that effort.

We hold a dual conviction. On the one hand, we must deploy public development-aid tools in ways that will maximize their impacts. For example, we might blend grants with loans to create pools of funding large enough to finance major infrastructure projects. On the other hand, international development funders must do more to tap local sources of funding – banks, companies, and those local governments best placed to deploy sustainable development strategies effectively.

How do you respond to those who question your actions and, more generally, the validity of French foreign aid policy?

In an increasingly interdependent world, we must work toward more equality within globalization. It is in our collective interest to do so. That goal provides meaning for our mission and actions. Important milestones await us in 2015: the new Sustainable Development Goals and the Paris Climate Summit.

We must show that we can rise to these historic occasions; they will determine the future agenda of international development – and more than that, the future of the planet.

Because the future is shaped here and abroad The Agence Française de Développement (AFD), a bilateral development bank, has implemented France’s development-aid policies for more than 70 years.

HIGHLIGHT n the past few years, increased globalization has also brought reductions in extreme poverty.

The adoption of the United Nations Millennium Development Goals has brought many successes: for example, more children attend school and fewer die at birth. However, inequalities have also greatly increased, amidst widespread under- and unemployment and dwindling natural resources.

In an increasingly interdependent world, AFD addresses these challenges by championing new growth and development models — more resilient, less emissive, and even better able to fulfill the world’s economic and social aspirations. The Agency’s actions have three primary goals:

›› Transforming economic development into universal social progress. ›› Encouraging environment-centered growth models. ›› Equalizing development opportunities across regions.

In more than 90 countries and in the French Overseas Provinces, AFD finances and assists development stakeholders in both the public and private sectors. It deploys its own expertise and the commitment of its 1,787 employees, who work in Paris and in 72 field offices around the world. The Agency also helps design public policies that define pathways to prosperity and human development. Partnerships and innovations hold a central place in its actions:

An action central to France’s first law on development aid On 7 July 2014, the French legislature passed the country’s inaugural law on development aid. The law has been designed to guide and plan developmentaid and international-solidarity policy, and to adapt public policy to a profoundly changed and changing world. The law centers on one goal – sustainable development – drawing on the logic of the upcoming merger of the Millennium Development Goals with future Sustainable Development Goals. The principle of “differentiated partnerships” remains central to French development policy: the means and tools of deployed differ according to the development level of each aid beneficiary and partner country. For example, France allocates grant monies, a scarce resource, chiefly to the poorest countries. The new law’s innovations include rules that allow AFD to create multi-donor trust funds able to receive and deploy monies from other donors. The rules also allow AFD to delegate financing to trust funds managed by other aid agencies or development banks.

›› Providing loans and other financing. ›› Sharing know-how and expertise. ›› Commissioning research and participating in international discussions.

OUR m i s s i o n

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Meeting common challenges

73.4

1%

OF THE WORLD'S POPULATION

unemployed worldwide, including 1 in 4 in the Middle East and the Maghreb

60%

owns half its wealth

MILLION YOUTH

OF THE PLANET'S ECOSYSTEMS

were damaged in the past 50 years

5

Two-thirds of

796

MILLION NEW RESIDENTS

arrive each month in African, Asian and Latin American cities

MILLION ILLITERATE PEOPLE

are women

Our actions positively affect developing communities and the climate The

€2.8

€3

150 PARTNERSHIPS

€58

billion committed

with international donors, United Nations agencies, local governments, NGOs, companies, foundations, and think tanks

million in grants to French NGOs (+ 19%)

7.8

of 2014 foreign-aid funding helped fight climate disruption

8.1

4.5

€315 mm (4%) €633 mm (8%) Water and Sanitation

Biodiversity and Natural Resources

€181 mm (2%) Agriculture and Food Security

€767 mm (9%) Health and Education

€527 mm (7%)

Other

(budget support, etc.)

€1,742 mm (22%)

Sectors financed (€ million)

€2,244 mm (27%) Infrastructure and Urban Development

Business, Industry and Trade (microcredit, SME support, banking sector)

€1,669 mm (21%) Energy

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53%

A new record year for Africa with

more than

€

billion to foreign countries and the French Overseas Provinces for climate-smart development projects

billion* milestone surpassed

2008

2013

2014

Financing committed by the AFD Group (AFD and Proparco) in billions of euros *of which €245 million from other donors.

19%

of total financing €1.55 billion

French Overseas Provinces

15.5%

1%

of total financing €1.2 billion

of financing covers several regions

36.5%

Asia and the Pacific

of total financing €2.95 billion

Sub-Saharan Africa

13%

of total financing €1 billion

15%

Middle East and North Africa

of total financing €1.2 billion

Latin America and the Caribbean

1

The impact of our projects in 2012-2014

102

MILLION PASSENGERS

per year ride on new or modernized public transit

150,000

PEOPLE

access electricity and grid connections

2.3

MILLION PEOPLE

live in better and safer homes

2

attended primary or elementary school

246,000

SMALL BUSINESSES

receive financial support or credit lines

771,000 FAMILY FARMS

receive direct aid each year, on average MILLION HECTARES

protected by biodiversity-conservation and sustainable resource-management programs

YOUTH

enrolled in vocational training programs

1

MILLION PEOPLE

access reliable drinking water

32

MILLION CHILDREN

332,000

2.75

New impacts from projects currently underway.

11.7

MILLION METRIC TONS OF CO2E PER YEAR

abated through climate-change mitigation projects financed between 2012 and 2014

Results and hi g hlig hts

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Peru: AFD finances the Lima Metro.

In 2014, AFD reaffirmed its commitment to shaping a more equitable and sustainable world on multiple fronts — opening new field offices, implementing innovations, strengthening partnerships, responding to crises, and financing climate-smart projects.

Highlights New field offices AFD has worked in Peru since 2013. In July 2014, the Agency made its first loan to Mivivienda, a public-sector socialhousing mortgage bank; the funds will promote affordable and sustainable homes. In December, AFD committed to a €120 million loan to finance Lima’s Metro. During 2014, the Agency also opened offices in Ecuador and Bolivia and began exploring energy and water projects in those countries.

A cofinancing agreement with the World Bank On the 29th of May, AFD signed a cofinancing agreement with the World Bank that strengthened ties between the two institutions. In October, they created a roadmap that designated areas of collaboration: sub-Saharan Africa, fragile states, sustainable cities, knowledge production, and climate.

Innovation For the first time, AFD agreed to finance offshore projects implemented by French regional administrations. The local governments of Brittany, North Pas de Calais and the Ile de France presented economic development projects for localities in Burkina Faso, Mali and Madagascar, and will act as AFD’s partners in these efforts.

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Climate-friendly development A record year

Mexico: Modernizing an electric power station to stimulate lower-carbon growth.

Since climate disruption concerns the entire world, AFD implements climate-smart economic development solutions. In 2014, 53% of AFD financing for developing countries, and 30% of Proparco funding (its private-sector lending arm) went to development projects that will also help fight climate disruption.

First “climate bond”

Crisis response Faster and better-coordinated interventions In the Central African Republic, Guinea, Mali, and other countries affected by crisis or conflict, AFD has tailored its interventions and tools to fit specific circumstances. This allows the Agency to act more quickly, as well as a collaborating more effectively with other organizations dedicated to disaster preparedness, emergency response, and humanitarian relief.

When the Ebola epidemic struck Guinea, AFD granted €5 million to set up a regional treatment center managed by the French Red Cross chapter.

Another €4 million grant funded an expertise center within the Pasteur Institute, aimed at expanding the ability of stricken countries to diagnose and curb disease outbreaks.

In addition, AFD co-founded the Bêkou Trust Fund, a multi-donor relief resource for the Central African Republic, launched in July with an initial €64 million endowment. European donors can pool financing within the trust fund; it promotes the Central African Republic crisis recovery through basic service rebuilding, economic growth, and stabilizing efforts in the country and the region.

In September, AFD issued a €1 billion “climate bond,” the first of its kind from a French public agency. The bond has a ten-year maturity; proceeds will finance projects that contribute to development and fight climate change as well.

This bond reflects a new trend in climate-friendly financial instruments, designed to support the transition toward a low-carbon economy.

Its creation showcases AFD’s rigorous and innovative methodology, one that systematically assesses the carbon footprint of any funded project. The Agency has also demonstrated that climate-friendly assets could attract international investors.

International summit participation By participating in international negotiations and pushing a “positive agenda” for the 21st Conference of the Parties, AFD promotes less-emissive development paths that better meet economic and social challenges. At the end of September, AFD delegates attended the International Climate Summit in New York, hosted

by UN Secretary-General Ban Ki-moon. An AFD delegation also attended the COP20 in Lima in December.

Guinea: An AFD-funded Ebola treatment center in Macenta.

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Committing to new development models

FD works to rebalance the effects of globalization, seeking more equity and sustainability. The Agency finances projects with three overarching goals: making economic development synonymous with universal social progress, encouraging environment-centered growth models, and equalizing development opportunities across regions.

Consequently, AFD advocates for a development model that rests on these three mutually supporting social, economic and environmental pillars. This requires working in partnership with all development actors and considering specific and diverse needs — those of poor countries and emerging powers, of public- and private-sector entities — and addressing the different expectations of each. To meet these needs, AFD has developed a range of financial tools and strategies, adaptable

to each partner’s geographic region and development level.

Transforming economic development into universal social progress The increasingly obvious limits of current economic growth models have prompted a period of questioning. While global population grows 1.2% annually, global wealth accrues disproportionately to the few — fully half of it owned by just one percent.

This inequality particularly affects women and youth. Women account for more than two-thirds of the world’s 796 million illiterates, while young people face great difficulty in finding jobs. In the Middle East and North Africa, the youth unemployment rate is very high, reaching 41% in Tunisia, or even higher for young women. A similar situation plagues sub-Saharan Africa, and may worsen

22%

of financing commitments go the private sector and productive investments as 100 million young Africans enter the job market from 2015 to 2035.

The resulting threat of instability and rise of powerful social aspirations – in the Global South and the Global North – call for a reassessment of the social issues looming among the century’s major challenges.

In this context, AFD seeks to foster an economic growth synonymous with greater social well-being and fewer inequities. Through Proparco, a subsidiary dedicated to the private sector, AFD supports private enterprise — a crucial link in the development chain, due to its impact on employment and economic dynamism.

AFD also supports the financial-services sector, particularly microfinance institutions and small-business lenders, to foster economic growth and financial inclusion. The Agency proposes development assistance for small and medium-sized businesses through its sales and marketing capacity-building programme.

AFD also offers to share credit risk through private-sector loan guarantees, thus motivating banks to lend for infrastructure investment, job creation, and green projects.

Haiti: Support for healthcare clinics.

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South Africa: In Johannesburg, refurbishing water supply-lines and installing prepaid meters for water use.

To ensure that a rising economy improves the quality of life for all, AFD promotes the adoption of social and environmental responsibility (SER) standards and helps its aid recipients in adopting them — for example, during construction of the Lom Pangar Dam in Cambodia. It also helped Morocco’s National Ports Authority design its SER action plan.

Development that benefits everyone also means financing access to basic services, such as food security, healthcare, education, energy, housing, water, and sanitation. In these sectors, AFD financing chiefly targets public services, supporting public education policies and, as needed, creating social protection systems. It also aims to strengthen human capital by promoting women and helping youth find employment.

Encouraging environmentcentered growth models Current economic growth models have led to major climatic imbalances, natural disasters, dwindling resources, and diminished biodiversity. Sixty percent of the planet’s ecosystems have degraded over the past 50 years; 35% of species studied worldwide by the International Union for Conservation of Nature (IUCN) — 17,291 out of 47,677 — are endangered. Meanwhile, 75% of French citizens already feel the consequences of global warming in France, according to a 2014 survey by IFOP. We

In developing and emerging countries, AFD supports public and private-sector entities as they transition to a green economy, through projects for national climate plans and bank intermediation. The latter features green credit lines extended to banks, which allow them to lend in turn to innovative renewable-energy, energy-efficiency, depollution, or waste-management companies. And in the territories most vulnerable to the impacts of climate disruption, such as the Small Island Developing States, AFD finances adaptation and mitigation works.

can no longer build lasting economic development without taking the environment into account.

With these issues in mind, AFD seeks to combine economic development with environmental protection. It works to protect the environment by restoring natural landscapes, expanding nature and marine preserves, protecting animal biodiversity, and financing low-carbon projects. AFD does all this while seeking ways to create economic wealth for the local populace through agroecology, ecotourism, industry, and ecosystem services, and by harvesting woodlands, fisheries, and medicinal or aromatic plants.

+ +

MORE POSITIVE IMPACTS ON DEVELOPMENT AND THE CLIMATE

€

+

2.8

billion for projects having demonstrably positive climate impacts in foreign countries and in France’s overseas provinces.

A continuous increase in funding:

€

18

billion since 2005.

€

€

+

+ €

+

+

+

53% +

of 2014 foreign aid funds helped to fight climate disruption.

+

+

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Mayotte: Protecting biodiversity.

AFD is one of the leading donors to biodiversity conservation efforts.

In 2014, the Agency committed €149 million to such efforts in pursuit of three goals: biodiversity protection, integration, and value creation.

AFD sets up financing mechanisms, builds institutional capacity, and partners with French and international organizations dedicated to biodiversity conservation. The Agency works very closely with the French Global Environment Facility (FGEF) as fund manager. The FGEF’s mission is to finance innovative environmental projects that preserve biodiversity and fight climate change and land degradation, among other efforts.

AFD aims to double the amount of funding it commits to biodiversity conservation, and so makes every effort to include the issue in its financing policies for every project sector. In agriculture, for example, such efforts encourage biodiversity in food-producing ecosystems and preserve genetic diversity in crops.

In hydraulic and sewerage projects, AFD seeks to protect watersheds and aquifers from degradation and depletion. And in urban development, the Agency strives to foster a diverse range of city-dwelling plants and wildlife.

By the same token, AFD integrates the fight against climate disruption into all of its project sectors: water, sanitation, energy, transportation, infrastructure and urban development, and the rest.

In 2014, 53% of AFD’s financing for developing countries, and 30% of Proparco’s private-sector contributions, demonstrated positive and provable effects in fighting climate disruption; the Agency pursues one of the most ambitious climate-preservation strategies of all international development banks.

In all, climate-friendly financing accounted for more than €2.8 billion of AFD Group commitments to foreign countries and to the French Overseas Provinces. Climate-friendly financing has risen continuously over recent years, with climate-smart development projects receiving €18 billion since 2005.

A key year for biodiversity

19 March Framework agreement between AFD and the International Union for Conservation of Nature (IUCN)

—

29-30 May Conference on large-scale ecosystem restoration in Washington, D.C., co-hosted with the Veolia Environment Institute

—

6-17 October 12th Conference of the Parties to the Convention on Biological Diversity, in South Korea

—

12-19 November 14

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Participation in the IUCN World Parks Congress, in Sydney

Equalizing development opportunities across regions While the advance of technology and the opening of borders have created unprecedented opportunities for interregional trade, they have also created stress lines and fractures.

Growing distortions between urban and rural areas, or city centers and their peripheries, now occur all over the globe. We see these disparities in the developing and developed worlds, between France and its overseas provinces, or more locally, in richly developed versus highly impoverished areas, in city centers and slums.

Urban centers concentrate wealth and attract both residents and investors, while rural and isolated areas, lacking infrastructure and transportation, struggle to develop on their own. The development gap between city and country causes constant migration from rural to urban areas. In the most extreme cases, such gaps foment armed clashes within countries, the most common form of contemporary conflict. With this in mind, we predict that competition for resources will intensify and provoke new types of conflict, similar to the 2007-2008 food riots that erupted in some forty-odd countries.

Even within cities, spatial imbalances have worsened; urban growth also brings the blossoming of slums and the problem of integration. Cities in Africa, Asia and Latin America receive five million new residents every month. By 2025, 13 of the top

The challenge lies in balancing development between urban and rural areas

15 megacities (counting more than 20 million inhabitants) will have concentrated in developing countries. Ensuring sustainable livability in these cities poses enormous challenges: incorporating slum neighborhoods into better ones, curbing urban sprawl, bolstering resilience to climate-change effects, expanding employment opportunities, and so forth.

PARTNERSHIP AFD co-hosts the 7th World Urban Forum in Medellín Two key actions demonstrated AFD’s support for “social urbanism” in Medellín, Columbia: financing a tramway to connect disadvantaged districts to the center, and coorganizing the 7th World Urban Forum in April 2014. Both demonstrate how AFD addresses rapid urbanization around the world, and contributes to strategies and guidelines for sustainable urban development on a global scale.

tion in a globalized world. They also reduce spatial disparities in rural areas and link the disadvantaged to the rest of the world.

This financing helps integrate AFD support for regional planning in megacities, secondary cities, and rural areas. AFD supports land-use management and secure tenancy, indispensable for equalizing development between different areas and regions. The Agency supports local government steps toward autonomy by financing their infrastructure investments and strengthening land-management skills and public-works administration.

In both the city and the country, another challenge lies in implementing public policies that bolster local economic development and investment potential. In rural areas, this means promoting family farming, an agricultural model that produces nearly 80% of the world’s crops. The family-farm model also outperforms all others in meeting the challenges of food security, employment, climate-change adaptation, and environmental conservation. AFD motivates farmers and herdsmen to form cooperatives to optimize earnings from their operations. The Agency also supports creation of market systems, operational procedures, and value chains for food producers, processors, and manufacturers.

P U B L I C AT I O N Nature

aND DeVeLOPMeNt

convergent objectives ACTION PLAN

2013 2016

The new AFD Biodiversity Action Plan

Agence Française de Développement

We must therefore rethink the disequilibrium that exists between and within regions, and promote a more comprehensive and integrated approach. AFD translates this need for balanced development between regions into financing for mass transit and for rural and suburban electrification. These infrastructure investments are vital for economic growth, regional integration, and participa-

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Tailoring solutions to fit the specifics of each location Despite the global character of shared challenges, every solution must fit the specifically local needs and development level of the partners involved. For this reason, AFD tailors its financial tools and sectors of intervention to each country or region.

In sub-Saharan Africa, where the development stakes are highest, AFD invests in all sectors and mobilizes all its financial instruments, including grants. In North Africa, the Agency prefers to deploy loans, prioritizing industrial and business upgrades, job creation, and land-use planning.

In fragile and conflict- or crisis-affected states and those recovering from crisis, AFD deploys its most flexible instruments, primarily grants.

In the middle-income, fast-growing countries of Asia, Latin America, and the Caribbean, AFD pursues green and inclusive growth as the central theme of its work. The Agency does not use public funds provided by the French government to finance the largest emerging countries, except as part of technical assistance programs.

2.5% of AFD’s government-allocated aid funding. €24.5 mm

15%

of financing activity

€1.2 Billion

Latin America and the Caribbean

Middle East and North Africa Objectives: promoting regional integration with Europe, job creation, and land-use planning and development.

Financing: primarily loans, and grants only for actions that benefit populations enduring hardship, such as Syrian refugees in Jordan or the Palestinians.

13%

of financing activity

€1 Billion

8% of AFD’s government-allocated aid funding11. €87 mm

2% of AFD’s government-allocated aid funding. €24 mm

19% of financing activity

Objectives: promoting green and inclusive growth; sharing French savoir-faire.

€1.55 Billion

Financing: primarily loans for the largest emerging countries, at no cost to the French government.

French Overseas Provinces Objective: assisting economic growth by funding and advising local governments, supporting the private sector, housing and land-use planning and development, and integrating the provinces into regional economies.

Financing: loans, credit guarantees, and private-sector financing (Bpifrance).

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Asia and the Pacific Objectives: promoting green and inclusive growth; sharing French savoir-faire.

Financing: primarily loans for the largest emerging countries, at no cost to the French government.

15.5% of financing activity

€1.2 Billion

7% of AFD’s government-allocated aid funding. €78 mm

Crisis-affected Countries Objective: Helping alleviate sources of tension in the near- and medium-term through development actions.

Financing: grants.

11.5% of grant monies for projects in Afghanistan, Haiti, Myanmar and the Palestinian Territories.

36.5%

79% of AFD’s government-allocated aid funding. €865 mm

of financing activity

€2.95 Billion

Sub-Saharan Africa The top-priority region

66%

of grants go to Heavily Indebted Poor Countries2

Objectives: promoting basic services access, sustainable cities, infrastructure, family farms, natural resource conservation, and job-creating enterprise expansion.

Financing: grants for poor countries, budget support, debt-reduction and development contracts, loans, credit guarantees, and equity stakes.

AFD’s government-allocated aid funding: Public monies for grants to fund development projects and to subsidize interest rates, allowing AFD to offer below market-rate loans.

1

Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Ghana, Guinea, Madagascar, Mali, Mauritania, Niger, Senegal and Togo.

2

1.5% of the French state-backed funding covers multiple regions.

1% of the financing that AFD Group commits covers multiple regions. mm = million

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FINANCING An increase in non-sovereign financing better serves local non-state entities Non-state entities — such as municipalities, regional governments, local authorities and private-sector companies — play an essential role in development and have substantial financing needs. In 2014, AFD made increased non-sovereign lending one of its one of its flagship objectives.

Over the past twenty years, developing countries have seen the rise of local governments with broader mandates, public enterprises with more financial autonomy, and private-sector companies with more jobs.

These non-state entities have gained power over local social services, employment, and the environment. They constitute vital relays for local development because they are local. They can provide sustainable services on a large scale to residents and small businesses in their region. However, they have a colossal need for financing that local and international financial markets only partially meet and that central governments cannot possibly fulfill.

AFD has a diversified range of financial tools, allowing it to propose long-term assistance, tailoring financing terms to fit beneficiary needs as they grow.

P ALESTINIAN TERRITORIES 1 non-sovereign loan in the Palestinian Territories st

At the end of July 2014, AFD signed an agreement for its first non-sovereign loan in the Palestinian Territories for €2.5 million. The funding will help expand Pharmacare, a manufacturer of generic drugs located in Ramallah in the West Bank. The Palestinian Authority currently must import more than 50% of needed pharmaceuticals; these imports cost more than locally-produced medicines. The loan will expand the range of medicine available to Palestinians, secure the supply, and lessen medical expenditure for the Palestinian Authority.

In light of this gap, AFD has increased the amount of loans, credit guarantees and private equity that it provides to “non-sovereign” entities, that is, public-sector borrowers whose debt has no state or central bank backing.

AFD has increased such financing by 37% since 2012. In 2014, non-sovereign financing reached €2.6 billion, accounting for 33% of AFD’s commitments and placing the Agency among the most active and experienced donors, particularly for non-sovereign lending to public entities. Strengthened by this positioning, AFD aims to specialize in financing municipalities and other non-sovereign public administrations.

Types of financial tools deployed AFD Group € million IN THE FRENCH OVERSEAS PROVINCES

516 26 1,004 245 310 758

IN FOREIGN COUNTRIES

2,897

2,321

SME financing (Bpifrance) Guarantees and private equity Loans Delegated funds from other donors Guarantees and private equity Grants and subsidies

(project grants, debt relief and development contracts, budget support, NGO support)

Sovereign loans

Non-sovereign loans

TOTAL: €8,1 Billion

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Our funding sources: financial markets and public support AFD primarily derives its funding from financial markets while carefully optimizing public funds.

FD funds itself through public bond issues on financial markets. In 2014, it sold debt worth €4.8 billion. The Agency’s good bond credit rating in turn allows it to offer lower-interest loans to its aid beneficiaries.

The French government does not subsidize AFD’s internal operations; it does, however, provide public funds to finance development projects.

The French Ministry of Foreign Affairs provides funding that the Agency deploys as grants for projects and NGO-led initiatives. The Ministry of Finance and Public Accounts provides funding that serves specific operations, such as budget support or debt relief in the form of debt reduction-development contracts. Finance ministry funding also subsidizes loans by paying for interest rate points, reducing the borrower’s cost. In this way, AFD transforms one euro of public funds into €11.50 of lending. In addition, the Ministry of Overseas Provinces funds certain types of projects in those territories.

Because AFD is able both to raise funding at favorable rates on international markets and design innovative cofinancing arrangements, its loan recipients benefit from leverage effects — increasing the rate of return on their capital investments to one higher than their debt cost.

International financial markets Bond issuance: €4,8 billion in 2014 and Capital

Public funds €1 billion in 2014 Grants to foreign countries

€758 million

Project grants: €207 mm (27%) Debt reduction-development contracts: €426 mm (56%) Budget support: €18 mm (2%) NGO grants: €58 mm (8%) Miscellaneous grants: €48 mm (6%) Subsidies to foreign countries and other preferential financing (to lower loan interest rates)

€311 million

Grants and subsidies to the French Overseas Provinces

€24 million

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Prioritizing

sub-Saharan

Africa Economic and demographic challenges

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The African continent is on a path toward sustained economic and population growth. For Africa and its neighbors, this trajectory presents new opportunities and challenges that call for suitable development policies.

mic should serve as the keystone for public policies in both African countries and the development community. The latter should work to ensure food security, make cities more sustainable, equip and open up isolated regions, and foster job creation — especially for the millions of young people who enter the job market each year.

The population of sub-Saharan Africa will double by 2050. This extraordinary demographic dyna-

These transformations, intense and accelerating, challenge our efforts toward alleviating poverty and so-

cial and spatial inequalities. Such challenges include sustainable natural resources management, particularly in the countries most affected by global warming. We must respond with basic investments in human capital, through education, jobs training, social protections, and healthcare services.

Kenya: Promoting wind energy and facilitating electricity access.

n 2014, AFD’s work in subSaharan Africa concentrated on infrastructure investment, private-sector support, and youth job training and placement. The Agency also worked toward equalizing regions, by developing rural areas and taking on the colossal challenge of urban growth. Such actions jointly aim at alleviating poverty and fundamental inequalities. A partner famous for its expertise, AFD offers solid support towards resolving these challenges.

Grants concentrate on Heavily Indebted Poor Countries AFD’s most concessional offerings concentrate in 16 Heavily Indebted Poor Countries (HIPC): Benin, Burkina Faso, Burundi, Central African Republic, Chad, Comoros, Democratic Republic of the Congo, Djibouti, Ghana, Guinea, Madagascar, Mali, Mauritania, Niger, Senegal and Togo. In 2014, these countries received 66% of project grants, worth €137 million.

AFD focuses most of its grant monies on projects that support education and professional or vocational training, as well as maternal and infant health. Such projects included the Sahel Solidarity Health Initiative,

Monitor French aid to heavily-indebted poor African countries on transparence-aide.gouv.fr This French-language site has a monitoring tool that citizens can use. They can ask for additional information and help improve project quality by giving their opinions, discussing events on the ground, or by alerting the website owner of a project problem.

which over the next three years will receive €30 million derived from a French tax on financial transactions.

France has committed €100 million annually to help fund the Muskoka Initiative, of which AFD deploys €48 million. In 2014, this included the €10 million AFD allocated to Chad to help reduce maternal, infant and neonatal mortality rates. In addition, AFD donated €16 million to INPP, a national jobs-training company in the Democratic Republic of the Congo, to fund program-quality improvements.

Fragile or post-conflict countries benefit from a specific approach focused on reinforcing development entities, stabilizing and reducing weaknesses, and promoting discussion about public policies.

These issues remain pressing in the Central African Republic and some countries in the Sahel region. AFD pays special attention to these nations due to their precarious political, economic and social situations.

Kenya Hybrid solar-wind generation systems for secondary power plants Kenya has a very low national electricity access rate, averaging only 30% nationwide. The government seeks expanded solar or wind energy to complement its diesel generators.

AFD loaned €33 million to Kenya to fully finance the addition of solar-wind hybrid systems at 23 secondary power plants. The project aims for expanded access to reliable and affordable electricity in rural areas, developing locallyavailable renewables that will substitute for diesel. This will reduce the cost of generating electricity in secondary power plants by 20% on average. It will also improve Kenya’s energy security and support local economies through a more reliable electricity supply.

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Niger: Young students attending the bilingual “Excellence Learning School” in Niamey.

€29

MILLION

for NGO projects in Africa, 61% of funding dedicated to NGOs working in the field.

For the United Nations, 2014 was the “International Year of Family Farming.” For AFD, it prompted a 39% increase in financing dedicated to African food security and rural development. Efforts included a €30 million loan and a €4 million grant to Burkina Faso, for developing resilience to both climate change and economic vagaries among residents in the eastern part of the country.

New opportunities to support economic growth Despite its persistent weaknesses, Africa has also seen growing investment and robustly expanding economies. The emergence of a middle class, a telltale sign of economic growth, also testifies to a peaceful sharing of its fruits. Debt relief efforts by international donors have stimulated public investment in infrastructure and services. A number of countries have seen their economies recover, boosted by mineral, petroleum, and natural gas discoveries, and by agricultural progress. We now face the challenge of making economic growth sustainable and beneficial for all.

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To this end, AFD has financed projects fostering inclusive economic growth. In Cameroon, a €65 million loan and a €60 million grant for debt relief, combined within a Debt Reduction-Development Contract (C2D), will assist land-use planning and development in secondary (medium-sized) cities. In the private sector, AFD funded telecommunications works in Djibouti through a US$40 million equity stake in Djibouti Telecom — a partner in two consortia now building submarine fiber-optic cable systems, the AAE-1 and the SMW5, to link Europe with Southeast Asia.

GUINEA Developing a quality education system for all Guinea faces immense challenges in providing educational quality, equity, and access for its one million out-of-school children. Consequently, the government has embarked on an ambitious education programme.

As part of a Debt Reduction-Development Contract (C2D), AFD granted Guinea €11 million in debt relief to promote a quality education system. The Global Partnership for Education and the United Nations Children’s Fund (UNICEF) have joined in the effort, with the three donors pooling resources in a joint Fund for Basic Education. AFD has thus helped develop an inclusive, quality education system that could reduce both gender inequalities and urban/ rural disparities — and also produce the human capital that Guinea’s economy needs. The programme will improve knowledge access and acquisition, especially for disadvantaged populations, from primary through junior-high levels; it will also build capacities within the Guinean education ministry.

P U B L I C AT I O N Juin 2014 / N

o

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Macroéconomie&Développement

Introduction Deuxième économie d’Afrique de l’Ouest, le Ghana s’est distingué au cours de la dernière décennie par la consolidation de sa démocratie et le renforcement de son régime de croissance. Ainsi, depuis 2005 et en dépit de la crise financière internationale, le pays affiche des taux de croissance moyens supérieurs à 7 % par an. De surcroît, le Ghana est récemment devenu producteur de pétrole et le développement du secteur des hydrocarbures a accéléré la croissance, qui a atteint près de 15 % en 2011. Ce renforcement de la croissance s’est traduit par une hausse du niveau de revenu par habitant et a permis au Ghana d’accéder au statut de pays à revenu intermédiaire de la tranche inférieure, selon le classement de la Banque mondiale.

Le Ghana se trouve néanmoins à un stade décisif de son processus de développement. D’une part, les enjeux sociaux demeurent importants, dans la mesure où un quart de la population vit encore au-dessous du seuil de pauvreté et où le secteur informel concentre 80 % de l’emploi. D’autre part, l’économie ghanéenne reste très dépendante de l’exploitation des matières premières. Le pays doit engager un processus de diversification de la structure de son économie afin de relever le défi de l’emploi et d’assurer une croissance pérenne et plus inclusive. Enfin, le pays est confronté à des déséquilibres macroéconomiques croissants qui risquent de peser sur sa trajectoire de croissance et d’hypothéquer ses avancées en matière de développement. A l’accentuation marquée du déficit budgétaire s’est ajoutée une dégradation importante

Ghana : les enjeux de la croissance face à la montée des déséquilibres* Clémence Vergne Division Analyse macroéconomique et risque pays Département de la Recherche vergnec @ afd.fr

de la balance courante. Ce phénomène de déficits jumeaux s’est notamment illustré par une forte croissance des niveaux de dette domestique et externe, et par une dépréciation rapide de la monnaie nationale.

Cette étude présente une analyse de la situation macroéconomique et sociopolitique du Ghana. Elle s’articule autour de cinq parties. La première partie retrace le cheminement historique du pays vers la démocratie ainsi que les enjeux sociaux auxquels le pays demeure confronté. La deuxième partie s’intéresse aux évolutions structurelles du modèle de croissance de l’économie ghanéenne. La troisième partie est consacrée aux fragilités des finances publiques à travers l’analyse du manque de maîtrise de l’exécution budgétaire et de la dynamique de réendettement. Le système bancaire ghanéen est examiné dans la quatrième partie. Enfin, la dernière partie se focalise sur l’évolution des équilibres externes afin de mettre en lumière les vulnérabilités y afférant.

* Rédaction achevée en janvier 2014

PERSPECTIVE Jean-Pierre Marcelli Director, AFD Africa Department Africa as the top priority: a presidential commitment and new strategy for AFD “During the Elysée Summit for Peace and Security in Africa, in December 2013, President François Hollande announced that France would double the amount of aid funding allocated to AFD Group for projects on the African continent, including North Africa; total funding for Africa should reach €20 billion from 2014 to 2018. During the same period, AFD Group aid financing in sub-Saharan Africa will reach €9.2 billon.

This funding will allow us to seize opportunities while managing risks posed by Africa’s dual economic and population growth.

Our newly-defined 2014-2016 strategy for sub-Saharan Africa pursues inclusive and sustainable development as its goal. The strategy has two headings: alleviating poverty and promoting sustainable economic growth.”

Ghana: challenges to growth amidst rising imbalances As a complement to its financing activity, the Agency has expanded its knowledge creation efforts. AFD helps analyze the economic and social situations of many countries, particularly those with mineral wealth and those in the Sahel. The Agency has increased its attention to measuring and monitoring its financing outcomes and to evaluating impacts.

MALI Rural economic development in Ségou and Timbuktu In most regions of Mali, economic growth rests on intensifying, diversifying and creating value from farming and herding.

AFD has supported this growth with €33 million in financing (€27 million in loans and €6 million in grants); the funding will strengthen agricultural and livestock producers and value chains in the Ségou and Timbuktu Regions. The local and regional governments will play a central role in the project, steering and implementing local economic development. The project anticipates several outcomes: greater value created from agriculture, including meat and poultry products from secure mobile livestock processing; conflict prevention, through action on immediate and structural causes; and positive environmental effects, by building capacities for sustainable natural resource management.

Ghana: Supporting family farming in West Africa.

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INNOVATION AFD funds its first projects led by French regional governments In 2014, for the first time, French regional governments initiated and carried out projects with AFD financing. Representatives from three of France’s regions (similar to counties) — Brittany, North Pas de Calais, and Ile de France — presented economic development projects to their peers in Burkina Faso, Mali and Madagascar, thus becoming development partners for these localities.

through the Antananarivo metropolitan area.

The improvements will help to reduce traffic congestion, improve security along the line, and boost social and economic development in the districts it serves. This new “regional codeveloper” experiment will run into 2015, with a planned second investment of €1.5 million (the same as the first).

AFD financed an Urban Mobility Improvement Programme developed by the municipality of Antananarivo in partnership with the Ile de France Region. Programme managers will upgrade a strategic bus line that runs

With the upcoming 2015 Paris Climate Conference in mind, along with the gradual implementation of the “One Per Cent Waste” initiative, AFD will prioritize further funding for projects that fight climate change or improve waste management.

Gabon: Protecting forests.

Climate, gender, partnerships: AFD expertise in the field In sub-Saharan Africa, AFD maintains 30 field offices and bureaus, the largest office network of any bilateral donor working south of the Sahara.

AFD’s longstanding and extensive presence in many countries has enabled it to deepen its understanding of local conditions, create close relationships with all stakeholders, and provide technical assistance and advice. This holds both during projects and in longer-term policy planning with central governments In every sector of intervention and all its actions, AFD fosters ecologically and socially sustainable development models. Actions aiming to create value from African natural capital must adhere to sustainability principles while improving the well-being of local populations. AFD also seeks to reduce climate-change vulnerability in sub-Saharan Africa.

It therefore supports mitigation projects for agriculture and infrastructure, while attenuating climate change by helping countries reduce their carbon-dioxide emissions. AFD also provides financing and technical assistance for effective public policy programmes.

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In addition, in every funded project in every sector, AFD takes special care to support the vital role of women as development actors, especially in the poorest countries. In one such effort to reduce gender inequality, an AFD grant to Benin for €10 million will help provide quality education to as many young people — especially girls — as possible.

Reviving

employment and development in the

Middle East and North Africa

n 2014, AFD financing activity in the Middle East and North Africa increased by 26%, a considerable jump after widespread political instability led to a 2013 drop. AFD formulated a new 2015-2018 strategy to guide its response to the region’s great development challenges.

The strategy centers on three goals: ›› Promoting sustainable economic growth that creates decent jobs.

›› Strengthening social cohesion through youth employment and, in countries affected by the Syrian war, helping localities host displaced populations.

AFD financing for the Middle East and North Africa primarily takes the form of loans (69%). However, grants have funded humanitarian actions for populations in hardship conditions, such as the Palestinians or Syrian refugees living in Jordan and Lebanon.

›› Helping to manage fragile natural capital and mitigate climate disruption.

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WORKING WITH NGOs Supporting career training and placement for youth in Egypt

Fostering sustainable economic growth that creates jobs Unemployment among young people is especially high in the Middle East and North Africa, where one in four is jobless. AFD therefore bolsters career-training services and helps firms develop the means to prosper, particularly small and medium-sized companies.

In Morocco in 2014, AFD financed youth skills development and employment access through a €50 million loan and a €500,000 grant; this formed part of an NGO cofinancing initiative with the World Bank and the African Development Bank. This targeted budget support follows up fifteen years of AFD-funded job training. The funding will also support Moroccan social inclusion policy by creating training services for non-graduates. In addition, it will

As part of the AFD strategy of cofinancing nongovernmental organizations (NGOs), it will donate €281,000 over the next three years to Plan France, the French chapter of an international NGO. The grant funding will support job training and placement for young men and women in three Egyptian cities. Plan France will work with its sister organization, Plan Egypt, to aid 2,000 vulnerable youth in finding decent jobs. The initiative will provide two forms of assistance: training for careers in particular sectors (tourism, healthcare, retail commerce, and telecommunications), and coaching in personal and job-seeking skills. Plan France aims to develop a network of key public- and private-sector contacts, including links with about one hundred partner companies through internships and apprenticeships. The project also aims for more job placements among the most vulnerable and discriminated-against workers, especially young women and the disabled; it will include outreach to communities and potential employers, and advocacy on behalf of these workers with Egyptian authorities.

improve company efforts to identify their skill needs and help them play a stronger part in training and certifying workers.

Supporting economic growth also means modernizing and upgrading small and medium-sized companies.

In this spirit, AFD granted €5 million to the Palestinian Authority for improvements to the quality, productivity, expertise, marketing, exports, and credit access of 50 small and medium-size Palestinian specialty manufacturers. The companies ope-

Morocco: Supporting job training.

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rate in five sectors: stone and marble products, leather and shoes, textiles and apparel, food and food processing, and construction and packaging materials. Over three years, this project will help stimulate Palestinian private-sector competitiveness and high-quality job creation.

Similarly, AFD funded the Financial Center for Entrepreneurs in Tunisia (CFE Tunisia), a start-up microfinance institution, through a €1 million technical assistance grant; AFD’s subsidiary Proparco also contributed an equity investment. CFE Tunisia is a new lender to very small, small, and medium-sized companies. In five years, it expects to have 7,000 clients, 15,000 outstanding loans, and a credit portfolio worth €26 million.

P U B L I C AT I O N AFD Evaluation

exPost ExPost

N° 54

January 2014

L’AFD ET LES AIRES MARINES PROTÉGÉES Refining AFD’s Interventions in the Palestinian Territories Increasing Resilience in Area C

Carine VIAC, Imane LAHLOU, Isvary SIVALINGAM, Roger SCHRADER & Tarik CARNEY

Exécution : Planet 7 – Octobre 2013

Madagascar Maroantsetra © AFD – Nicolas Hertkorn

Under the supervision of Thierry SÉNÉCHAL

Refining AFD’s interventions in the Palestinian Territories: Increasing resilience in Area C.

Research Department Evaluation and Capitalisation Unit Agence Française de Développement 5, rue Roland Barthes 75012 Paris < France www.afd.fr

PROGRAMME EVALUATION A Franco-Tunisian jobs-training partnership Between 2009 and 2012, AFD used €1 million in grants to finance six partnerships between French and Tunisian trade unions and management, aimed at strengthening their role in the Tunisian national job-training system.

Beyond sharing each country’s experiences, the programme allowed Tunisian trade unions and company managers to define their own job-training visions and tools.

A post-project evaluation showed that the programme’s actions generally proved pertinent and consistent with both national guidelines and AFD’s sectoral and regional policies.

However, their impacts and sustainability could stand improvement, notably in the next round of financing.

Mindful of this experience and strengthened by its lessons, in 2014 AFD financed a Job Training and Placement Programme to improve professional and vocational training for manufacturers. The programme will gear training to needed expertise, opening centers near industrial clusters, modernizing equipment, creating classrooms, and improving teaching quality, among other efforts.

Palestinian Territories: Supporting small and medium-sized companies.

A special partnership with the European Union A group of European donors – AFD, KFW, European Investment Bank, and the European Bank for Reconstruction and Development – has stepped up efforts to coordinate their financing activities through joint operations, using funds delegated by the European Commission via its Neighbourhood Investment Facility.

In 2014, 57% of AFD’s financing commitments for actions in the Middle East and North Africa went into cofinancing pools; the European Neighbourhood Investment facility mobilized 76% of this cofinancing for European development cooperation. Thus in 2014, AFD implemented €134 million of the financing delegated by the European Commission for projects and assistance in the region.

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Tunisia: Reconstructing and integrating a residential district in Essourour, Gafsa.

Contributions to the Marseille Center for Mediterranean Integration AFD actively participates in the Marseille Center for Mediterranean Integration, a forum for dialogue and sharing good sustainable-development practices throughout the Mediterranean region. The Agency manages three programs for the center, on water-demand management, urban mobility, and jobs and social protections. AFD leads these programs in tandem with its work in North Africa. The programs prompted an employment workshop in Beirut, conducted along with the World Bank and the European Training Foundation (an agency of the European Union). AFD also hosted two regional events with the Center: a water-demand management workshop during the 2nd Mediterranean Water Forum (in Murcia, Spain, in November), and an exchange session on urban public transit services in Izmir (Turkey), (the latter co-produced with Codatu, a technical partner of the program).

EGYPT Connecting 1.5 million households to natural gas lines The Egyptian government has pursued a dual policy of reducing subsidies for liquefied petroleum gas (LPG) and securing residential access to energy.

AFD has supported this policy by financing the distribution of locally-produced, cleaner and cheaper natural gas. The Agency made a €70 million sovereign loan to Egypt, combined with a €68 million grant delegated from the European Commission’s Neighborhood Investment Facility; the World Bank also supplied financing. Over four years, the project will extend gas lines, connect households (including those in disadvantaged districts), and build capacity among local gas distribution companies.

It will also reduce carbon-dioxide emissions, and generate savings on national energy expenditures of US$227 million annually.

Lebanon: A programme for cultural preservation and urban development in Tripoli.

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Contributing to

regional and environmental

balance in Asia and the Pacific

FD pursues a strategy of green and inclusive growth in 18 Asian countries. From 2013 through 2016, its operating strategy focuses on urban issues and climate changerelated challenges throughout the region. In the less-industrialized Asian countries, AFD will accentuate the expansion of industry, business and trade, and the promotion of social cohesion.

The year 2014 saw large financing commitments to South Asian countries – Bangladesh, India and Sri Lanka – as AFD promoted energy efficiency, water, and urban transit

projects. The Agency also opened a bureau in Myanmar, where it can offer both grants and loans. In Asia, AFD finances projects that readily take advantage of French expertise and also promote French economic interests in the region.

Among its financial instruments, AFD primarily uses loans for Asian funding, concentrating grants and subsidies in Afghanistan and Myanmar. For Asia and the Southern Caucasus, AFD increasingly mobilizes European funding available through investment facilities; in 2014, this totaled nearly €35 million.

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In 2014, climate-friendly projects accounted for

71%

of financing activity in Asia1.

Combining urban and climate-related issues AFD financed the fifth phase of Vietnam’s national budget programme for climate-change adaptation, as well as subway extensions in Bangalore, India and Hanoi, Vietnam. The Agency also financed innovative energy-efficiency projects, such as public lighting in India, rural electrification in Cambodia, micro-hydroelectric plants in Sri Lanka, a modernized electrical grid in Dhaka (Bangladesh), and wastewater treatment plants on Sri Lanka’s southwestern coast and in the city of Xiangyang, China.

Preserving biodiversity AFD financed a wetlands restoration project in China’s Shanxi Province, and a nature reserve management project for Cambodia, Laos PDR and Myanmar. These projects aim to preserve natural habitats for endangered species and to share the benefits of sustainable economic development with surrounding village communities.

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Bangladesh: Solar photovoltaic panel vendor in Dhaka.

SINGAPORE The Vivapolis seal of approval goes to a seminar on sustainable cities In November 2014, AFD and Cefeb, its business university, partnered with the Singapore Cooperation Programme to organize a seminar in Singapore on sustainable cities. The seminar, entitled “Integrated Urban Development,” targeted high-level governmental decision-makers from Indonesia, the Philippines, Thailand and Vietnam. It was produced with support from Algoe/ Essec Asia-Pacific and mainly financed by the Fund for Technical Expertise and Experience Exchange, or FEXTE. Participants examined all aspects of urban planning, from conception to implementation and operation of urban services, by comparing French and Singaporean planning models. The seminar showcased French products and services for “better city living,” with several French companies speaking about sustainable-city simulators, groundbreaking mobility solutions, and other innovations. Attendance by institutions such as AFD and ADEME, the French energy and environment agencies, made it possible to present French models of public-private partnerships and urban planning. The seminar earned the Vivapolis seal of approval.

1

AFD only, not including Proparco.

India: AFD has financed the construction of the first aerial tramway in Kochi (computer-generated image).

INDONESIA Helping expand the “Blue Revolution” The Indonesian government has designated the Indian Ocean as one of the country’s development pillars. AFD has loaned Indonesia €90 million to finance a pilot project for fish exports. The project will renovate five ports to qualify as certified, environmentally-friendly “EcoPorts” — facilities that mitigate climate-change impacts, generate jobs, and improve the quality of seafood and marine and coastal-area management.

Support for the least-industrialized countries and the poorest In the mountainous areas of the Greater Mekong Sub-region, AFD has financed a project to spread agro-ecological principles and thus promote environmentally-friendly, high-yield agriculture.

In Afghanistan, Agency has financed a programme to improve maternal and infant health, implemented by the Aga Khan Foundation. In Cambodia, AFD supports microfinance institutions that increase the affordability of solar electricity for rural families. In Myanmar, AFD financing covers installation of clean water-supply lines in a poor district of Mandalay, as well as technical assistance for municipal water management.

INDIA Financing the Kochi Metro Kochi is a dynamic southern India port city with two million inhabitants. AFD has loaned €180 million to finance an aerial tramway that should carry 360,000 passengers annually once it goes into service in 2016. The request for tenders was open to national and international companies, particularly for the tramway’s advanced-technology components; several French companies succeeded in winning bids. As a complement to the loan, AFD made an €800,000 grant to Kochi Metro Rail Ltd. (KMRL) to fund technical assistance; experts and professionals from SYTRAL, the Lyon municipal transport authority, will help KMRL implement its integrative transit plan and operate the tramway.

The EcoPorts project will benefit from a partnership with French port authorities and receive scientific advice from INDESO, an oceanographic project that uses aerospace technologies for data, modeling and forecasting.

CAMBODIA Connecting isolated villages to the electricity grid The Cambodian government aims to connect all villages and 70% of households to the electricity grid by 2020, while lowering rates in rural areas. AFD has given Cambodia a non-sovereign €70 million loan (combined with a €1 million grant delegated from the European Commission) for an electricity-access project in three provinces: Kampong Cham, Kratie and Kho Kong. After installation of the infrastructure — 165 kilometers (km) of high-voltage lines, five transformers and 225 km of medium-voltage lines — AFD will help build local capacities through an operations program for the Electricity Authority of Cambodia. The project will allow for nearly 38,000 homes to acess power.

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Promoting

equitable and sustainable growth in Latin America and the Caribbean

Latin American and Caribbean countries count among the most urbanized places in the world, marked by high inequality and major environmental challenges. AFD works in the region to promote green and inclusive growth. The Agency assists central and local governments and public enterprises with urban development, environmental protection, inequality reduction, and their fight against climate change.

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Colombia: AFD’s chief executive speaks at the World Urban Forum.

FD financing commitments to Latin America and the Caribbean – €1.2 billion in 2014 – and related partnerships strengthen bilateral relations with France. By the end of 2013 and the beginning of 2014, AFD had already deployed €14 million from the European Commission’s Latin America Investment Facility (LAIF) as part of its operations in Mexico; the European Commission also extended €3 million from the Caribbean Investment Facility (CIF) through the Agency.

The year 2014 witnessed a reinforced AFD presence in the region with operations in new countries. In Peru, AFD has promoted sustainable and social housing through a €120 million loan to the public-sector investment fund, Fondo Mivivienda. In Lima, AFD has financed the second Metro line via a €120 million loan to Peru’s central government. At the end of 2014, AFD began preparing 2015 financing arrangements for energy and water projects in Bolivia and Ecuador.

Urban development In Paraná State in Brazil, AFD supports municipal waste management efforts, extending urban-development operations begun in Sao Paolo and Rio di Janeiro States. The Agency has loaned €45 million to the regional development agency, Fomento do Paraná. The funds will exploit French administrative experience by bringing in experts from the RhoneAlps regional government, supplying technical cooperation to accompany the loan. In addition, AFD has ap-

proved a €12.5 million loan for the Republic of Suriname, which will allow its public enterprise SWM to expand drinking-water production facilities in provincial cities. AFD also provided considerable assistance in organizing the 7th World Urban Forum, which took place in Colombia in April.

MEXICO Reducing the carbon footprint of electricity production Mexico has two objectives for its electricity sector: increasing power generation and distribution capacity, and diversifying production toward lessemissive technologies. AFD has helped meet these two criteria by lending to the Federal Electricity Company, which generates, transports, distributes, and sells electricity nationally. Following an initial €250 million loan made in 2011, AFD committed to a €100 million loan in 2014; this will finance an infrastructure investment programme focused on expanding renewables usage and reducing power grid losses.

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Dominican Republic: Old and New Barquita.

Fighting climate change

improve its career-training programs via a €5 million grant to its national training institute, Institut National de Formation Professionnelle (INFP).

AFD also managed the 2014 deployment of US$15 million (delegated from USAID and European funds) for rebuilding the general hospital in Port-au-Prince.

In the Dominican Republic, AFD loaned the government US$50 million for climate-change adaptation, funding water and sanitation infrastructure. In Brazil, AFD loaned €165 million to the national development bank, BNDES; the funding will finance energy-efficiency and renewables projects to curb greenhouse gas emissions. AFD also approved a €100 million loan to Corporación Andina de Fomento (CAF), the Latin American development bank and a longstanding regional partner; this will finance low-carbon urban development programmes in several countries in the region.

ter excellence and further internationalize the Pontificia Universidad Católica Madre y Maestra (PUCMM), a leading university. AFD also loaned €5 million to the Educational Credit Foundation (FUNDAPEC) to expand its student loan program.

In the Dominican Republic, AFD has supported higher education through a US$10 million loan; this will bols-

P U B L I C AT I O N

Promoting social equality Janvier 2014

Les enjeux du développement In Colombia, AFD has developed a en Amérique latine vast programme to support health insurance reform, one that will draw on French social-protection expertise. In Haiti, AFD continues to finance major post-earthquake reconstruction efforts. The Agency has aided the Republic of Haiti to

A SAVOIR

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Dynamiques socioéconomiques et politiques publiques

Ces défis sont autant de motifs d’intervention et de collaboration pour une institution de développement comme l’AFD, dont l’activité dans cette partie du monde entend contribuer au mieux à l’épanouissement des relations entre l’Amérique latine et la France. Dans un tel contexte, la seconde édition de cet ouvrage, actualisée et enrichie, renouvelle aujourd’hui un regard attentif sur les réalités économiques et sociopolitiques d’une région en pleine mutation, avec laquelle beaucoup reste à partager.

SOUS LA DIRECTION DE

COORDINATEUR

Carlos QUENAN Économiste, professeur à l’IHEAL

Eric JOURCIN Département Amérique latine et Caraïbes, AFD jourcine @ afd.fr

Sébastien VELUT Géographe, professeur à l’IHEAL

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Dynamiques socioéconomiques et politiques publiques Les enjeux du développement en Amérique latine / Janvier 2014

Au-delà de la diversité des situations, les pays d’Amérique latine présentent des traits communs : la plupart d’entre eux ont accompli des progrès considérables au cours de la dernière décennie, mais doivent encore faire face aux enjeux de leur développement. Certes, l’amélioration de la gestion macroéconomique associée à une conjoncture favorable a permis une croissance vigoureuse dans les années 2000, puis une bonne résistance face à la crise internationale. De plus, ce dynamisme économique a souvent été conjugué avec de nouvelles politiques sociales et une réduction de la pauvreté. Toutefois, malgré ces évolutions positives, un certain nombre d’obstacles restent à surmonter pour installer durablement la croissance et assurer un développement soutenable.

Les défis sont importants : réduire les inégalités sociales et spatiales, dynamiser la gestion des villes et préserver leur environnement, renforcer l’épargne et l’investissement, promouvoir les gains de productivité, améliorer la qualité de l’éducation et de la formation, structurer la protection sociale.

Les enjeux du développement en Amérique latine

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Institut des Amériques Deuxième édition, actualisée et enrichie

A SAVOIR

Development Challenges in Latin America: New edition co-published with the America Institute (available in French, Spanish and Portuguese)

Marie Joly, Gilles Genre-Grandpierre

AFD Dominican Republic Office

INTERVIEW

In Santo Domingo, “integrated urban development” alleviates both poverty and pollution.

The case of East Santo Domingo illustrates several urban development challenges facing the Dominican Republic. The Eastside, particularly exposed to the effects of climate change, lacks adequate infrastructure, facilities and housing, placing its nearly 500,000 residents in a precarious condition.

Hoping to protect the most vulnerable of these, concerned city officials have launched an ambitious rehousing, redevelopment and transportation programme; AFD has made a US$210 million loan to help cover its estimated cost of US$670 million.

Gilles Genre-Grandpierre and Marie Joly from the AFD Dominican Republic office discuss the stakes and the challenges involved in this project.

What is innovative about this AFD-financed urban project in Santo Domingo?

Gilles Genre-Grandpierre: This project is an innovative one for Latin America and the Caribbean: it economically and socially integrates totally marginalized residents into a comprehensive urban plan, one that both expands the public transit system and fights pollution.

The project has three interdependent parts: (1) an environmentally-sound redevelopment of the Barquita slum along the Ozama River waterfront, rehousing the slum dwellers; (2) a four-kilometer eastward extension for the Line 2 of the Metro, connecting to downtown Santo Domingo; and (3) creation of streetcar lines and a fluvial transit system, the Acuabús, that will connect with the Metro. This extended public transit system will help integrate the disadvantaged Eastside with the rest of the city.

A presidential special commission oversees the project; the commission brings together public and private-sector actors who have rarely worked together until now — government officials and community members representing the city, civil society, companies, and citizenry.

With these elements, we could call this a “Frenchstyle” integrated urban project. It is innovative in another way: although a public-sector project, it has the chief executive of a private-sector company appointed to run it, rather than a public administrator.

What are the various components of the programme?

Marie Joly: The project starts by relocating residents of the Barquita slum to housing in a nearby district, “New Barquita”, developed with basic services and public community facilities. At present, the Barquita is a slum with 8,000 residents. The area is particularly vulnerable to climatic events because of its location on the Ozama River, at a bend that creates a siphon effect. During storms, hurricanes, and downpours, low-lying sections of the district systematically undergo flooding. This to-be-depopulated section of the Barquita will also see environmentally sound redevelopment, transforming it into a riverside greenway.

The relocated residents, who rarely own personal vehicles, usually work informally for very low wages and mostly walk to work or use motorcycle-taxis, which are very expensive, polluting and dangerous. These residents will now have access to the Acuabús, a new river-based transit system with ten stations on the Ozama.

The Acuabús and the Metrocable streetcar systems will directly connect to a Metro station on the newlyextended Line 2. This extension will serve as a symbol of integration, since it crosses over the Ozama River. The new four-kilometer section running from downtown to the Eastside will have four new stations.

What outcomes do you expect from the project?

Gilles Genre-Grandpierre: This ambitious pilot project will serve as a development model for other slum districts in Santo Domingo. The project has the following aims: ›› Reintegrating slum districts and improving housing conditions for 8,000 residents. ›› Equalizing the city’s districts by providing uniform services and facilities. ›› Offering intermodal and clean public transit options – Metro, Acuabús and Metrocable – in East Santo Domingo, connecting it with the rest of the city.

This will save Eastside commuters time and money while increasing their security and comfort. The Metro line extension should abate about 200,000 tons of carbon-dioxide emissions. ›› Redeveloping the Ozama River waterfront and preserving natural resources by curbing pollution, in the river and downstream to the Caribbean.

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Contributing to the development

of

Franceâ&#x20AC;&#x2122;s overseas provinces

In the French Overseas Provinces, AFD brings financing and expertise to public administrations, seeks out regional projects, and supports companies in stimulating economic activity.

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Martinique: Generating electricity from biomass.

516

€7 mm (0.5%)

€ mm (33%) Private-sector financing (Bpifrance)

Proparco

0.37

€ mm (0.1%) Grants and subsidies (Foreign Affairs Ministry) €19 mm (1.4%)

n the worsening economic and social context of France’s overseas provinces, AFD strives to answer calls from public officials and private companies for basic and much-needed infrastructure.

Private-sector credit guarantees

86

mm (6%) € Private-sector lending and bank refinancing

Financing committed in 2014 (AFD Group)

€919 mm (59%)

Public-sector lending

Supporting local public policy Since 2008, the overseas economies have seen recession, a weakening of social equilibrium, and acute societal changes — primarily demographic — that make it harder to recapture a growth dynamic. In this context, spending on public projects, with leadership from local authorities, constitutes an imperative stimulus for economic growth.

For the fourth-consecutive year, AFD increased its commitments to the French Overseas Provinces, reaching a record level: €1.55 billion

In 2014, AFD prioritized support for public-sector actors, resulting in €919 million of financing commitments. Expressions of this support appear in infrastructure financing for a small town in Mayotte, aid to a nearly-bankrupt town in Martinique, land-development finance for a group of towns in Reunion, and funding for a leading hospital in New Caledonia.

loans and equity capital to semi-public enterprises working in the land development and housing sectors.

AFD emphasized environmentally sound projects for water, sanitation and waste management infrastructure. The Agency also increased financing for medical and social services. In addition, AFD provided

During 2014, AFD also sought ways to tailor its offerings to fit the needs of its financing beneficiaries — for example, answering their short-term financing needs through a broadened definition of projects qualifying for loans and by pre-financing public grants and subsidies.

FRENCH POLYNESIA A partnership framework agreement between French Polynesia and AFD A partnership agreement signed in October 2014 provides a spectrum of aid to French Polynesia: strengthening economic and environmental tools, supporting sectoral policy design, and assisting with economic forecasting.

Climate change adaptation constitutes the overarching theme of the agreement. More specifically, AFD technical and financial assistance focuses on an organizational plan design for the healthcare system and strategies for a future transportation and shipping master plan.

—

“This partnership is a token of our trust.” Édouard Fritch, President of French Polynesia

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OCTOBER International conference on biodiversity and climate change AFD participated in the Europe Overseas Roundtable on Biodiversity and Climate Change, hosted by the International Union for Conservation of Nature (IUCN) with support from the European Commission. The joint consensus adopted by attendees has five

pillars: encouraging adaptation measures and changing energy models, preserving biodiversity, developing green and “blue” (marine) economies, backing innovative solutions, and improving finance facilities and governance.

Bolstering economic initiatives Economies in the French Overseas Provinces stand out for their genuinely entrepreneurial character.

However, structural weaknesses put entrepreneurs – the creators of a robust economic fabric – at a disadvantage. AFD tries to remedy this situation by offering start-ups and established businesses several business-bolstering solutions, either directly or on behalf of Bpifrance, a national economic-development bank.

AFD provides financing directly to companies via medium- and longterm loans and loan guarantees, thus assisting business expansion.

The Agency also offers equity and quasi-equity instruments, such as risk capital and revenue participation agreements. In conjunction with Bpifinance, AFD provides short-term financing to meet business cashflow needs. In addition, AFD strives to build the microcredit market; in 2014, the Agency financed a nonprofit known as ADIE, dedicated to providing start-up grants and loans to “micro-entrepreneurs.”

In 2014, AFD provided a total of €629 million to entrepreneurs and companies in the French Overseas Provinces, on its own account or on behalf of Bpifrance.

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MAYOTTE Training seminars for local government executives FRENCH GUIANA Reducing digital isolation AFD has made a €1.2 million loan to Guyacom, a local telecommunications company, to supplement commercial bank loans and national and European Commission grants.

The company’s infrastructure investments, partially financed by AFD, focus on laying fiber-optic cable between Cayenne and Saint George de l’Oyapock. Improving the speed and reliability of network connections will stimulate economic dynamism in the region. It will also facilitate projects in several domains — teaching, health, and public services.

In addition to financing, AFD brings support and expertise to its public-sector partners, though training seminars, among other means.

In an effort to improve municipalfinance management in an overseas province, the AFD Mayotte office collaborated with the Centre national de la fonction publique territoriale (CNFPT), the French provincial public administration training center, and with Cefeb, the Agency’s business university. They jointly hosted training seminars for about 20 administrative executives.

GUADELOUPE Financing a strategic heritage plan for a social housing company in Guadaloupe AFD loaned €18.8 million to a social housing company, the Société Immobilière de Guadelope (SIG) to underwrite its 2014-2016 strategic heritage planning. AFD’s financing centers on three activities: acquiring property, financing seismic upgrades, and starting up street-level retail shops in apartment buildings.

Responding to fragile states and those afflicted by crisis or violence Four intervention principles for crisis-affected and fragile situations Do no harm: in funded projects, he year 2014 saw crisis and instability multiplying in new places, revealing once again the crucial interdependence between security and development.

More urgently than ever, AFD mobilized resources to provide practical responses, working closely with local and international partners.

avoid unintended consequences that reinforce weaknesses or causes of conflict.

avor dual-purpose operations, F that combine development with disaster prevention.

Improve links between

Enhance coordination in joint

humanitarian relief and development operations.

actions with international partners.

One priority underpins these four principles: basing AFD actions on the most granular analyses of evolving situations and circumstances.

Crises provoke great damage ›› More than 8,000 people died in the 2014 Ebola outbreak. ›› Nearly three million Syrian refugees have been displaced, of whom 1.3 million have fled to Lebanon, constituting almost 25% of that country’s population. ›› Nearly a quarter of the population of the Central African Republic fled the war or sought safety in neighboring countries in 2014.

In the Central African Republic, AFD financed highly labor-intensive public works in the city of Bangui.

The Agency also funded the national Ministry of Education and restored healthcare services in Bangui, Berberati and Bambari. AFD worked to ensure electricity supply from the Boali Hydroelectric Power Plant and access to the capital via the Bangui M’Poko International Airport.

The Agency also helped create a multi-donor trust fund, initially endowed with €64 million, to enhance the coordination of European aid deployment and the articulation of relief and development operations.

›› Among countries recovering from armed conflicts, 40% fall back into conflict within ten years.

After a call for project tenders in Lebanon and Jordan, AFD assisted Syrian refugees and their hosts, reducing inter-community tensions and the threat of destabilization in areas bordering Syria. This AFD aid helps affected municipalities respond to the influx of refugees and the consequent sudden increase in public service demand. The programme also addresses the psychosocial effects of traumas afflicting refugee populations.

Lebanon: Young Lebanese pupils and Syrian refugees attending one of the schools managed by Asmae and Alpha, two AFD-financed NGOs. our acti o n s

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Guinea: An AFD-funded Ebola treatment center in Macenta.

Pierre Salignon

AFD Project Manager, Health and Social Protection Department

Olivier Ray

AFD Head of the Crisis and Conflicts Unit

INTERVIEW

AFD responded to the Ebola crisis How did AFD respond during the Ebola outbreak?

Despite the increasing difficulty of accessing crisisaffected areas in the Sahel, AFD continued to finance basic public services and local governments, including those in the most remote regions. The Agency also helped West African governments to combat the Ebola outbreak.

AFD has changed its intervention modalities to increase its flexibility when responding to crisis and conflict situations. Such situations challenge development banks, which confront the urgent need for swift action even as they prepare for post-crisis recovery through more structural intervention. This type of action — interventions combining short-, medium- and long-term impacts — has become standard in AFD operations.

All crises share one thing: extreme political, economic, and social instability. AFD’s challenge lies in analyzing situations and anticipating various scenarios, the better to adapt its financing and operations to the actual situation. For this reason, AFD strategies for fragile states include multi-risk and -scenario analyses.

Extremely complex situations in crisis-affected countries call for joint action

AFD’s range of financial instruments has evolved to permit it to react more quickly as a situation requires, without abandoning its job as a development bank or deviating from its foundational intervention principles.

The first such principle is to build the capacity of each partner and country, thereby ensuring the durability of AFD-funded works.

Extremely complex situations in crisis-affected countries call for joint action. For this reason, AFD defines principles for its work and for tasks shared with nongovernmental organizations, the military, and international partners, in order to ensure the greatest possible consistency between diplomatic, defense and development efforts.

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Pierre Salignon: From the very beginning of the Ebola epidemic, AFD responded to the urgency of the crisis.

The virus first appeared in 2013 in Guinea’s Forest Region and spread to other West African countries.

By the end of 2014, the epidemic had claimed nearly 8,000 victims, and officials from the World Health Organization called it “the most serious international public health emergency in recent years.” France witnessed a reinforced national and international response to the crisis; AFD participated in this effort in an unprecedented way.

What measures did AFD put in place?

Olivier Ray: Since April 2014, AFD has monitored the Ebola epidemic closely through a dedicated unit.

On 26 September 2014, AFD hosted a meeting of French professionals working to end the outbreak, to permit exchange of information and experiences.

The Agency also actively participated in interministerial information and cooperation meetings organized by the crisis center of the French Ministry of Foreign Affairs and International Development.

What did AFD do in the field, in countries affected by the epidemic?

Pierre Salignon: In October 2014, the AFD board of directors rapidly approved three projects aimed at halting the spread of the virus. These simultaneously bolstered the short- and long-term response capacities of the Guinean and Côte d’Ivoirian national health services, and supported French epidemic-management expertise through our partners — such as the French Red Cross, which opened an Ebola treatment center in Macenta, Guinea, and the Pasteur Institute, which set up a subsidiary institute in Conakry. AFD has also worked since 2008 with the Mérieux Foundation on laboratories and epidemiological monitoring in West Africa. The RESAO-LAB+, a network of biological and medical testing laboratories in West Africa, also mobilized to address the effects of the outbreak.

The network thus created received €5 million and has worked since 2013 in seven countries: Benin, Burkina Faso, Guinea, Mali, Niger, Togo and Senegal.

Crises and conflicts Tailor-made responses Syria Afghanistan

Mali Haiti

Ebola

Palestinian Territories / Gaza Central African Republic

Côte d’Ivoire

Afghanistan

West Africa (Ebola)

Côte d'Ivoire

CONFLICT

HEALTH CRISIS

POST-CRISIS

Objectives

Objectives

Objectives

ink diplomacy, defense L and development Rebuild infrastructure Develop agricultural and rural areas Support maternal and infant health

Means Coordinate actions of French Ministries of Foreign Affairs and Defense Fund NGOs Support the Afghan Ministry of Agriculture

Haiti NATURAL DISASTER

Objectives trengthen state S institutions Rebuild urban areas Bolster food security Revitalize the healthcare system

Means Coordinate French, EC and USAID funds Fund NGO actions rovide support to small P business

olster healthcare systems B in Guinea and Côte d’Ivoire Mobilize French expertise to fight epidemics Reduce the effects of the crisis on the region

Means inance a Pasteur Institute F Center of Excellence in Guinea Finance Ebola treatment centers in Guinea Support the Ivorian government’s Ebola response plan

Mali CONFLICT

Objectives upport economic S development in rural areas Enhance economic opportunities for young people I mprove the quality and affordability of basic public services

Means und an NGO healthcare F programme in Northern Mali Accelerate financing procedures Mobilize the logistics skills of the French Army

romote economic P recovery and job creation Bolster youth employment Reduce the effects psychosocial trauma

Means

Palestinian Territories/Gaza CONFLICT

Objectives ebuild basic-services R infrastructure Provide psychosocial support to residents

Means

ebt-reduction and D development contracts (C2D) Fund NGO actions Delegate funds to the European Commission (ECHO)

und NGOs F Contribute to World Bank-managed multi-donor trust funds

Central African Republic

Syria

CONFLICT

Objectives uild institutional B capacities Meet populations’ basic needs for water, food, healthcare Create jobs for unemployed youth

Means Finance highly labor-intensive projects Fund NGO actions Contribute to the multidonor “Bêkou” Trust Fund

CONFLICT

Objectives educe tensions between R refugees and their hosts in Lebanon and Jordan

Means rovide aid to Lebanese P and Jordanian cities for training, awarenessbuilding, and facilities construction Reduce refugees’ traumatic suffering Fund NGOs and local nonprofits

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New forms and providers of international development cooperation

n recent years, the forms and providers of foreign aid have changed significantly.

Alongside traditional development providers – donors such as the United Nations, World Bank, European Commission, and bilateral or regional development banks and agencies, or nongovernmental organizations and diasporas – new providers have appeared and grown into strong actors.

They include emerging countries, foundations, multinationals, local governments, and transversal funds.

The amount of available public development-aid funding cannot match the scope of the challenges on its own; public donors therefore must work more closely with new funding providers, particularly private-sector financiers. This collaboration takes shape in project cofinancing that

aims for enhanced, cascading impacts. It also emerges from coordination, consultation, and dialogue about shared interests and concerns.

Bilateral, multilateral, and regional donors have surpassed their role as financiers to embrace leadership —, cheerleading innovation and catalyzing funding as they jointly construct new modes of cooperation. These donors can afford risks, and cover the extra costs of some projects, the better to encourage adoption of more sustainable models. Cooperative coalitions and alliances are hard to create, implement, and maintain over the long term, but they have proven capable of generating innovation and expanding in scale.

At the same time, the international community has worked to eradicate poverty by reaching the Millennium Development Goals, and

Sri Lanka: Nuwara Eliya district municipal school.

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to fight climate disruption. Those efforts converge in the definition of Sustainable Development Goals, to be adopted in a meeting of the United Nations General Assembly in September 2015. This convergence of all national agendas represents important progress toward a shared vision of economic, social, and environmental development. It provides some chance of meeting the greatest international challenges and of guaranteeing dignified lives for a projected nine billion individuals, all living on a planet of finite resources and accelerating climatic change.

This recasting of the international foreign-aid framework and the appearance of new development providers prompts constant updates in AFD’s modes of operation. The Agency seeks to work with the most appropriate partners – other development banks, local funders and governments, and others – to solve whatever problem is at hand. AFD proposes effective solutions for climate-smart development; it mobilizes operational expertise, knowledge and research as much as it does financing. The changes in the world of cooperation also mean that AFD must foster more innovation to create new development models; it must coordinate varied development actors while attending to aid beneficiary expectations and deepening local stakeholder engagement in projects.

Conceiving, financing and assisting development FD takes a comprehensive approach to new international aid challenges.

It works in three complementary directions simultaneously, pursuing its traditional activity of financing development projects, sharing expertise that increases their efficiency, and – more recently – creating knowledge as a vital complement to its financing work.

825

new financing commitments

Financing beneficiaries

AFD

Central and local governments, companies, NGOs

provides project financing

1/

Project idea

2/

Proposal analysis

3/

Project feasibility study

4/

Feasibility study and financing application analysis

Most often done by an external design or engineering office.

5/ 6/

Analysis of each project’s economic, social and environmental effects and its fit with French aid policy, financing plans and anti-corruption safeguards.

Negotiation of financing terms and conditions

7/

Financing application made to AFD

AFD decision to approve financing application

825 new financing commitments €8.1 billion

8/

Sign loan, grant, or other financing contract

9/

Project execution

10 /

755 contracts signed for €6.2 billion

9/

Funds disbursement

€5.1 billion disbursed

Repayment of loan to AFD (if credit financed)

€23.9 billion of outstanding loans in 2014

11 /

30 post-project evaluations

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Conference on inequalities in the French Overseas Provinces.

Sharing experiences and disseminating French savoir-faire The results of AFD-funded projects depend in large measure on the initiative and guidance of local aid beneficiaries and their appropriation of the works created. Thus capacity-building serves as a common objective for all projects.

Capacity-building aims to strengthen individual skills and competencies in conceptualizing, designing, implementing and evaluating projects. It also aims to improve organizational function and to structure public policy.

The sharing of savoir-faire, or know-how, takes various forms, such as consultancy services for a limited, short, medium, or long period, or providing training and networking opportunities to those working in development.

Working in this vein, Cefeb, AFD’s business university in Marseille, organized about 40 seminars in 2014 on public-private partnerships, project management, and inclusive finance, among other topics. The seminars disseminated knowledge, served as a forum for sharing French experience and expertise, and provided development practitioners an opportunity to connect with one another. Through these events, Cefeb helped nearly 1,500 executives, primarily from Africa and Southeast Asia, to build their competencies. Their posts spanned ministries and public institutions, financial institutions, nongovernmental organizations, and public and private enterprise. Cefeb provided graduate-level courses for a Masters of Public Works Administration to about 40 young professionals, in conjunction with the University of Auvergne. Cefeb also expanded its online course offerings.

Reviewing good practices in fragile states In countries afflicted by political, security, or institutional hardships — such as poor governance, armed conflicts, and inadequate financial, technical or human resources — AFD’s local partners find difficulties in smooth project operation. Some projects confront a lack of planning or needs identification, coordination problems, poor management and oversight, deficient infrastructure maintenance, or other issues. Each and every day, AFD teams must think about the best ways to surmount or compensate for these problems. The Agency’s Capacity-Building Support Department has reviewed field reports and identified proven solutions from more than 50 projects, and published them in a catalogue available to all AFD employees.

Deepening technical cooperation between France and emerging countries In 2014, AFD financed 14 technical cooperation operations with €6.4 million, in response to requests for French expertise from several middle-income and emerging countries. These requests benefited from the 2014 inauguration of the Fund for Exchanging Technical Expertise and Experience (FEXTE). AFD deployed the know-how of French local and regional administrations, public authorities, and private-sector companies (following a competitive tender), thereby initiating or bolstering technical cooperation.

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17

Cyrille Bellier

Head of AFD Research and Development Department

Ideas for Development (ID4D) Conferences, addressing women’s economic empowerment, the transition to a green economy, social protections in Latin America, and other topics.

Discussions can be found on http://ideas4development.org —

INTERVIEW

Understanding the dynamics of social change At AFD, what is the relationship between knowledge creation and financing activity?

AFD develops expertise as part of its project financing and implementation assistance. The Agency seeks to provide answers to the many questions that arise in the field. We still have gaps in knowledge about intervention situations and development policy effectiveness.

Our mission is to conceptualize, guide and participate in research and study programs on development policy.

The knowledge we gain allows us to improve our local or global policy recommendations and better understand situations as they arise.

We work to bridge the divide between academics and practitioners. We help the latter identify research questions related to issues and situations that they encounter during operations, and we take care to ensure that our commissioned research provides real answers.

Our partners include French research institutes, such as IRD, CIRAD, CERDI, CNRS, and foreign ones, such as MIT, SOAS, Ethiopia’s EDRI, Mexico’s INECC, Vietnam’s ASSV, among others.

Whether through studies, research, evaluations, or macroeconomic analyses, our mission requires us to provide new answers to concrete questions.

Sometimes, identifying new approaches means that we must change perceptions, the lenses that we use to look at reality. Disseminating this knowledge is essential. With this in mind, our 2014 research resulted in publications targeting decision-makers, researchers, and practitioners; we also shared it during several colloquia. We also strive to teach and train – that is the essence of Cefeb, our business university.

Climate-smart development is a structuring directive for AFD. How does it manifest in research programs?

In several ways. For example, we work with the AFD Transport and Energy team to model low-carbon growth trajectories; we test the impact of various public policies on climate and economic growth in emerging countries, such as China, Indonesia, Mexico and South Africa. We also do this at the scale of cities; our first such study looked at Bogotá. The research showed the strong link in China between pollution – a real public-health issue – and the fight against climate change. This strong correlation, specific to China, prompted its government to make a stronger commitment to fighting climate disruption.

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project evaluations and 12 other assessments —

64

scientific publications, available on a new site: http://librairie.afd.fr

AFD collaborates with CDC Climate Research, particularly on climate finance. We also study urban sprawl, density, and morphology. For example, increasing urban density through lowered property and housing costs could complement the effects of a carbon tax. We also look at energy — access, efficiency, “decarbonized” production — and its vital role in growth. After a 2015 AFD-Proparco-EUDN conference on the subject, we will launch an “Energy-ClimateDevelopment” conference series to discuss these issues.

What is your current thinking about economic development as a vector of social progress?

Research has shown that we certainly cannot eradicate extreme poverty without addressing inequalities.

Another example: drawing on Amatyra Sen’s capability approach, we try to measure social ties, particularly by designing alternative indicators of development quality.

Ultimately, this work should improve policies aiming to promote social cohesion. We have another program that will probe gender inequality in hiring and social housing access in France’s overseas provinces. Much work remains unfinished in improving institutional quality, especially that of public-service authorities.

We explore many other subjects: the stakes involved in providing social protections in developing and emerging countries; managing common goods such as groundwater; measuring the impact of the digital economy on development; managing waste; expanding secondary education, and examining links between culture, religion and development. We also need further study on innovation, demographic trends in Africa, crisis-affected countries, and other subjects. One new frontier is the convergence of environmental and social agendas within the development community.

This variety of subjects and our multidisciplinary teams contribute much that enriches our financing activity.

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45

Partnership and innovation Nabila Haddad Project Manager, AFD Beirut office

INTERVIEW inancing, knowledge-sharing, and knowledge creation take place in a constantly changing world amidst a fragmented aid landscape.

They cannot flourish unless their practitioners follow two cardinal rules: openness and innovation. AFD embraces this openness, partnering with all who contribute to international cooperation efforts, while heeding the expectations of its aid beneficiaries – the central tenets of its methodology. AFD also embraces innovation; the Agency constantly seeks to improve its processes and tools, the better to rise to new development-aid challenges and broaden its effectiveness.

Paying attention to aid beneficiaries and local issues AFD’s 72 field offices around the world allow it to truly comprehend local issues and facilitate dialogue with local project managers. AFD has thus gained real-world experience in several areas — familiarity with natural landscapes, the particularities of local agriculture, or the institutional, tribal and social organization of institutions: issues affecting health and education, among other priorities. AFD’s local presence also favors governmental efforts to incorporate Agency actions into comprehensive territorial development. With this in mind, AFD helps public administrators in defining policy, and assists local governments in gaining autonomy from their central authorities.

“Taking part in a project isn’t just about financing it – it’s a real partnership.”

How do you help your Lebanese interlocutors in meeting their development challenges?

Working in a field office, we are the first point of contact for our Lebanese beneficiaries; we stay in continuous touch with them. For public sector projects, we work with the Development and Reconstruction Council (DRC), which represents the Lebanese government in all donor-financed projects. The DRC fills an institutional void on behalf the government, ensuring political continuity and telling us what the ministries need. Through this constant dialogue, we have received requests, and sometimes we make suggestions based on our expertise. We are very open to discussion and transparent about our procedures and operations, which allows us to create trusting relationships. Over time, I have genuinely felt that mutual trust build and strengthen. Taking part in a project isn’t just about financing it – it’s a real partnership: in tandem with our beneficiaries, we think about the best way to do a project to ensure its success.

As a locally-born employee, how do you contribute to this dialogue?

I am Lebanese; I joined AFD in 2008, after several years of working in banking in Lebanon. We locallyborn employees sometimes act as intermediaries and facilitators because we are culturally closer to our interlocutors. Our mastery of the language also facilitates conversations. I also feel a responsibility to my country to increase awareness, among my colleagues and at AFD, about problems or issues that they might otherwise not notice or understand.

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A NNUA L R EP O RT 2 01 4

“Our relationship with French civil society organizations working internationally takes many forms. In the developing world, we finance fieldwork. In developed countries, we help to structure the nonprofit world, and aid its efforts to raise awareness and educate the public about international development and solidarity. The independence and freedom of expression that civil society organizations enjoy play a constructive role by pushing us to question our practices and thinking.”

— Jacques Moineville, AFD Deputy Chief Executive

What did AFD do in 2014 in Lebanon?

Working with all parties in international cooperation

Lebanon faces an influx of 1.5 million Syrian war refugees, and must host them in a country whose own population numbers four million. Lebanon also suffers frequent institutional gaps that impede political decision-making. In an effort to tackle these challenges, AFD contributes to the Lebanon Syrian Crisis Trust Fund, managed by the World Bank. The fund finances Syrian refugee camps and basic service provision. AFD also works through its Lebanon-Jordon NGO Funding Facility, supporting projects designed to improve living conditions for refugees and their hosts. The Agency also aims to diversify its financing, deploying non-sovereign loans (for example) to finance social service projects.

In a multi-actor world, the relevance of AFD actions depends on its ability to work within a network of development practitioners and stakeholders.

P U B L I C AT I O N June 2014

w

Joint Evaluation

Agence Française de Développement / Japan International Cooperation Agency

assess the relevance of the support provided by AFD and JICA, and to loans has allowed Indonesia to effectively develop and implement a lenges of climate change. The evaluation concerned the totality of Donors: the financial loan, the technical assistance to implement the framework offered for a policy dialogue

rns the conclusions of this exercise and proposes recommendations

te Professor, Paris Dauphine University, UMR LEDa-DIAL Paris Dauphine University, UMR LEDa-DIAL

RTHAUX, Evaluation Unit, AFD uation Unit, JICA

Republic of Indonesia Climate Change: Programme Loan 2008-2010 / June 2014 /

Développement (AFD) / ooperation Agency (JICA)

ovative: in its purpose – the CCPL, pioneer of a new type of financing to its partnership approach – first joint evaluation with JICA, and in its ting it to climate loans) by the methodological approach for evaluating by the Development Assistance Committee of the OECD. It involves a aluation of the intervention logic of the loan; ii) evaluation of the results tegy in the domain of climate change; iii) scrutiny of the causal links ed and the results of the Government’s strategy.

150 More than

€1.7

PARTNERSHIPS

te Change Programme Loan (ICCPL)

2009 and 2010, JICA and AFD approved a series of “climate” budget loans ment in order to facilitate the design and implementation of an ambitious imate change (CC), supported by a high-level policy dialogue. This ex post d by the AFD and JICA evaluation departments and was jointly managed, e terms of reference, the recruitment of the consulting team, the discussion tion methodology to the validation of the final report.

For large-scale infrastructure projects that no donor can finance alone,

AFD commits to cofinancing agreements, joining with the European Commission, bilateral aid agencies, emerging funders, development finance institutions, and/or foundations. AFD also funds French nongovernmental organizations and regional governments engaged in development activities, and also maintains discussions with private-sector companies.

Indonesia Climate Change Programme Loan (ICCPL) Marc RAFFINOT, Associate Professor, Paris Dauphine University, UMR LEDa-DIAL Anda DAVID, Economist, Paris Dauphine University, UMR LEDa-DIAL

Joint evaluation of Japanese cooperation on the Indonesia Climate Plan, as financed

by Japan and France

with international donors, the United Nations, French regional governments and NGOs, companies, foundations, and think tanks, including 35 new ones.

€720

BILLION

committed by AFD to cofinancing agreements (+70% compared to 2009).

MILLION

delegated from the European Union to AFD in 2008-2014.

+19% GRANTS

for NGOs, with €58 million dedicated to 81 projects conducted by 58 NGOs. 82% of the funding finances field operations and 18% goes to development-education initiatives and creation of procedural standards for French nonprofits.

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Jean-François Arnal AFD Interest Representative to the European Union

INTERVIEW

“The added value of collective actions exceeds the sum of individual added values” The European Union adopted a new 2014-2020 development-policy financial framework.

What are its main features?

More than 18 months of negotiations resulted in an agreement giving a larger role to the European Parliament, ensuring a better hearing for citizen voices. While the foreign aid budget remained the same, the new financial framework invokes the three-sector principle — that is, concentrating actions in each recipient country in three sectors, with 20% of the funding targeting social services. This has led AFD to revise some of its intervention sectors in order to optimize complementarity. In addition, 20% of funding is earmarked for climate-smart projects, an imperative that reflects AFD proactivity in climatefriendly development.

The agreement extends the 2012 Program for Change, emphasizing private-sector involvement in development through financing innovations, such as blending grant and loan funding. This framework anchors our relationship with the European Union.

The budget allocated to blended grants and loans represents only 4% of foreign aid, but it has doubled in volume, going from a little less than €2 billion between 2007-2013 to more than €3.5 billion for 2014-2020. That increase creates many opportunities for AFD to operate alongside the European Commission.

Why did AFD and the European Commission augment their grant-loan blending?

Its leverage effect is strong: one euro of European grant monies raises ten euros in lending from public development-finance institutions, which in turn, generates €22 of investment in the field. This one-euro grant allows us, for example, to fund environmentally and socially supportive activities that projects would otherwise not include. The blending instrument therefore also catalyzes good practices.

At present, only public-development finance institutions may access blended funds, and use them only for certain beneficiaries – public enterprises, banks, or private enterprises with a public-service mission. But in the future, European development institutions specializing in private-sector finance will become eligible for blended funding, and may use it to finance private enterprise. This will support publicprivate partnerships in turn, and lead to greater private sector involvement in development finance.

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The Bêkou Trust Fund for the Central African Republic is the first multi-donor fund managed by the European Commission.

How does it constitute progress for European aid?

The European Commission may now manage multidonor funds because of new 2012 financial regulations.

France, Germany and the Netherlands all participate in the Bêkou Trust Fund.

The fund was inaugurated in July 2014, so it is too early to predict its success. It does carry hope, which is what “bêkou” means in the Sango language. We hope that the fund will provide proof of European effectiveness in financing development. While we have tended to intervene in a scattershot way during the post-crisis period, the fund will catalyze our efforts and improve the division of labor, with much sharper geographic and sectoral allocations of responsibility. The added value of collective action exceeds the sum of individual added values. That is the spirit of European development aid.

With the central government ceasing to function in the Central African Republic, we relied on initiatives led by NGOs and local administrations, among others. As the government authorities grow stronger, we will have backing from higher-level representatives of the people.

The year 2014 saw a fortification of European development aid. How can we make it even stronger?

Bilateral European donors work jointly with the European Commission; by bolstering this partnership, we improve the position of European aid in the post2015 context. The Commission also represents political interests, while bilateral donors have a better mastery of financial tools, such as loans and credit guarantees; these status differences result in different modes of operation, which in turn may produce power struggles over the definition and implementation of development projects. We must ignore these differences, which cause tension and ineffectiveness, and join forces in the service of our beneficiary countries. Only then may we claim collective — and effective — success.

IDFC: 23 development banks working on innovative financing solutions for climate issues AFD is a founding member of the International Development Finance Club (IDFC), a worldwide network of 23 national, regional, and international development banks. The operational synergies that AFD has created with other member-banks help create innovative, climate-smart financing solutions.

In 2014, IDFC members provided US$87 billion to finance activities that help fight climate change and its effects.

In anticipation of the 2015 Paris Climate Summit, IDFC has worked on harmonizing its members’ tools, methodologies, and practices, the better to address climate concerns in financing development projects.

In light of the stakes, and the sheer volume of funding needing rapid deployment, traditional international donors will need to enlist private-sector sources of financing — banks, institutional investors, insurers, pension funds, and other resources.

P U B L I C AT I O N Collaboration between AFD and other donors, development practitioners, public institutions, and academia reinforces the Agency’s effectiveness in the field, as shown in its financial support for public policies and responses to requests for French expertise. Collaboration expands capacity in other ways: the Agency also encourages networking between specialists in emerging and developing countries and those in France, makes use of decentralized cooperation or paired projects, and works with NGOs and other entities.

Taking advantage of the digital revolution to enhance African education

Savoirs communs n°17

Digital Services for Education in Africa

Agence Française de Développement, Agence universitaire de la Francophonie, Orange & UNESCO

Innovation in the name of impact The new challenges facing development assistance require innovative solutions. Whether technical, financial, or methodological, innovation innovation serves to multiply the effectiveness of development aid. Innovation is central to the AFD mission, a constant search for the most suitable financial tools and an exploration of new themes — the inclusive social economy, microfinance, mezzanine finance, agroecology, and social protections, to name a few.

AFD finances projects utilizing the latest technology: satellite surveillance to combat deforestation in the Congo Basin, or experimentation with digital-course offerings on

tablets in Niger secondary schools.

The Agency also funds studies of promising technologies.

In addition, AFD innovates through its partnerships with local governments and nongovernmental organizations.

Their joint experience may provide precise answers to development questions. We see this in AFD support for the Red Cross in the Central African Republic, where healthcare services needs rebuilding; or in AFD support for Brittany in Burkina Faso, collaborating on truck farm and produce market operations. Through Fisong, a funding facility for NGOs and innovation, AFD finances NGOled breakthrough projects in priority

sectors, thus promoting synergies as well as discussion of shared interests.

In 2014, AFD dedicated €5 million to seven nongovernmental organizations; their funded projects use information and communication technologies to assist micro-, small and medium-sized companies, and to improve healthcare access for mothers and children.

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Democratic Republic of the Congo: A Congo Basin satellite surveillance project fights deforestation.

Financing innovative social entrepreneurs

AFD has modified the way it works in crisis-affected and post-crisis countries, adapting to difficult situations that call for timely intervention and speedy action. The Agency has also considered internal reorganization to improve project monitoring during the execution phase.

AFD’s financial engineers strategize about how to use innovative financing mechanisms, such as social impact investment funds or participation loans made by several lenders to one borrower, the better to facilitate the transition to green and/or more equitable economies. Meanwhile, AFD operations and technology experts consider how best to apply technological innovations, such as big data, mobile banking, and online health or agricultural services, in order to boost project effectiveness and efficiency.

Mali: Nurse using a smart-phone app during a child’s physical examination.

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Social enterprises make a positive contribution to local, regional, and national development through their economic impacts: job creation, tax revenue generation, new technologies usage, and local-supplier and producer sales, among other effects. And, as their name implies, social enterprises also have positive social and/or environmental impacts, given their stress on innovation and enhanced access to basic needs — energy, healthcare, and financial services, especially for the poorest.

AFD has invested in the Essential Capital Consortium, a social impact fund created by Deutsche Bank, with a view to filling existing capital gaps for growing social enterprises. This marks the first time that AFD has contributed to a social impact fund; it acts, in fact, as one of its principle investors, having given US$8 million out of US$50 million total.

The fund provides loans to social enterprises working in developing and emerging countries in the energy, health and financial service sectors. Such companies provide good and services that improve the lives of the poor — for example, low-cost individual solar energy generators, clean-cook stoves, drug authentication systems, or low-cost ambulance services.

AFD

Team

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51

Board of Governors Members as of 1 March 2015

Laurence TUBIANA Chairwoman INCUMBENT

Special Representative to the COP21 Conference Ambassador for Climate Change Negotiations

ALTERNATE

MINISTRY OF FINANCE AND PUBLIC ACCOUNTS Anthony REQUIN

Arnaud BUISSÉ

Division Head for Multilateral and Development Affairs Treasury Directorate

Vice Director for Multilateral Financial and Development Affairs Treasury Directorate

Alexandre KOUTCHOUK

Thomas KURKDJIAN

7 th Vice Director of National Budget Office

Office Head of Foreign Affairs and Development Aid Budget Directorate

INCUMBENT

EXTERNAL EXPERTS Appointed by the Ministries of Finance and Public Accounts; Foreign Affairs and International Development; Overseas Provinces; and the Interior

Omar KABBAJ

Jean-Louis MATTÉI

Advisor to His Majesty The King of Morocco

Chairman of the Supervisory Board for Société Genérale’s Moroccan subsidiary

Sylviane JEANNENEYGUILLAUMONT

Guy DUPONT

Professor Emeritus at the University of Auvergne and CERDI Researcher

MINISTRY OF FOREIGN AFFAIRS AND INTERNATIONAL DEVELOPMENT Anne-Marie DESCÔTES

Frédéric BONTEMS

Director Globalization, Development & Partnerships

Director Development and Global Public Goods

Véronique VOULAND-ANEINI

Ludovic POUILLE

Deputy Director Africa and the Indian Ocean

Deputy Director Middle East and North Africa

MINISTRY OF THE FRENCH OVERSEAS PROVINCES Thomas DEGOS

Marc DEL GRANDE

Director and Prefect French Overseas Provinces Directorate

Vice Director of the Public Policy Office French Overseas Provinces Directorate

ALTERNATE

Honorary Chairman of the Federation of Overseas Enterprises

Adeline LESCANNE-GAUTIER

Christine HEURAUX

Chief Executive of Nutriset

Representative from CIAN

Jean-Louis VIELAJUS

Cécile RENOUARD

Chairman of Coordination SUD

Researcher and CoDev Program Director, ESSEC

Appointed by the Ministry of Ecology, Sustainable Development and Energy

Pierre RADANNE

Marc-Antoine MARTIN

Chairman of the Dossiers and Debates for Sustainable Development nonprofit organization Chairman of the CLIP

Honorary General Engineer of Bridge, Water and Forest Works

PARLIAMENTARIANS Representatives appointed by the National Assembly Chairman

MINISTRY OF THE INTERIOR Luc DEREPAS

Marie MASDUPUY

Director Foreigners in France Directorate

Division Head Strategy and International Affairs Foreigners in France Directorate

Michel DESTOT

Stéphane DEMILLY

Isère Representative

Somme Representative

Noël MAMÈRE

Jean-Marie TETART

Gironde Representative

Yvelines Representative

Senators appointed by the Senate Chairman Government Commissioner: Claude WARNET

Yvon COLLIN

Fabienne KELLER

Tarn and Garonne Senator

Bas Rhin Senator

Henri de RAINCOURT

—

Yonne Senator

ELECTED AFD EMPLOYEE REPRESENTATIVES

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A NNUA L R EP O RT 2 01 4

Jérémie DAUSSIN-CHARPANTIER

Anne-Laure ULLMANN

Hatem CHAKROUN

François PACQUEMENT

AFD Group operating structure See the organizational chart at www.afd.fr Ethical Advisor

Board of Directors Proparco

Inspector General Audit, investigation and evaluation of financing activity, risk exposures, procedural compliance and management efficiency and effectiveness

Subsidiary dedicated to private sector financing

Board Secretariat

Executive Offices

Preparation and follow-up for Board of Directors and Special Committee Meetings

Operations

Research and Knowledge Management

Strategy, Partnerships and External Affairs

Administration

Human Resources

Risk

Development-project financing proposal evaluation and project-execution oversight

Development-related knowledge creation and international debate participation

Strategic steering and external communication

Internal financial, budgetary, legal, logistical, organizational and informational operations

Recruiting, training, personnel management and career development

Group-wide risk prevention, mitigation and management

Research and Development

Government and External Affairs

Finance and Accounting

Knowledge Management and Dissemination

Communication

Recruitment and Career Management

Internal Audit and Compliance

Continuous Training and Workforce Development

Disbursements Control

Sub-Saharan Africa Middle East and North Africa French Overseas Provinces Asia and the Pacific Latin America and the Caribbean AFD Network AFD Field Offices

Human Development Education, Training and Employment Health and Social Protections

Sustainable Development Walter and Sanitation Transportation and Sustainable Energy Agriculture, Rural Development and Biodiversity

Banks, Enterprises and Local Authorities Urban Development and Local Authorities Financial Institutions and Private Sector Development Structured Finance Non-Sovereign Loan Monitoring Credit Guarantees

Multidisciplinary Support Financing operations across regions and sectors Climate Change

Evaluation and Capitalization Macro-economic and Country-risk Analysis

Cefeb Business University (Marseille) Administration and Communication Training

Strategic Steering and Accountability Aid Agenda and International Partnerships NGO Partnerships Brussels Liaison

Financial Strategy and Steering Accounting and Bookkeeping Back Office Credit and Market Operations Financial Communication

Legal Support for Foreign Operations

French Global Environment Facility Secretariat Government-funded financing for climate and biodiversity preservation projects

Support for Overseas Provinces Operations and Other Legal Services

IT, Buildings and Logistics Business Support

Administration and Remuneration Benefits and Employee Management Union and Employee Relations

Group-wide Risk Management Risk Monitoring Credit Risk Analysis Second Opinion Function

Opinion about projects given independently from Operations Department

Assistance for Business Ownerâ&#x20AC;&#x2122;s Changes Software Programming and Life-cycle Management Cross-functional Operations Steering Buildings and Logistics Management Urbanization, Architecture and Techniques Security and Safety Unit

Budget and Management Audit Business Efficiency Unit Procurement

Social and Environmental Support Capacity-Building Support Procurement Support Crisis and Conflicts Unit

afd tea m

53

Management team Members as of 15 April 2015

AFD Group Executive Officers Anne PAUGAM *

PROPARCO

Jacques MOINEVILLE *

Chief Executive Officer

Deputy Chief Executive

Claude PÉRIOU *

Chief Executive Officer

Didier MERCIER

Chief Inspector General

Amaury MULLIEZ

Chief Executive delegated to Operations

François KERHUEL Chief Ethics Officer

Sandrine BOUCHER

Chief Executive delegated to Administration

Executive Offices Operations

Research and Knowledge Management

Strategy, Partnerships and External Affairs

Administration

Human Resources

Risk

Jean-Marc GRAVELLINI *

Gaël GIRAUD *

Chief Operating Officer

Chief Knowledge Officer and Economist

Philippe ORLIANGE *

Colette GROSSET *

Christine HARNÉ *

Grégory CLÉMENTE *

Chief Strategy, Partnerships and External Affairs Officer

Chief Administrative Officer

Chief Human Resources Officer

Chief Risk Officer

Bertrand LOISEAU

Bernard ESNOUF

Interim Deputy

Deputy

Department Directors

Marc DUBERNET Deputy

Department Directors Jean-Pierre MARCELLI

Marie-Pierre NICOLLET

Sub-Saharan Africa

Human Development

Marie-Hélène LOISON

Laurence BRETON-MOYET

Middle East and North Africa

Sustainable Development

Fabrice RICHY

Odile LAPIERRE

French Overseas Provinces

Banks, Enterprises and Local Authorities

Pascal PACAUT Asia and the Pacific

André POUILLESDUPLAIX

Régis MARODON

Multidisciplinary Support

Latin America and the Caribbean

Department Director Roger GOUDIARD Cefeb

French Global Environment Facility (FGEF) François-Xavier DUPORGE Administrator

Department Director

Philippe BAUDUIN

Marianne SIVIGNONLECOURT

Finance and Accounting

Internal Audit and Compliance

Pénélope DUTET

—

Legal

Group-wide Risk Management Department

Jean-Christophe PECRESSE IT, Buildings and Logistics Systems Suzanne PRADA Budget and Management Audit

*Executive Committee member

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55

Working for AFD AFD maintains 72 field offices and bureaus around the world, including one in Brussels. Fully 40% of its 1,787 employees work in foreign countries and the French Overseas Provinces. This allows the Agency to ground its actions in local realities and have an in-depth understanding of stakeholders, needs, and constraints.

AFD Group Workforce

715

In 2014 1,219

Employees hired in mainland France Employees hired in foreign countries and the French Overseas Provinces

568 8

1,787

Total employees

Work in-country at an AFD field office or bureau

International volunteers

* The Reserve Banks act in the name of and on behalf of the Banque de France, under its authority. They operate as central banks in the French Overseas Provinces.

However, their employees come under the economic and social unit, AFD/Reserve Banks.

French Overseas Provinces

Latin America and the Caribbean

106

(AFD Group and Reserve Banks)

Offices

17%

7%

355

Employees of Reserve Banks*

9

Offices

14

Offices

Brussels bureau

72

16% Asia and the Pacific

Offices

Offices

12% Middle East and North Africa

rs 2014 e b um YOUTH EMPLOYMENT

30%

under 30 years old

MALE-FEMALE RATIO

52.6% women

AVERAGE AGE

45 years old INTERNAL MOBILITY

218 employees

of which 33% transferred between headquarters and a field office 56

A NNUA L R EP O RT 2 01 4

106 international volunteers 137 interns 23

work-study and on-the-job training contracts

Offices

48% Sub-Saharan Africa

10

n y Ke

30

RECRUITMENT

163

new hires (89 hired in metropolitan France and 74 in foreign countries and the French Overseas Provinces) TRAINING BUDGET

3.93%

of gross salaries

At AFD, many kinds of professionals contribute to international development and solidarity. They tell their stories here.

“I serve as a relay between the field offices and Paris headquarters.”

Céline Thoniard Regional coordinator Benin and Ghana I am responsible for coordinating AFD’s work in Benin and Ghana; I serve as a relay between the field offices, Paris headquarters, and the ministries that oversee the Agency. My tasks include managing, supporting, and guiding the activities of these two offices, ensuring that they remain in synch with AFD’s operational and financial means and countryspecific intervention strategies. I supervise proposed-project inquiries and funded-project implementation throughout the project life-cycle. I also help the field offices communicate with headquar-

“My current field office work gives me a new perspective, allowing me to deepen strong relationships over time with local partners and aid beneficiaries.”

Carl Bernadac Mission Manager, AFD Bogotá office I identify and monitor projects that we finance in Colombia. I assist the director, supervising a team of four project managers, while working to get a new office and projects off the ground in Ecuador, a new operating country for AFD. We signed an intergovernmental agreement to formalize AFD’s entry into Ecuador, and have already

“AFD aligns with my values.”

Océane Puech Urbanization Information Systems Architect As an “urbanization” IS architect, I work on project-related information systems architecture, including, for example, job and human-resource skills forecasting. We help project managers acquire a global view of the information system so as to maintain its consistency throughout. We work in the same way as urban planners do, overseeing “cities” to ensure that they function well and that existing and new elements work together harmoniously.

ters. In 2014, for example, we financed a project in Benin that aimed to increase secondary school access (particularly for girls), while also fighting discrimination and improving teaching quality.

In particular, I assist in finding new projects, defining AFD’s intervention strategy in Benin and Ghana, and keeping the local offices and headquarters apprised of the political and economic situation in these countries.

Within the Africa department, I also work with our partners on cofinancing projects and other forms of cooperation, notably with the World Bank and several non-European donors, such as Japan, China, Kuwait, Qatar, and others.

As a professional regional coordinator, I acquire a very broad and long-term view of a country’s situation. We become well-placed observers of their evolution, development dynamics, and political and economic choices. We try to match their choices with France’s cooperation directives.

investigated two funding applications from Ecuadorian aid beneficiaries. One project will assist in expanding the electricity sector as part of an ambitious plan to transition to clean energy. The second is for water and sanitation, financed in partnership with Colombia’s national development bank.

This expansion will lead us to innovate and reorganize. We have to think about how to share back-office functions, such as budgeting and accounting, among the four Andean countries in which we operate. We will also look more closely at how we can manage exchange-rate risk and cover counterparty risk.

After six years in a nongovernmental organization, living in the communities that we served, and then a move to AFD headquarters in 2004, my current field office work gives me a new perspective, and allows me to deepen strong relationships over time with local partners and aid beneficiaries.

When we work on the “urbanization” of an information system, we step back and observe it in its entirety to identify modules needing improvement.

AFD aligns with my values, which is why I decided to work there.

For me, it is very important to help developing countries by adapting to their culture and their know-how, without imposing our own model. Many people who work for AFD support good causes – that is an integral part of the organization’s culture. Personally, I went on a three-week humanitarian mission to Dehradun, in India.

Ultimately, my profession at AFD, even though I work with computers, allows me to help in the field. We make it easier for the others to work so that they can be as effective as possible without having to worry about computers or software.

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AFD’s International reach AFD maintains a worldwide network of 72 field offices and bureaus.

Asia and the Pacific Middle East and North Africa Algeria

Tunisia

Egypt

Turkey

Jordan Lebanon

Afghanistan

Indonesia

Bangladesh

Laos PDR

Cambodia

Myanmar

Also overseen by India office

Yemen

Also overseen

by Djibouti office

Liaison with European institutions Brussels

Morocco

Also overseen by Cambodia office

China

Also overseen by Thailand office

India

Pakistan

Also oversees: Maldives

Palestinian Territories

Philippines Sri Lanka

Also overseen by India office

Thailand Vietnam

Field office or bureau Beneficiary country

Latin America and the Caribbean Brazil Colombia

Also oversees: Ecuador

Dominican Republic Haiti

Sub-Saharan Africa

Mexico Peru Also oversees: Bolivia

Suriname

Also overseen by French Guiana office

Benin

Djibouti

Burkina Faso

Ethiopia

Burundi

Also overseen by Kenya office

Cameroon

French Overseas Provinces French Guiana

Also oversees: Brazil (Amapá), Guyana, Suriname

Also oversees: South Pacific Island Nations, Vanuatu

French Polynesia

Reunion

Guadeloupe Martinique

Also oversees: Barbados, Lesser Antilles, Trinidad and Tobago

Mayotte

58

New Caledonia

A NNUA L R EP O RT 2 01 4

Also oversees: French Southern and Antarctic Territories

Saint Pierre and Miquelon Wallis and Futuna Also overseen by New Caledonia office

Also oversees: Equatorial Guinea

Central African Republic

Also oversees: Eritrea, Somalia, South Sudan, Sudan

Gabon

Also oversees: Sao Tomé and Principe

Ghana Guinea

Also overseen by Cameroon office

Also oversees: Sierra Leone

Chad

Also oversees: Rwanda

Kenya

Comoros

Madagascar

Congo (Democratic Rep.)

Mali

Congo (Republic of the)

Also oversees: Seychelles

Côte d’Ivoire

Mauritius

Mozambique

Also oversees: Swaziland

Niger Nigeria Senegal

Also oversees: Cape Verde, Guinea Bissau, The Gambia

South Africa

Also oversees: Botswana, Lesotho, Malawi, Namibia, Zambia, Zimbabwe

Tanzania Also overseen by Kenya office

Togo Uganda Also overseen by Kenya office

Mauritania

Also oversees: Liberia

Contact details and information about the operations of each office and bureau may be found on www.afd.fr A neighboring AFD office or AFD headquarters in Paris oversees operations in countries without a field office or bureau.

Financial Information

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Financial statements A view of the AFD Group’s (AFD and Proparco) financial standing as of 31 December 2014.

The complete 2014 AFD Group financial report is available in the Registration Document, which can be downloaded from www.afd.fr Rounding may cause totals to vary slightly from an item-by-item addition.

Balance Sheet ASSETS (€ million)

2013

2014

LIABILITIES AND CAPITAL (€ million)

2013

2014

Loans (net outstanding)

20,553

23,822

Bonds and borrowings from the market

17,109

19,970

Loans (gross outstanding)

20,848

24,121

-408

-431

113

132

Borrowings from French Treasury

2,630

2,792

201

546

1,858

1,858

Managed funds and advances from French government

640

436

Accruals and other liabilities

1,214

1,639

911

990

2,225

2,280

93

121

26,880

30,633

(-) Allowances for capital and interest impairments (+) Accrued interest

Financial liabilities IMF-PRGF operations*

1,859

1,859

Investment portfolio

689

715

2,356

2,584

478

703

Cash and short-term instruments Equity participations

IMF-PRGF operations*

Provisions Property, plant, equipment and intangible assets

213

214

Capital and Retained earnings

Accruals and other assets

732

736

Net income

26,880

30,633

TOTAL

TOTAL

*PRGF: Poverty Reduction and Growth Facility. IMF: International Monetary Fund

Key ratios and indicators 2012

2013

2014

363

441

449

46.9%

41.8%

41.2%

Net income (€ million)

88

93

121

Dividends paid to French Treasury (€ million)

55

63

37

73.8%

63.6%

63.5%

Net banking income (€ million) Salary costs / Net banking income

Return on equity

Overhead expenses(1)/Net banking income

Return on capital employed

Earnings before interest and tax/Capital employed(2)

5.0%

5.3%

6.7%

Return on assets

Net income/Total assets

0.4%

0.3%

0.4%

(1) Overhead includes depreciation and amortization expenses.

(2) Average debt liabilities and average shareholder’s equity net of provisions for general banking risk (€460 million).

60

A NNUA L R EP O RT 2 01 4

Income Statement 2013

2014

Income (€ million)

2013

2014

955.1

1,087.1

Income earned on loans and guarantees

1,074.4

1,216.5

Interest expense

401.3

436.3

Interest income and commissions on loans and guarantees

569.3

638.3

Swaps expense

535.1

630.8

Swaps income

548.4

627.6

Net allowances for unpaid interest

-5.1

-8.0

Interest income losses

-0.2

-0.1

-47.0

-49.9

9.0

8.7

190.0

191.8

Investment income

51.9

46.3

Income from equity participations

13.4

10.2

Commissions on operations

43.2

45.8

Expenses (€ million)

Borrowings expense

Net allowances for sovereign credits impairments

-6.1

5.7

Net foreign exchange loss (- gain)

Recoveries on subsidy account for SAL* and blended financing (loan+grant)

Income earned on interest rate subsidies

Miscellaneous financial expenses

16.8

15.4

Miscellaneous commissions and income

38.6

39.3

Expenses for IMF-PRGF operations

14.9

16.1

Income from IMF-PRGF operations

15.9

17.2

986.7

1,118.6

Total Banking Income

1,427.4

1,567.2

971.9

1,102.5

Net of IMF-PRGF Operations Income

1,411.5

1,549.9

Total Banking Expenses Net of IMF-PRGF Operations Expenses *SAL: Structural Adjustment Loan

440.7

448.5

General and administrative expenses

265.6

268.6

• Employee compensation and benefits

184.3

184.8

5.0

5.5

76.3

78.3

14.8

16.0

Total operating expenses

280.4

284.6

Gross Operating Income

160.2

163.9

-60.4

-41.0

19.4

-15.2

-80.6

-25.3

Net Banking Income

• Taxes and regulatory fees • Other general and administrative expenses

Net allowances for depreciation of property, plant and equipment and amortization of intangibles

Cost of risk and other credit risk provisions Net allowances for loan impairments Provisions for contingencies and charges

0.9

-0.5

99.9

123.0

2.2

-1.6

Net profit before tax and exceptional items

102.1

121.4

Net income (- loss) from exceptional operations

-9.2

0.0

92.9

121.3

Capital losses on bad debt and loan losses

Gross income from operations Gains or losses on fixed assets

Net Income

FINANC IAL information

61

AFD Group 2014 financing commitments

By Country (€ million)

Project grants, NGO support, Miscellaneous grants

Sub-Saharan Africa

2013 2014

Budget Support and Debt ReductionDevelopment Contracts

2013

Benin

6.2

11.4

Burkina Faso

3.2

7.0

Burundi

3.5

0.3

3.0

Cameroon

0.6

1.5

10.0

Central African Republic

0.4

9.0

Chad

8.3

17.5

Comoros

0.5

3.0

1.0

Congo (Democratic Rep. of the)

6.7

6.0

46.0

2014

Loans

Credit Guarantees

2013

2014

92.5

30.0

31.0

83.0

179.7

110.0

1.4 21.3

2014

Private Equity

2014

Delegated Funds

2013

2014

3.8

9.0

20.3

5.7

59.8

2013

17.8

TOTAL

2013

2014

15.2

66.4

156.8

42.7

6.5

0.3

211.6

212.3 26.0

26.0

Cape Verde

4.0 12.5 44.0

Congo (Republic of the)

1.0

2.3

40.0

45.0

Côte d'Ivoire

2.5

0.5

388.7

123.2

Djibouti

6.3

2.5

Ethiopia

1.5

1.0

Ghana

0.5

0.3

Guinea

12.4

5.0

Kenya

0.5

0.5

Madagascar

13.8

9.0

Mali

15.2

20.9

Mauritania

2.2

0.8

Mauritius

1.0

0.5

60.0

27.0

Mozambique

1.5

0.4

82.8

20.1

6.8

14.0

20.0

3.1

2.0

0.5

18.1

18.6

9.5 0.5

132.0 60.0 119.0

165.0

204.0

5.8

61.6

39.5

2.7

0.01 7.5

3.9 267.9

0.1

2.0

50.0

46.0

2.4 5.1

31.9 12.0

Gabon

12.3 12.3 7.5

239.2

4.0

40.0

12.1

7.9

72.0

3.5

4.3

0.9

3.0

30.0

15.0

68.8

5.0

21.9

80.0

10.0

10.0

0.5

33.1

1.5

3.0

57.1

51.0

46.1

179.3

469.4

142.3

6.3

36.4

51.5

127.5

182.8

236.3

77.0

39.9 61.5

5.5

302.5

245.1

3.0

25.8

59.9

55.8

166.0

17.1

1.5 0.9 1.6

7.9 2.0

5.8

2.2

88.1

2.9

61.9

38.3

85.9

24.5

1.9

2.0

2.0 26.0

13.0

24.6

5.2

Namibia Nigeria

0.4

32.9

1.7

5.2

Liberia

Niger

2013

30.0

66.0

197.7

300.1

183.0

76.0

0.8

77.7

99.6

13.9

197.7

314.5

5.9

207.6

110.2

100.3

120.0

108.5

55.5

0.7

1.0

11.0

0.5

0.5

Sao Tomé and Principe Senegal

8.7

28.3

South Africa

0.3

100.0

120.0

Tanzania

0.7

107.6

54.0

Togo

10.3

1.5

0.2 6.0

0.7

27.5

102.5

Zambia

50.0

14.7

Zimbabwe

14.7

Uganda

16.0

Multi-country Programmes

56.6

62.7

60.0

TOTAL

190.4

215.5

599.7

101.3 444.0

1,841.4

1.5 1.3 8.3

0.9

0.3

16.3

2.8

27.5

111.5

50.9

15.0

14.7 93.6 2,041.1

109.8

109.0

23.1

66.1

78.5

319.4

222.4

36.3

80.5

224.0

54.8

3,001.7

2,945.0

15.0

68.0

95.0

328.3

0.7

0.2

Middle East and North Africa Algeria Former Yugoslav Republic of Macedonia (FYROM)

0.3 0.7

80.0

260.0

0.2

5.9

Iraq

5.9

Jordan

95.3

1.5 66.7

3.5

155.0

14.0

254.3

172.4

20.3

16.6

42.0

Lebanon

1.2

3.5

65.6

Morocco

4.3

3.4

250.0

Palestinian Territories

15.4

10.9

Syria

7.0

3.0

Tunisia

6.2

4.8 0.5

Turkey

62

3.0

3.0

Egypt

Multi-country Programmes

13.4

4.1

TOTAL

51.2

30.6

A NNUA L R EP O RT 2 01 4

2.5

1.2

184.0 348.5

125.0

744.1

827.6

8.3 2.1

1.0

30.2 21.7

1.2

10.4

55.7

5.0

56.7

41.7

134.0

96.8

7.0

3.0

6.2

222.1

370.2

125.5

18.4

59.8

838.2

1,059.3

The above amounts reflect financing commitments made by AFD Group. *Financing from Proparco or the French Global Environment Facility (FGEF).

Project grants, NGO support, Miscellaneous grants

Asia and the Pacific

2013 2014

Afghanistan

10.0

Armenia

0.5

Budget Support and Debt ReductionDevelopment Contracts

2013

2014

Cambodia

2.1

China

0.4

Indonesia Laos PDR

4.0

2014

2013

2014

2013

11.5

0.5

73.2

114.5

0.3

2.1

18.6

74.5

3.7

0.6

115.0

87.6

0.8

330.0

250.0

1.7

211.6

171.4

5.8

3.8

2013

2014

10.0

12.3

21.6

1.5

11.5

11.5 120.0

2.9

5.0

76.3

0.7

5.3

28.8

87.7

115.0

108.3

339.0

250.8

214.6

183.7

4.0

1.9

20.0 0.1

4.0

3.0

0.1

0.1

8.5 3.0

1.7

10.6

0.2 11.4

11.4

1.2

4.0

3.0 62.1

11.9

57.6

4.5

14.4

109.8

46.8

4.8

109.9

51.7

75.1

215.1

5.7

75.1

220.8

2.5

4.9

4.9

Tadjikistan*

8.0

8.0

Uzbekistan Vanuatu

0.1

Vietnam

1.6

TOTAL

TOTAL

0.2

Sri Lanka

Multi-country Programmes

2014

1.5

11.5

Pakistan Philippines

2013

Delegated Funds

21.1

1.2

Mongolia* Myanmar

2014

Private Equity

0.2

Georgia India

2013

Credit Guarantees

12.3

Azerba誰djan Bangladesh

Loans

0.1 3.2

143.8

0.7

6.9

11.1

23.5

34.3

1,144.1

89.0

151.4

6.0 9.6

1,122.9

4.1

26.0

21.9

15.1

45.4

92.2

21.4

6.9

1,208.7

1,228.6

Latin America and the Caribbean 1.0

1.0

Argentina*

14.9

14.9

Bolivia

2.3

Brazil

395.0

291.6

7.7

404.2

1.5

293.9

18.5

Chile*

18.5

Colombia

404.1

Costa Rica*

15.6

41.6

15.6

41.6

0.05

14.8

229.3

15.7

229.3

1.1

17.5

7.3

17.5

Dominican Republic

0.9

El Salvador*

1.1

Ecuador

1.1

Guatemala

0.2

0.3

Haiti

3.6

7.4

3.0 15.5

54.7

1.6

147.0

116.0

Honduras* Mexico Nicaragua*

14.6

Panama*

37.0

Paraguay*

7.8 44.6

Peru Saint Lucia

0.2

Suriname

0.3

411.8

7.7

0.7

0.3

11.0 14.7

8.4

0.2

0.3

7.2

18.6

15.5

54.7

161.7

117.6

14.6 37.0

27.0

27.0

7.8 44.6

261.8

261.8

0.2 12.5

0.3

12.5

19.1

131.5

1,192.7

1,225.7

80.9

71.8

6,322.1

6,530.4

84.0

12.7

12.7

Uruguay* Multi-country Programmes

0.1

5.6

11.6

TOTAL

6.4

19.3

1,146.6

Non-country-specific Programmes

25.9

13.9

55.1

TOTAL Foreign Countries

297.4

313.6

599.7

444.0

114.9 1,184.2

0.7

42.2

4,931.3 5,218.0

0.3

7.4

11.0

15.1

11.0

0.2 115.7

145.9

23.9

11.0

15.5 73.3

163.7

304.6

245.2

French Overseas Provinces 92.4

75.9

18.1

8.1

110.5

136.5

76.2

36.5

7.7

173.6

83.9

Guadeloupe

146.1

291.1

28.9

25.6

174.9

316.6

Martinique

349.5

278.4

26.8

24.1

376.3

302.5

Mayotte

48.9

27.8

3.8

4.2

52.7

32.1

202.3

131.8

9.7

7.8

212.7

139.6

324.1

486.5

75.2

82.6

399.4

574.1

0.04

0.1

1.5

0.1

French Guiana French Polynesia

New Caledonia

0.5

0.7

Reunion

1.4

Saint Pierre and Miquelon Wallis and Futuna

0.2

0.03

Shared by several local governments

0.3

0.2

3.1 3.6

0.2

3.1

3.9

1.6 9.8

2.0

0.1

0.1

Shared by several local governments and provinces

AFD Group Total

1.4

7.8

Shared by several provinces

Total French Overseas Provinces

5.0

1.7 299.1

0.4 314.0

599.7

444.0

1,301.3

1,378.6

6,232.6

6,596.6

202.7 318.4

161.5 307.4

7.0 73.3

170.7

1,505.6 304.6

245.2

7,827.7

1,547.5 8,077.9

63

AFD 2014 Project financing commitments This is a partial list of projects approved for funding by AFD.

SECTOR

COUNTRY

PROJECT

BENEFICIARY

Agriculture and Food Security

BENIN

Promote agriculture and sustainable resource management in the Atakora hills

Central Government

11.00

BURKINA FASO

Food security and agricultural risk-management programme in eastern Burkina Faso

Central Government

34.00

CAMEROON

Support for small and medium-sized food producers and processors

Central Government

5.00

CHAD

Support for livestock herdsmen’s development

Central Government

6.00

GUINEA

Assistance with decentralization and rural development

Central Government

15.00

MALI

Support for the economic development of rural areas in the Ségou and Timbuktu Regions

Central Government

30.00

NIGER

Support for local governance to ensure an equitable distribution of social and economic benefits deriving from the Kandaji Dam on the Niger River, and management of the dam project's negative externalities

Central Government

7.00

Infrastructure and Urban Development

Water and Sanitation

64

Total commitment (€ million)

A NNUA L R EP O RT 2 01 4

Improve food security for households living in the Zinder and Diffa Regions

Central Government

1.20

SENEGAL

Promote family farms in the Matam Region

Central Government

20.00

MULTI-COUNTRY

Support programme for African agricultural cooperatives and organizations

NGO

BRAZIL

Credit line for municipal waste treatment projects in Paraná

Financial Institution

45.00

CAMEROON

Build urban facilities in Cameroon's mid-sized cities

Central Government

125.00

Improve fixtures on the second bridge over the Wouri River

Central Government

45.00

DJIBOUTI

Support for installing underwater fiber-optic telecommunications cables

Public-sector Enterprise

DOMINICAN REPUBLIC

Urban development in eastern Santo Domingo

Central Government

ETHIOPIA

Construction of a clean Bus Rapid Transit system (BRT) in Addis Ababa

Central Government

50.00

INDIA

Financing for the second phase of the Bangalore Metro

Central Government

200.00

LEBANON

Contribution to the multi-donor Lebanon Syrian Crisis Trust Fund

Financial Institution

3.50

MADAGASCAR

Improvements to slum dwellers' living conditions in the Antananarivo metropolitan area

Central Government

5.00

MAURITIUS

Financing for essential heavy equipment and a technical and financial recovery plan for the Mauritius Ports Authority

Central Government

27.00

MOROCCO

Capital investment to create a tourist area in Taghazout that showcases sustainable tourism

Public-sector Enterprise

20.00

NIGERIA

Comprehensive urban development plan for Lagos

Central Government

81.40

PERU

Housing improvements

Financial Institution

120.00

Sovereign loan to build Line 2 for the Lima Metro

Central Government

120.50

PHILIPPINES

Cofinancing (with the World Bank) of a Bus Rapid Transit project and improvements to the urban transit system in Cebu

Central Government

46.81

SYRIA

Contribution to the Syria Recovery Trust Fund

Financial Institution

3.00

SOUTH AFRICA

Support for an urban-space transformation strategy to strengthen social cohesion and reduce cities' carbon footprint

Local Government

120.00

TUNISIA

Support to refinance Tunisia's local-government lending arm, the CPSCL

Financial Institution

30.00

TURKEY

Financing for sustainable transportation in Izmir

Local Government

55.00

Contribution to the financing of new subway lines

Local Government

20.00

VIETNAM

Contribution to the financing of the Hanoi Metro

Central Government

69.00

MULTI-COUNTRY

Credit line to finance sustainable, low-carbon urban development projects in Latin America

Financial Institution

100.00

CHINA

Capital investment in sewerage services for Xiangyang

Central Government

33.60

CÔTE D'IVOIRE

Programme to support drinking water and sanitation projects

Central Government

41.50

DEMOCRATIC REPUBLIC OF THE CONGO

Support to set up drinking-water services in peri-urban areas around Kinshasa

Central Government

18.00

DOMINICAN REPUBLIC

Capital investments in water and sanitation for climate-change adaptation

Central Government

40.70

ETHIOPIA

Drinking water supply and access in mid-sized cities

Central Government

20.00

MYANMAR

Drinking water supply for Mandalay

Central Government

2.50

4.00

31.91 154.37

Total commitment (€ million)

SECTOR

COUNTRY

PROJECT

BENEFICIARY

Water and Sanitation

NIGER

Increase drinking-water production and distribution capacity in Niamey and improve sanitation and hygiene in the largest public hospitals

Central Government

26.00

Expand village-level hydraulics and sanitation in the Tillabéry Region

Central Government

15.00

NIGERIA

Improve urban water services in Ogun State

Central Government

26.47

PALESTINIAN TERRITORIES

Contribution to the multi-donor Gaza and West Bank Trust Fund for the Gaza Emergency Sewage Treatment Project

Public-sector Enterprise

SENEGAL

Improve drinking-water-supply services and security in the Dakar Region

Central Government

10.00

SRI LANKA

Programme to expand wastewater treatment plants in three coastal villages

Central Government

76.00

SURINAME

Support for the Suriname Water Supply Company

Central Government

12.50

TUNISIA

Sewerage and waste removal systems for working-class neighborhoods in Tunis

Central Government

30.00

BENIN

Support for a secondary-education project

Central Government

10.00

DEMOCRATIC REPUBLIC OF THE CONGO

Support for the National Institute for Professional Training

Central Government

16.00

DOMINICAN REPUBLIC

Credit line for a university to strengthen social and financial inclusion, academic excellence, and institutional internationalization

Private-sector Enterprise

Education

GUINEA

Energy

3.50

7.31

Student loan program to improve access to higher education

NGO

5.00

Contribution to the development of an inclusive, high-quality educational system that helps to reduce inequalities

Central Government

11.00

Improve job training and placement in the agricultural and mining sectors

Central Government

15.00

HAITI

Help Haiti's jobs-training institute (INFP) to meet the economy's skills needs and assist youth in finding jobs

Central Government

5.00

KENYA

Financing to build sustainable and accessible housing for university students and staff

Financial Institution

20.08

MOROCCO

Support for Morocco's employment and skills-training policies

Central Government

50.00

Create jobs-training centers specializing in the renewable energy sector

Central Government

10.00

SENEGAL

Support for job training to promote employment and competitiveness

Central Government

12.00

TUNISIA

Support programme for job training and placement

Central Government

24.00

MULTI-COUNTRY

Improvement to and diversification of education in West Africa

NGO

BANGLADESH

Expand and improve the efficiency of Dhaka's electrical grid

Central Government

100.00

BENIN

Improve access to energy by contributing to the financial recovery of the Benin Electricity Distribution Company

Central Government

20.00

BRAZIL

Credit line to develop renewables and promote energy efficiency

Financial Institution

165.00

CAMBODIA

Expand transportation infrastructure and electricity distribution

Public-sector Enterprise

70.00

CAPE VERDE

Electricity generation on the island of Sal

Central Government

26.00

DJIBOUTI

Support for sustainable and low-carbon growth through geothermal power, an endogeous energy source

Central Government

2.50

EGYPT

Support for the construction of a solar photovoltaic power plant

Central Government

40.00

Programme to bring city gas lines to poor areas

Central Government

70.00

ETHIOPIA

Support for geothermal energy exploration

Central Government

9.00

INDIA

Financing for India's national energy service company to support and promote the country's energyefficiency policy

Financial Institution

50.00

INDONESIA

Financing for renewables and green infrastructure

Financial Institution

81.40

KENYA

Financing for capital investments to increase electrical grid reliability

Public-sector Enterprise

56.00

Credit line dedicated to energy efficiency and renewables

Financial Institution

12.00

Decentralized rural electrification project

Central Government

33.00

MOROCCO

Funding facility to promote sustainable energy

Financial Institution

5.00

MAURITANIA

Support for electricity production from local natural gas and for rebalancing the energy mix in Mauritania and Senegal

Central Government

80.00

MEXICO

Development of energy efficiency and renewables projects for CFE (Federal Electricity Commission, or Comisión Federal de Electricidad)

Public-sector Enterprise

REPUBLIC OF THE CONGO

Support for the national power company, Société nationale d'électricité (SNEL)

Central Government

75.00

1.29

100.00

UGANDA

Extension of rural electrical grid

Central Government

42.90

PAKISTAN

Refurbishment of the Warsak Hydroelectric Power Station

Central Government

41.50

FINANC IAL information

65

SECTOR

COUNTRY

PROJECT

BENEFICIARY

Energy

SENEGAL

Construction of a high-voltage line from Keur Pèr to Saint Louis and support for the recovery of Senegal's electricity sector

Central Government

SRI LANKA

Financing for four electricity sub-stations and increased energy efficency in the power supply network

Central Government

TUNISIA

Financing of transportation infrastructure and for natural gas processing and flare-gas recovery plants

Public-sector Enterprise

BURKINA FASO

Natural resource conservation and human development in the north-central region

Financial Institution

1.50

CHINA

Wetland restoration and value creation along the Changyuan River

Central Government

30.00

COMOROS

Support for marine and terrestrial biodiversity conservation in Comoros' National Marine Park

Central Government

3.00

DEMOCRATIC REPUBLIC OF THE CONGO

Support for sustainable forest management

Central Government

6.00

EGYPT

Credit line to clean up air and water polllution

Central Government

50.00

GABON

Project to support the forest products industry and to combat poaching in Gabon

Central Government

10.00

Support to fight ivory trafficking and wildlife poaching in Gabon

Central Government

10.00

INDONESIA

Financing to create fishing EcoPorts in Indonesia

Central Government

90.00

MULTI-COUNTRY

Support for ecosystem- and biodiversity-damage compensation systems in four African countries

NGO

1.50

Project to exploit the commercial value of tropical wood certification in the Congo Basin

NGO

1.50

Biodiversity and Natural Resources

Health and Social Protections

Business, Industry and Trade

Other (Budget support, debt relief, etc.)

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40.00 52.00 100.00

3.68

Contribution to the Forest Carbon Partnership Facility's Carbon Fund

Financial Institution

AFGHANISTAN

Project to support maternal and infant health

NGO

10.00

CENTRAL AFRICAN REPUBLIC

Strenghten healthcare and psychosocial assistance for pregnant and nursing women and their children

NGO

1.50

CHAD

Contribution to reduce maternal, infant and neonatal mortality

Central Government

CÔTE D'IVOIRE

Financing for the Côte d'Ivoire Ebola Virus Preparedness and Response Plan

Central Government

6.86

GABON

Support for Gabon's healthcare system

Central Government

50.00

GUINEA

Support for Guinea to fight the Ebola epidemic

NGO

4.00

MALI

Support programme to expand social and healthcare services in the Mopti Region

Central Government

13.00

NIGER

Contribution to the central government's healthcare programme, particularly for women and children

Central Government

13.00

SENEGAL

Project to support women's and children's health in Casamance

Central Government

10.00

Project to improve the health of Senegalese children form birth to age 5

Central Government

8.00

Improvement in social services and healthcare for people sufferinig from sickle cell anaemia

NGO

1.49

Support to set up four regional health-services centers to fight HIV/Aids

NGO

1.47

CAMBODIA

Green credit lines for micofinance institutions

Financial Institution

4.50

EGYPT

Credit line to promote and create more value from inter-Africa and intercontinental trade

Financial Institution

100.00

KENYA

Environmental credit lines

Financial Institution

46.00

MOROCCO

Credit line

Financial Institution

20.00

NIGERIA

Support to set up a bank dedicated to financing small and medium-sized enterprises

Central Government

105.82

PALESTINIAN TERRITORIES

Palestinian business-upgrade project

Central Government

5.00

TUNISIA

Support for the national business clusters programme

Central Government

1.50

MULTI-COUNTRY

Contribution to a multi-donor bond fund to finance social enterprises in developing countries

Financial Institution

6.66

Promotion and dissemination of responsible microfinance principles

NGO

2.00

Certified professional training in microfinance in Haiti and French-speaking African countries

Private-sector Enterprise

2.00

Support for the Microinsurance Innovation Facility in sub-Saharan Africa

NGO

3.00

Support for small and medium-sized food processors to expand sales of high value-added products

NGO

1.50

CENTRAL AFRICAN REPUBLIC

Participation in the multi-donor “Bêkou” Trust Fund for the Central African Republic

Public-sector Enterprise

5.00

CÔTE D'IVOIRE

Support for the justice sector as part of a debt relief and development contract

Central Government

23.00

Targeted budget support as part of a debt relief and development contract

Central Government

51.46

GUINEA

Targeted budget support to fight the Ebola epidemic

Central Government

5.00

MADAGASCAR

Budget support loan

Central Government

40.00

MALI

Budget support loan for the national 2014-2015 budget

Central Government

40.00

NIGER

Global budget support

Central Government

10.00

DEMOCRATIC REPUBLIC OF THE CONGO

Contribution to improve Congolese public-finance management and to create a national school of public administration

Central Government

10.00

VIETNAM

Targeted budget support for a programme to fight climate change

Central Government

20.00

MULTI-COUNTRY

66

Total commitment (€ million)

10.00

Above does not include Proparco or French Overseas Provinces projects (please refer to their annual reports for details about their projects.)

Coordination: Marie de Jerphanion (AFD), Benjamin Neumann (AFD), Kulthum Laoufi (AFD), Marie-Laure Portal (freelance consultant).

Art direction and lay-out: Pepper Only.

Printing and production: Déjà Link.

English translation: Suzan Nolan, BlueSky International.

Photo credits P.1: Benjamin Petit / P.2: James Keogh P.4: Pepper Only / P.5: Alain Goulard P.10: Federico Creative Commons License P.11: a: Pierre Maspoli - b: Nicolas Beaumont French Red Cross P.12: Marc Lee Steed / P.13: Cyril Le Tourneur d’Ison P.14: Isabelle Bonillo / P.20: Cyril Le Tourneur d’Ison P.21: AFD Addis Ababa office / P.22: Philippe Guionie P.23: a : Alain Goulard - b: Félix Vigne P.24: Pierre Terdjman / P.25: Benjamin Petit P.26: Caroline Absi / P.27: AFD Jerusalem office

P.28: a: Augustin Le Gall - b: Benjamin Petit P.29: Didier Gentilhomme / P.30: Didier Gentilhomme P.31: Kochi Metro Rail Limited / P.32: Benjamin Petit P.33: Benjamin Petit P.34: a & b: AFD Santo Domingo office (Rover Alvarez - Marie Joly) P.35: a: Marie Joly AFD - b: Gilles Genre-Grandpierre AFD P.36: Julien Girardot / P.37: AFD Fort-de-France office P.39: Benjamin Petit / P.40: a: Nicolas Beaumont French Red Cross - b & c: Alain Goulard P.42: Didier Gentilhomme / P.44: Dominique Fradin P.45: Alain Goulard / P.46: Benjamin Petit P.48: Nacho Bonilla P.50: a: Virgine Leroy Saudubray - b: Djantoli (NGO) P.51: Cyril Le Tourneur d’Ison P.52: Pepper Only / P.55: Pepper Only P.57: a: Kulthum Laoufi - b: Carl Bernadac - c: Océane Puech P.59: Antoine Raab Melon Rouge / P.67: Frédéric Maurel

This report was printed with vegetable rather than petroleum-based inks.

Use of the Programme for the Endorsement of Forest Certification (PEFC) logo indicates that the timber harvested for paper pulp did not contribute to deforestation or impair environmental, economic and social uses of forest areas.

ISSN: 1299-0108 Copyright © June 2015

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Agence Française de Développement Tel: +33 1 53 44 31 31 Fax: +33 1 44 87 99 39 5, rue Roland Barthes 75598 Paris Cedex 12 France www.afd.fr

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