AFD - 2018 Registration document

6 CONSOLIDATED FINANCIAL STATEMENTS PREPARED IN ACCORDANCE WITH IFRS ACCOUNTING PRINCIPLES ADOPTED BY THE EUROPEAN UNION Notes to the consolidated financial statements

Note 1.2.1 Loans that do not meet the SPPI criteria Loan agreements may have an early repayment clause, the contractual amount of which corresponds to a settlement equal to the cost of unwinding an associated hedge swap. The early repayment flows of these loans are considered to be non-SPPI if they do not purely reflect the effect of changes in the reference interest rates. As a result, AFD Group has identified a loan portfolio which is measured at fair value through profit or loss. The loans are therefore subjected to a valuation exercise based on the methodology for discounting future flows, with a discount rate specific to each loan in accordance with the accounting rules applied by the Group. Note 1.2.2 Bonds and other long-term securities Convertible bonds are debt securities whose contractual flows are not SPPI due to the nature of the flows exchanged. They are therefore measured at fair value through profit or loss.

Note 1.2.3 Equity investments AFD Group aims to encourage private investment in the developing countries, mainly via its subsidiaries Proparco and Fisea (Investment and Support Fund for Businesses in Africa). It acts primarily through investments in investment funds, as this activity enables it to increase the impact of its funding by supporting a large number of companies doing business in multiple sectors, thus promoting economic growth and the creation of job-creating businesses. AFD Group also holds direct equity investments with put options for operational purposes. The contractual flows of these financial assets are not SPPI and are therefore measured at fair value through profit or loss.

Investments in unconsolidated structured entities ❙ Breakdown by activity portfolio:

Number of equity stakes

31/12/2018

Equity stakes held in investment funds Homogeneous activity portfolios Agribusiness

9 5 6 3

71,664 34,452 62,889

Energy

Infrastructure

Mining

2,557

Multi-sector SME-SMI

12

70,852 33,492 156,697 362,333 794,935

Healthcare

4

Financial services

18 68

Multi-sector

STRUCTURED UNCONSOLIDATED ENTITIES

125

❙ Breakdown by operating region:

Number of equity stakes

Equity stakes held in investment funds

31/12/2018

Operating region Southern Africa

6 9 6

7,319

East Africa West Africa North Africa

53,766 21,537 101,141 106,599 504,573 794,935

21 19 64

Asia

Multiple regions

STRUCTURED UNCONSOLIDATED ENTITIES

125

136

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REGISTRATION DOCUMENT 2018