AFD - 2018 Registration document

PRESENTATION OF AFD

Activities of the Agence Française de Développement group in 2018

A key element of activity in the Middle East was the commitments made as part of the Sawa Initiative for resilience and refugees. AFD pledged €42M to finance projects to help both host communities and refugees (Lebanon, Jordan, Iraq). In the Balkans , where activity is in its very early stages, most of the year was given over to project preparation. It was in Asia where commitment authorisations recorded the highest increase (+50%) to reach a figure of €1.8bn. The main beneficiaries were the countries in Southern Asia, followed by South East Asia. Most of the activity involved sovereign loans but a slight increase in non-sovereign activity (€225M) is also to be seen. Subsidies accounted for 3% of the commitment authorisations over the year. Use of European delegated funds was lower than in previous years: €25M (€65M in 2017) was mobilised via the Asian Investment Facility to help set up projects in India, Vietnam and Sri Lanka. Public policy loans covered more than 22% of AFD’s activity in Asia, primarily an initial budget loan in Uzbekistan to support the country’s economic and financial reforms alongside the Asian Development Bank (AsDB). The Latin America region was marked by an election year with very different results. The continent’s economic growth

was a modest 1.5% (versus 2.2% in 2017) despite significant differences between the countries. The global scenario was complex, characterised by growing geopolitical risks, a slump in capital flows into emerging markets, and higher levels of sovereign risk. AFD’s commitments in Latin America and the Caribbean suffered as a result, reaching €1.2bn in 2018, shy of the objectives set at the beginning of the year. The business plan was driven mainly by four countries (Argentina, Ecuador, Colombia and Mexico). AFD continued to support Colombia and its climate policy through a third public policy loan (€200M), which, what is more, was the only loan in 2018 in a region where recurrent use is made of this type of instrument. Activity in Ecuador, driven by the water and energy sectors, helped engage a commitment of around €75M in 2018. It was AFD’s second year of operation in Argentina, where it embarked on its first non-sovereign activities with a public bank at a time when sovereign debt is capped at €100M per annum due to the pressure on Argentina’s public finances which was particularly marked this year. In Mexico, energy-related activity continued with a third major transaction (€150M) with the national electricity company CFE. In Brazil, after 2017 saw a recovery from the 2015 economic crisis, and with the presidential elections looming, the year was a write-off for AFD.

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BREAKDOWN OF AFD’S APPROVALS BY SECTOR OF ACTIVITY: The 2017 and 2018 approvals including budgetary aid, guarantees given, loans, subsidies and investments in ongoing operations are shown as follows, by branch of activity:

2017 % of the 2018 total % of the 2017 total

2018

In millions of euros

Agriculture and food safety

731 898 182 658

633 987 123 148

9%

10% 15%

Water and drainage

11%

Education and vocational training Environment and natural resources Infrastructure and urban development

2% 8%

2% 2%

2,776 1,115 1,223

3,230

34% 14% 15%

49% 13% 23%

of which transport

854

of which energy

1,513

of which development and urban management of which infrastructure and miscellaneous social services

102

590

1%

9%

326

162 111

4% 0% 5%

2% 2% 1%

of which other

10

Healthcare and AIDS prevention Business, Industry and Trade

435

74

1,483

738 704

18% 12%

11% 11%

Other and multiples sectors

992

TOTAL

8,156

6,639

100%

100%

Information about loans does not include the status of AFD loans to Proparco

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REGISTRATION DOCUMENT 2018