AFD - 2018 Registration document

1

PRESENTATION OF AFD

Activities of the Agence Française de Développement group in 2018

9 % Agriculture and food safety

12 % Other and multiples sectors

11 % Water and drainage

2 % Education and vocational training 8 % Environment and natural resources

18 % Business, Industry and Trade

6 % Healthcare and AIDS prevention

34 % Infrastructure and urban development

In 2018, infrastructure and urban development remained a key sector with 34% of the year’s approvals, even although the figure was lower than in the previous financial year. Total commitments were €2.8bn in 2018 versus €3.2bn in 2017. Most of AFD’s activity in this sector was in the transport and energy segments. The spread in transport activity was fairly even in terms of geography and mode: around half of commitments were on the African continent, primarily two major rural road programmes in Kenya and Nigeria; likewise, half of commitments were to further sustainable urban mobility by financing underground and suburban train infrastructures on all continents. 2018 marked the maturity of the MYC (Mobilize Your City) partnership, which helps cities plan for low-carbon mobility and is now deployed on all continents; this in turn led to a stronger partnership with the Asian Development Bank. In 2018 AFD confirmed its commitment to energy transition, linked to the Climate commitments, with a significant increase in network transformation approvals aimed at incorporating more renewable energies. Africa is still the number one area of operation for AFD when it comes to energy. The Business, Industry and Trade sector was AFD’s second area of operation this year with 18% of commitments (€1.5bn) versus 11% in 2017. Water and drainage accounted for 11% of 2018 commitments at €0.9bn compared to €1.0bn in 2017. Although lower than last year, these commitments easily exceeded the targets set for the Water and drainage strategy for the period 2014-2018. The main area of operation was Asia and the Middle East which, at €440M, accounted for 40% of the total. In Vietnam AFD granted total funding of €128M for several projects to help build resilience to combat the effects of climate change (sanitation, flood prevention, etc.). With commitments of €200M, Latin America is still a business development area in this sector where AFD is funding several initial operations in Cuba and Peru. In 2018 the water and drainage sector made a massive contribution to combating climate disruption, mainly by way of

adaptations. 70% of total funding, i.e. €660M, was associated with climate co-benefits. These were projects to secure water supplies (€380M), combat flooding (€16M) and improve drainage (€260M). Commitments in the agriculture and food safety sector remained relatively stable at €0.73bn in 2018 compared to €0.63bn en 2017, accounting for 9% of AFD’s activity. AFD aligned its action in Sub-Saharan Africa with the 2013-2016 “Food Safety in Sub-Saharan Africa” strategy, exceeding the strategy target in 2018 by granting funding of €490M. Around 40% of the projects targeted the Sahel, supporting food safety and the resilience of farming in vulnerable areas. Environment and natural resources commitments trebled between 2017 and 2018 to reach €0.66bn. A 2018 highlight was the significant recovery of funding for biodiversity and the sustainable management of natural resources with a record €342M in commitments. This compares with €75M in 2017 (biodiversity funding excluding the diversity component of other projects). In 2018, 85% of AFD’s biodiversity funding was allocated to the Eastern region (€291M), with 10% for Africa (€34M) and 2% (€7M) for the Three Oceans. The healthcare and AIDS prevention sector accounted for 5% of AFD’s activity in 2018 versus 1% in 2017. In 2018, AFD funded 36 projects (24 in 2017) in the healthcare and social protection sectors for a total of €545M, i.e. almost double the historic trend for the period 2011-2017, of which €495M was allocated to Foreign Countries (91%) and €50M to French Overseas Departments and Collectivities (9%). The funding granted (€473M) was in the form of loans of which 80% were sovereign loans, 10% non-sovereign loans, and 11% subsidised loans in French Overseas Departments and Collectivities. Finally, in the education, vocational training and youth employment sector AFD began 21 new projects in foreign countries in 2018 (14 in 2017) for a total of €281.5M, of which €100M in non-sovereign loans, €70M in subsidies, €50M in C2D

28

www.afd.fr

REGISTRATION DOCUMENT 2018