AFD_REGISTRATION_DOCUMENT_2017

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CORPORATE SOCIAL RESPONSIBILITY

Environment

The target of directing 50% of financing granted to climate co- benefit projects is retained and extended to the Group as a whole, as is the policy of making selections in the light of their climate impact. By 2020, €5bn will be devoted each year to projects with direct co-benefits for the climate in foreign countries, including €1.5bn per year for adaptation measures. In 2017, AFD Group committed around €4bn in climate-related financing, corresponding to an involvement in the financing of 124bdevelopment projects with co-benefits related to combating climate disruption and its effects (compared with 83bprojects in 2016, representing an increase of 49%). This level of commitment raises the total financing which has a “climate” co-benefit by AFD Group to almost €29bn since 2005. With almost €3.4bn in “climate” financing approvals granted in developing countries in 2017, AFD (excluding Proparco) achieved a level of 50.4% (compared with 51% in 2016) of “climate” approvals. For its part, Proparco granted €646M of “climate” financing approvals, a 47% level of activity with a “climate” joint benefit (compared to 36% in 2016). Total greenhouse gas emissions avoided or reduced thanks to climate co-benefit projects financed during the year are estimated at 4.8M teq CO 2 /year over the duration of the projects’ lives. Financing arrangements with a climate benefit in 2017bhave, for example, enabled projects to be supported for reinforcing capacity and infrastructure to combat climate risks in the River Lujan watershed in Argentina, or to support the “Climate change adaptation of towns” programme in Benin. SUNREF lines of credit to Cameroon and Mauritius for projects supporting climate change mitigation and adaptation and reducing inequality between women and men have also been granted, targeting the private sector. Other examples include the continuing financing of the high speed railway line between Tangier and Kenitra (Morocco) or agro-ecological transition projects in Burkina Faso or cotton-growing areas in Benin. Finally, AFD Group, through its Proparco subsidiary, participated in the financing of very large solar farms, whether in Egypt (a farm of 1.8GW installed capacity to the north of Aswan) or in Brazil (the second largest solar farm in South America, in Bahia state). In 2014, AFD had issued its first Climate Bond issue with a ten- year maturity date for an amount of €1bn. In order to participate in the development of common standards, the approach was built around the Green Bond Principles: justification of the uses of the funds, monitoring of the cash flows, an external opinion and a robust reporting system. AFD has continued its activity in this field in 2017. It has created a programme framework in order to become a more frequent issuer. In this context, AFD has issued a second Climate Bond in the amount of €750M for six years. As a result, AFD’s outstanding amount of Climate Bonds now stands at €1.750bn. The next dedicated and enhanced report will be published during the first half of 2018. In areas of partnerships, AFD has been accredited to manage financing granted by the Green Climate Fund (GCF) since July 2015. The signing, at COP 23 (at the beginning of November 2017), of the framework agreement accrediting AFD with the GCF will allow AFD to implement the first two AFD transactions which were approved by the GCF in October 2015band April

2016brespectively: i) programme to combat flooding risks in urban environments in Senegal (AFD financing of €50M, €6M from the Senegalese government and €15M from the GCF), and ii) project to develop irrigation and to adapt agriculture to climate changes (PDIA-CC) downstream from the Kaddoussa dam in Morocco (AFD financing of €41M, €18M from the Moroccan government and €20M from the GCF). Some 15btransactions are currently being identified/assessed with the GCF. AFD is also continuing to play an important role within two major networks of players in the financing of development and climate issues. In October 2017, AFD was appointed to the chairmanship of the International Development Finance Club (IDFC), a network of 23bnational, regional and international development banks. Climate finance is one of the principal unifying themes within this network. AFD will have a crucial role to play in it, particularly by promoting the implementation of the Paris Agreement. AFD participates actively in the work of the Climate Action in Financial Institutions initiative, in which around 40bpublic and private institutions are discussing the question of incorporating climate issues in their intervention strategies and operating methods on the basis of five major mainstreaming principles. 2.2.4.2 Protecting biodiversity The regions where AFD operates, including the French Overseas Departments and Collectivities, are home to remarkable biodiversity that is significant locally, regionally and also globally. Through its cross-cutting framework initiative on biodiversity for 2013-2016 (extended up to 2018), AFD wanted to increase the amount of its initiatives in this sector: As a result, it has been decided that the annual average volume of AFD’s weighted financial commitments would be increased to a minimum of €160M, in order to protect, restore, manage and enhance ecosystems, include biodiversity in development policies and strengthen partnerships between France and developing countries with regard to biodiversity. In 2016, AFD easily exceeded this target, with €337M of commitments in support of biodiversity. The question of enforcing international standards in the area of biodiversity is posed and incorporated into the implementation of the projects financed. In addition to the implementation of environmental work, AFD Group is prohibited from financing “trade in animals, vegetables or any natural products which do not comply with the provisions of the Convention on International Trade in species of wild fauna and flora threatened with extinction” and, furthermore, “any operation leading to or requiring the destruction of a critical habitat or any forestry project which does not implement a plan for improvement and sustainable management”. AFD Group also ensures that any agricultural project that it finances, whoever the initiators are, does not contribute to forest degradation or forest deforestation, thus promoting a “zero deforestation” policy. The Group undertakes that its operations shall not have a significant impact on biological balance, the natural environment or protected animal and plant species. As a result, AFD Group ensures that the catering service takes great care to offer products that respect ecological balance: no protected fish species are consumed, a range of organic and fair-trade products are offered, etc.

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REGISTRATION DOCUMENT 2017

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