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AFD M issions & financial tools

AFD M issions & financial tools. VIENTIANE. November 4th 2011. 1. AFD at a glance. What is the AFD Group?. 1. A n “EPIC” under French law, e.g. a public establishment that has industrial and commercial characteristics. Three French Ministries provide oversight:

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AFD M issions & financial tools

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  1. AFD Missions & financial tools VIENTIANE November 4th 2011

  2. 1. AFD at a glance AFD workshop

  3. What is the AFD Group? 1 • An “EPIC” under French law, e.g. a public establishment that has industrial and commercial characteristics. Three French Ministries provide oversight: • Foreign and European Affairs • Economy, Finance and Industry • Interior, Overseas France, Local Authorities and Immigration • AFD, a specialized financial institution subject to banking regulations. and a subsidiary dedicated to private-sector financing, PROPARCO, form the AFD Group • A development-finance and aid organization that implements France’s aid policies, drawing on: • Cooperation framework agreements approved in November 2010 • A ″means and objectives″ contract, defined with AFD’s supervisory ministries AFD workshop

  4. Funding growth continues 1 AFD workshop

  5. Operating regions and new offices opened in 2010 1 AFD workshop

  6. AFD’s international “ecosystem” 1 AFD workshop

  7. AFD’s French partners and interlocutors 1 AFD workshop

  8. AFD optimizes public development-aid monies 1 AFD workshop

  9. Financial instruments 1 AFD workshop

  10. AFD’s funding by region (€ Million) 1 AFD workshop

  11. Sectors 1 AFD workshop

  12. Development results 1 In 2010, AFD approved funding for developing and emerging countries that will help : • Improve drinking-water supply for 33 million people • Provide primary schooling for 13.4 million children • Refurbish or build transportation systems that will be used by 85.8 million passengers per year • Abate 5 million tons of CO2annually through energy efficiency • Connect 8.2 million people to the telecommunications network • Provide 3 million people access to traditional or renewable electricity systems • Grant €428 million worth of microloans, benefitting more than 700,000 people • Improve wastecollection and disposal services for 2.4 million people • Support agricultural and irrigation projects that will benefit 1.4 million people AFD workshop

  13. 2. AFD in LAOS AFD workshop

  14. AFD in LAOSPresentation 2 • Operates since 1994 • 4 sectors of intervention • Rural development • Infrastructures : energy, water • Urban development • Health • 120 M€ of overall commitment • Subsidies : 100 M€, 34 projects • Loans : 20 M€ AFD workshop

  15. AFD in LaosRecent evolutions 2 • Since 2007 : • Focus on 3 sectors • Rural development • Health • Urban development • Current financings • 7 projects in activity • 17,1M€ in disbursement process • AFD strategy for the future : • development of non sovereign activity AFD workshop

  16. 3. Non sovereign activity AFD workshop

  17. Non sovereign activity General presentation 3 • A development pushed by : • AFD new context tending to reduce the amount of subsidies • Impossibility for AFD to lend money directly to the Laos State • 3 available financial tools : • Loan • Equity • Guarantee • Counterparts : • Private sector • Public companies • Financial sector (banks and MFI) AFD workshop

  18. Identification Feasibility Appraisal Decision Legal negotiation Disbursement Board Financing Committee Identification Committee Financial agreement Notification Letter of interest Non sovereign activity Project cycle - AFD 3 AFD workshop

  19. Non sovereign activity Compulsory criteria of attribution 1/3 3 • Corruption, money laundering and terrorist financing • As part of the Financial Action Task Force (FATF), AFD needs • Specific due diligences • Legal documentation • Executive management and members of the board • Of the beneficiary company • Of the owner’s companies (up to 10% of indirect ownership) • Undertakings to be part of the credit facility agreements • Business Relationships • Licit Origin of the Funds • No Corruption AFD workshop

  20. Non sovereign activity Compulsory criteria of attribution 2/3 3 Undertakings to be part of the credit facility agreements (extracts) • Business Relationships • The Borrower undertakes not to enter into a business relationship with any person, group or entity which is listed on any of the Financial Sanctions Lists (including in particular the fight against financing of terrorism). • Licit Origin of the Funds • In all circumstances, the Borrower undertakes to promptly notify the Lender in the event that information comes to its attention causing it to suspect that the funds may be of illicit origin. • No Corruption • The Borrower undertakes to ensure that the Project (including the negotiation, award and performance of contracts financed with the Facility) shall not give rise to any Corruption. AFD workshop

  21. Non sovereign activity Compulsory criteria of attribution 3/3 3 • Environmental and social impacts AFD workshop

  22. Thank you

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