AFD : France’s national institution working for development
► Who are we? [+]
Agence Française de Développement is the operator for France’s bilateral development finance mechanism. It is a public industrial and commercial institution with the status of specialized financial institution. Its action is in line with the policy set out in France’s Framework Document for Development Cooperation. This document was approved at the end of 2010 and in 2011 was translated into a three-year contract specifying objectives and resources between the French Government and AFD.
AFD’s teams are based in Paris and Marseille and in a network of seventy agencies and representations in developing countries and the French overseas provinces.
AFD Group comprises a private sector financing arm, Proparco, and is also a shareholder of housing companies and a financial company in the French overseas provinces, where the Group plays a specific role in this sector.
AFD is also responsible for the management of the French Global Environment Facility (French GEF), which cofinances projects that reconcile environment and development.
► What we do ? [+]
AFD has been entrusted with a mandate by the French national authorities to contribute to economic and social development in its geographical areas of operation. It achieves this by financing and supporting development projects and programs, participating in the debate, research and dialogue with the relevant stakeholders.
The aim of these actions is to contribute to more sustainable and shared economic growth, improve living conditions in the poorest regions and countries, contribute to preserving the planet and help stabilize fragile or post-conflict countries.
AFD carries out this mandate through its financing, risk analysis and hedging instruments, and expertise in training and capacity building, which it provides to both public and private stakeholders. In the poorest countries, primarily in Sub-Saharan Africa, AFD mainly operates through grants. In middle-income countries, it allocates soft loans and provides technical assistance, which strengthens the contracting authorities for the funded projects and develops cooperation on common challenges in these countries. In emerging countries, it allocates market-rate loans to finance projects that fight against climate change. In the French overseas provinces, it implements support, advisory and financing activities for local public and private stakeholders and promotes initiatives for cooperation and regional integration.
In 2012, AFD Group approved a total of EUR 6.98bn of financing, including EUR 1.5bn in the French overseas provinces. Over 69% of the Government’s financial effort focused on Sub-Saharan African countries, particularly the priority poor countries, and almost 14% on Mediterranean countries.
Reflection on development assistance methods and participation in international strategic debates are two full-fledged activities at AFD. The “knowledge production” activity allows us to adjust operations to changes in practices, needs and operational contexts.
AFD maintains a regular dialogue on the objectives and results of its action with parliamentarians, ministries, regional and local authorities, enterprises and civil society organizations that are concerned by development issues. It also works with them to raise the French public’s awareness of these issues.
► Whom do we work with? [+]
The beneficiaries of our financing
AFD Group provides project financing to governments (which account for the bulk of financing), regional and local authorities or Federated States, public and private enterprises, banks and microfinance institutions, investment funds, international funds, international and regional organizations, universities, NGOs, associations and foundations. These entities are the contracting authorities and lead the project, from its identification to the feasibility study, including the management of the enterprises tasked with designing and subsequently conducting the works.
AFD, for its part, selects the projects submitted for financing on the basis of their viability and relevance in terms of its strategic orientations. It is responsive to officials and contracting authorities throughout the project cycle, which allows it to define and propose appropriate resources and financial instruments. AFD’s network of agencies further strengthens this dialogue.
Sustainable development is achieved by involving the various stakeholders – from the North and South, national and local, public and private and associations – in the processes. The partners may not necessarily be the direct beneficiaries of AFD Group financing, but they do nevertheless contribute to ensuring that projects are successful. AFD is aware of this factor and supports French stakeholders that have complementary expertise, as well as their coalitions: regional and local authorities, enterprises, specialized professional entities, academic institutions and civil society organizations. It has also developed a wide range of international partnerships with European aid agencies and major development banks, but also with the new donor countries and private foundations.
Suppliers and subcontractors also play a key role, particularly for the project evaluations conducted by AFD Group (studies and consultant missions account for 60% of its procurement). AFD mainly works with specialized consulting firms or NGOs for these activities.
► How do we work? [+]
AFD Group is committed to adopting best practices in its activities: implementation of the principles of aid effectiveness, dialogue and work in partnership , monitoring and evaluation of the results of its development action, application of controls to prevent corruption, fraud, money laundering and the financing of terrorism, integration of social responsibility into both the funded projects and its in-house operations.
By becoming a member of the Global Compact in January 2004, AFD Group selected the main declarations, conventions and standards for equitable and responsible development as the benchmarks for its action:
- The United Nations Charter on Human Rights;
- The Core Conventions of the International Labour Organization;
- The World Bank Group and IFC standards;
- The three “Rio” Conventions (fight against climate change, fight against desertification and biodiversity);
- The OECD and United Nations Conventions against corruption and the international anti-money laundering rules;
- The international ISO26000 standard;
- The law on “New Economic Regulations” (NER) and the “Grenelle Environment” laws for environmental protection;
- The Environment Charter included in the French Constitution;
- And the Declarations of Paris, Accra and Busan on aid effectiveness.
AFD’s in-house Professional Ethics Charter sets out references for the conduct of every officer in the Group, in line with the principles that underscore its mandate.
► Where do the financial resources come from? [+]
AFD receives public resources (grants and interest subsidies) to implement the projects it supports and raises funds on international markets, as well as on its own resources.
The bulk of AFD’s financing comes from the international financial market. AFD is financed through public borrowing and private investments and raises funds at financial market conditions, which are pegged to the rating of the French State.
AFD’s public resources are provided by its supervisory ministries: the Ministry of Foreign Affairs to finance projects via subsidies and co-development projects via grants; the Ministry of the Economy and Finance to cover the cost of the interest subsidies on the loans that AFD allocates to its beneficiaries abroad and in the French overseas provinces; the Ministry of the Interior to reduce the cost of loans allocated in the French overseas provinces.
AFD is both a credit institution and public institution and is subject to all the accountability requirements related to this dual status: statutory statements for the French Prudential Supervisory Authority (ACP) and Financial Markets Authority (AMF), reports to the supervisory ministries, Court of Auditors and national representation and to the OECD’s Development Assistance Committee (DAC).
An International Presence
AFD Group finances development projects in more than 90 countries on four continents. The Group boasts a network of 70 in-country field offices and bureaus, including nine offices in France's overseas provinces and one in Brussels. Among the Group's 1,742 employees, 711 work in the field offices.