[NA]

The French army’s deployment area in Afghanistan covers the province of Kapisa and the district of Surobi in Eastern Kabul and concerns roughly 500,000 people. This area has received little support from international actors due to security reasons and its remoteness, leaving communities completely impoverished. In order to address these needs, in 2009 France launched a €15m civil-military cooperation program for agricultural and rural development in this area. In 2010, this program was completed by a €16m program and it was decided to pursue it and extend it in 2011. The agricultural actions will improve the food situation in the region and will increase monetary incomes for families. Access to electricity will give the region greater economic development potential. Communities will have wider access to health care thanks to improvements in the way hospitals operate and education will be improved with the renovation and equipment of school facilities and teacher training.

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2010: a new year of growth to support development

With €832 million of budget resources allocated by the State, AFD provided €6.8 billion of project financing in 2010, i.e. an 11% rise on 2009. Its activity accounted for 28% of France’s official development assistance. AFD also paid back €104 million of dividends to the State.

Africa remains the priority with €2.1 billion of financing in 2010.

Two-thirds of the financing break down between infrastructure, urban development, productive sectors and agriculture.

In 2010, AFD’s financing will contribute to:

• Improving drinking water supply systems for 33 million people
• Getting 13.4 million children into primary school
• Upgrading or building transport hubs that will be used by 85.8 million passengers a year
• Supporting energy efficiency by saving 5 million tons of CO2 a year
• Providing access to electrification for 3 million people
• Allocating microfinance loans that will benefit just over 700 000 people
• Supporting agricultural or irrigation projects that will benefit 1.4 million people

2011: consolidation of economic model

Dov ZERAH, Chief Executive Officer of AFD: “AFD has experienced a veritable revolution over the past few years. It has become a key player in development with an activity that has tripled in five years. Today, a new phase is beginning with the consolidation of our model.”

In the coming years, AFD will be focusing its activity on three priority areas:

• Sub-Saharan Africa:  60% of resources allocated to AFD by the State will be earmarked for this region, particularly for the sectors of agriculture and agro-industries, infrastructure, education and health.
• The Mediterranean: AFD will be supporting the recent developments in the region by scaling up its operations in Mediterranean Basin countries, particularly in the productive and vocational training sectors.
• Emerging countries: AFD will be supporting these countries via loans with a low level of concessionality in order to encourage them to set out on a growth path that respects the environment more and is more inclusive.

Consolidating the model requires stabilizing AFD’s level of activity, which is expected to reach €8 billion by 2013. AFD set up a Risk Department in 2011 in order to improve risk management. It has also reinforced its human capital with 125 recruitments in 2010.

Dov ZERAH: “Beyond financing, it is our expertise that our partners are seeking. AFD will also be continuing to actively provide input to international debates through its knowledge production. We will, at the same time, be forging an increasing number of partnerships with other development players such as NGOs, local authorities, private foundations, or again multilateral banks. They help increase the outreach and effectiveness of our actions. In a globalized world, the only winning strategies are cooperation strategies.”

In 2011, AFD will be celebrating the 70th anniversary of its creation in 1941 by General de Gaulle. AFD will be marking the occasion by organizing events to meet the French public in order to raise their awareness of North-South issues and allow them to learn more about development results. A travelling open-air exhibition called “Objectif Développement”, designed in partnership with Magnum Photos, will be launched in Bordeaux on 21 May 2011. It will be travelling to all the major cities in France throughout the year.

 
Agence Française de Développement (AFD) is a public development finance institution that has been working to fight poverty and support economic growth in developing countries and the French Overseas Communities for 70 years. It implements the development policy defined by the French Government.
With agencies in over 50 countries, AFD finances and supports projects that improve people’s living conditions, promote economic growth and protect the planet: getting children into school, support for farmers and small businesses, water supply, tropical forest preservation, fight against climate change…

Haiti: reconstruction of Port-au-Prince hospital

AFD’s Board of Directors approved a €13 million grant to the Republic of Haiti for the reconstruction of the Haiti State University Hospital (HUEH) in Port-au-Prince.

On 12 January 2010, an earthquake of magnitude 7.3 shook the Port-au-Prince region for 35 seconds, leaving 250,000 people dead and 400,000 injured. The earthquake had a devastating impact on infrastructure. Over 1,300 education establishments and over 50 hospitals and health centers either collapsed or became unusable. France reacted to this catastrophe by offering aid for the reconstruction of the HUEH, a cottage hospital with 700 beds located in downtown Port-au-Prince.

Haiti: reconstruction of Port-au-Prince neighborhoods

AFD’s Board of Directors approved a €6.46 million grant to the Republic of Haiti for the first phase of the Integrated Development Project for Informal Neighborhoods in Port-au-Prince.

Prior to the 12 January 2010 earthquake, over a million inhabitants of the metropolitan area of Port-au-Prince were living in precarious neighborhoods. Many of these inhabitants are now homeless. AFD identified two areas for the implementation of an urban renovation project – the neighborhoods of Martissant and Baillergeau – that meet the criteria of being both urgent and able to play a demonstrative role.

The project comprises three components: the urban renovation of neighborhoods, which will be implemented via a comprehensive approach (housing, accessibility and circulation, networks, waste management, environment, public areas, community life…), along with actions to refurbish housing in the form of supervised self-build, and to secure land tenure for dwellings. In partnership with the Cities of Paris and Montreal, it will support the municipality of Port-au-Prince by rebuilding the municipal administration and providing it with the tools it needs for its development. Finally, it will support the Interministerial Committee for Land Use Planning, which the Haitian government has put in charge of helping the authorities to define land use planning strategies.

Haiti: budget support

AFD’s Board of Directors approved a €15 million grant to the Republic of Haiti for the payment of its budget expenditure, including €5 million which will be paid directly via the Multi-donor Haiti Reconstruction Fund (HRF), managed by the World Bank.

With GDP per capita at roughly USD700, Haiti is the poorest country on the American continent. Since 2004, the successive governments have conducted cautious policies in the framework of agreements with the IMF. Economic activity had shown encouraging signs, but several exogenous shocks in 2008 brought the beginnings of this recovery to a sudden standstill (rise in energy prices, food price crisis, hurricanes). On 12 January 2010, Haiti experienced one of the worst natural disasters in its history: an earthquake destroyed practically the entire city center of Port-au-Prince and four neighboring towns, with the loss of some 250,000 lives. The country is today in a situation of extreme precariousness: GDP is expected to fall by 8.5% in 2010 and budget support is essential. France is participating in the reconstruction of Haiti – in addition to the cancellation of the bilateral debt (€56 million) – by providing €40 million in the form of budget support for the years 2010 and 2011. In April, an initial amount of budget support of €5 million was approved by AFD.

Madagascar: ARIZ II guarantee to BOAM for SME financing

AFD’s Board of Directors approved funding that aims to guarantee financing granted by the Bank of Africa Madagascar (BOAM). The guarantee package expected to be allocated amounts to a maximum of MGA15 billion (exchange value with an upper limit fixed at €6 million).

ARIZ is an insurance mechanism for private investment financing risks. The new ARIZ II mechanism, with the partial portfolio guarantee, allows banks to develop their lending activity for SMEs. This financing aims to support economic growth, promote the development of the private sector and trade in the country, and help preserve and create employment. Two portfolio guarantees have already been set up in Madagascar with MCB and BFV-SG.

Vietnam: urban infrastructure in Da Nang and Can Tho

AFD’s Board of Directors approved €20.5 million of financing (€20 million loan and €500,000 grant) to the Republic of Vietnam to finance priority infrastructure and urban equipment programs in Da Nang and Can Tho.

In Vietnam, urbanization is not restricted to the megalopolises of Hanoi and Ho Chi Minh City. It also affects cities in the urban areas of the two deltas (Mekong and Red River), in the Center and Southeast. The financing will be allocated to the Local Development Investment Funds of the cities of Da Nang and Can Tho, which have proved to be major engines of socioeconomic development in the country. It will finance urban environmental infrastructure (waste treatment, sanitation and drainage, drinking water supply…) and the integration of vulnerable populations into the cities (housing for people with modest incomes, vocational training).

Ghana: global budget support

AFD’s Board of Directors approved a €21.687 million grant to the Republic of Ghana to contribute to financing its budget.

Ghana has recorded strong economic performances in recent years, with average annual GDP growth at over 6% between 2004 and 2008. The implementation of voluntarist policies by the Ghanaian authorities has led to significant progress in terms of economic and social indicators. Despite this progress, considerable development challenges remain, particularly in terms of improving the way in which development is balanced among the different socioeconomic groups and nationwide.

This financing is being allocated in the framework of the Debt Reduction-Development Contract (CDD) signed in February 2008 between Ghana and France for the period 2008-2013. It is contributing to the multi-donor global budget support program.

Morocco: high-speed rail line

AFD’s Board of Directors approved a €220 million loan to Morocco’s National Railway Operator (ONCF) for the creation of the country’s first High-Speed Line (HSL).

The HSL project stretches over a distance of 200 km and will link Tangiers up with the city of Kenitra, near the country’s political and economic centers. The project will cost €1.8 billion and is expected to be commissioned by the end of 2015. ONCF, a public establishment under the supervision of Morocco’s Ministry of Transport, benefits from support from French engineering and the equipment will be supplied by Alstom. Much attention has been paid to the environmental and social issues relating to the project and ONCF will be developing actions specifically designed to enhance its positive economic and urban impacts. This HSL will provide a powerful tool for the development of the country’s northern region.

Turkey: SME energy investments

AFD’s Board of Directors approved a €100 million loan to Turkiye Halk Bankasi (Halkbank) to finance SME energy efficiency investments.

Turkey’s growth is based on high fossil fuel consumption. In a situation whereby the cost of these resources is increasing and greenhouse gas emissions need to be limited, Turkish SMEs are exposed to risks of economic deterioration. SMEs find it difficult to access energy efficiency investments due to a number of technical and financial brakes, whereas developing renewable energies could make a significant contribution to reducing the country’s carbon footprint. Thanks to its experience in corporate social responsibility, Halkbank - Turkey’s seventh largest commercial bank – should be in a position to facilitate these investments.

WAEMU countries: extension of health risk coverage

AFD’s Board of Directors approved a €5.4 million grant to the WAEMU Commission to support the extension of health risk coverage in the Union’s Member States.

In developing countries, it is financially difficult for a large part of the population to access health care services. This partly explains why so few people use public health structures. Over the past five years, free treatment for certain health care services has been developing in WAEMU Member States, and there is ongoing work to define national strategies for health risk coverage.

The project will assist WAEMU Member States in the definition and implementation of their national strategies to extend health risk coverage. By increasing the number of people benefitting from such coverage, there will be extremely considerable economic impacts (greater capacity to pay for health care, which will boost the health sector) and social impacts.

Palestinian Authority: wastewater treatment plant in Gaza

AFD’s Board of Directors approved a €4 million grant to the Palestinian Authority for the construction of a regional wastewater treatment plant in the northern Gaza Strip.

The Beit Lahia wastewater treatment plant receives wastewater from the 250,000 inhabitants of the municipalities of Jabalia, Um Al Nasser and Beit Hanoun. The plant was built by the Israelis in 1977 and today operates at over four times its nominal capacity. The fact that there is no outlet means its effluents have spread over neighboring land and formed a lake, which in 2009 covered an area of up to 35 ha. In 2005, AFD, the World Bank, Belgian and Swedish cooperation and the European Commission mobilized USD46 million of financing, at the request of the Palestinian Authority, for the implementation of a two-phase project. The first phase provided for the construction of a pumping station in Beit Lahia.

The project aims to implement phase B of the project, comprising the construction of a biological treatment plant in Jabalia with a capacity of 35,600 m3/day. This plant is expected to meet all the needs of the northern area of the Gaza Strip by 2015. An agricultural system will also be set up to recover treated wastewater. It will have highly positive impacts in terms of improving public health conditions and protecting water resources.

Lebanon: developing cultural heritage in Tyr and Tripoli

AFD’s Board of Directors approved a €21 million loan to the Republic of Lebanon for the second phase of a Cultural Heritage and Urban Development Program in Tyr and Tripoli.

Lebanon has a rich and diversified cultural heritage, which bears witness to the numerous civilizations that have developed in the country. Unfortunately, in addition to the damage caused during periods of war, this heritage has been widely neglected for a number of years. In response to this situation, the Cultural Heritage and Urban Development Program initiated by the World Bank in the early 2000s has been designed to revitalize historical centers from both an economic and social perspective.

The financing concerns the second phase of this program. In Tyr, it will refurbish the souks surrounding the port, extend the coastal promenade, refurbish a caravanserai and turn it into a crafts center and a former observation tower will be turned into a tourist office. In Tripoli, it will refurbish the souks, harmonize the facades of buildings along the river and refurbish traditional dwellings.
Syria: urban development and environment

AFD’s Board of Directors approved €20.4 million of financing (€20 million loan and €400,000 grant) to the Syrian Arab Republic to finance its Urban Development and Environment Program.

The Syrian government wishes to support rapid urban growth and develop a local policy for regional land use planning via a decentralization policy. AFD has participated in the Municipal and Environment Infrastructure Program led by the European Investment Bank. This project aims to finance several priority environment-oriented urban development projects, which also have social and economic targets, in various cities or governorates (waste management, traffic and mobility, sanitation, drinking water supply, tourism…). The program will also strengthen the technical and operational capacities of the governorates and municipalities and will be part of a devolution and decentralization process which is at its beginnings in Syria.

Afghanistan: promoting beekeeping

AFD’s Board of Directors approved a €3 million grant to the Republic of Afghanistan for its National Beekeeping Promotion Program.

In Afghanistan, less than 10% of beekeeping potential is exploited, whereas the country has an orchard with a production capacity that could be raised by developing beekeeping. Promoting an industry that supplies high added-value products will contribute to food security and increasing incomes in rural areas. The activities will be based on four components: training and information for public and private players; input supplies; developing products and the role of hives; professionally structuring the industry.