Launch of the “Outre-Mer En Commun” Initiative: €1 Billion to Support the French Overseas Territories during the Covid Crisis

The Covid-19 pandemic has affected almost all the overseas territories. The economic and social impacts are significant.  A strong response is needed, in addition to the essential measures already taken to protect the health of the population and the economy of these territories.  The “Outre-mer en commun” initiative contributes towards meeting the health, economic and social issues by supporting the private and public sectors in the overseas territories in three ways.

An initiative in response to the health emergency

AFD is strengthening regional epidemic surveillance and response networks and providing rapid support to health systems in the French overseas territories using several tools:

• AFD is strengthening its support for regional epidemiological surveillance networks (for example, the €2 million grant awarded in April to the Indian Ocean epidemiological surveillance and investigation network)
• AFD, a long-standing financial partner of hospitals in the French overseas territories, will contribute towards the reform and investment recovery plan announced by the government.

With almost €750 million of outstanding loans (public and private), AFD is the leading donor to public health establishments in the French overseas territories. With such a position and its knowledge of the field, AFD is continuing to mobilize in support of local health stakeholders.

Mobilizing to support the economic fabric

AFD is committed to helping public and private stakeholders cope with the economic and financial consequences of the crisis:

• AFD is giving favorable consideration to requests to extend the maturity dates of its loans to local authorities and businesses by 6 months, which will involve at least several tens of millions of euros
• It is accelerating disbursements for existing financing (up to €250 million)
• It is also accelerating the annual budget loan instructions of the large local authorities, which could involve at least €250 million in outstanding loans
• AFD is setting up 20-year emergency investment aid loans for overseas local authorities, with a 3-year grace period and accelerated disbursement terms (40% upon signature), based on projects selected in local authority-State contracts
• At the government's request, it is studying the possibility of granting refinancing lines for local banks in overseas France, as it did after the 2008 financial crisis
• In Mayotte, starting in the second half of 2020, it will experiment with a pre-financing loan scheme for the FCTVA for municipalities, enabling them to initiate their investment projects more easily, with the financial support of the Ministry for Overseas France. An extension to other overseas departments and regions will be considered in 2021 if the results of the Mahoran experiment are conclusive
• It will speed up the instruction of a credit line for the ‘Association pour le Droit à l'Initiative Economique’ (ADIE) to strengthen its micro-credit capacities in support of the most fragile VSEs in overseas France
• More specifically, in the Pacific zone at the request of and with the guarantee of the State, AFD has granted a €240 million amortizable loan to the New Caledonian collectivity to meet its urgent cash flow needs. AFD is also studying, in close consultation with the State, the means of support to be provided to the Government of French Polynesia in view of the economic and financial impacts of the crisis

An inclusive and low-carbon recovery plan

As an agency implementing Sustainable Development Goals in Overseas France, AFD is promoting an inclusive and low-carbon recovery to accelerate the 5.0 trajectories of the French Overseas Territories, in particular through the new Overseas France 5.0 fund:

• With this fund, AFD will support public investment programs for sustainable recovery, notably through subsidized loans
• AFD is financing a study on "Low-carbon and inclusive recovery in the Overseas territories" in order to determine which actions for a sustainable and resilient post-crisis recovery should be financed as a priority

“Deeply multifaceted, the coronavirus crisis can only be overcome with response plans specifically adapted to each of our territories and enabling decisive progress towards sustainable development. This is the purpose of the "Outre-mer en commun" initiative that Agence Française de Développement, a long-standing partner of the overseas stakeholders, is proud to implement at the request of the government. AFD is supporting the French Overseas Territories in terms of health, by mobilizing in favor of private sector stakeholders and with the ambition of an inclusive and low-carbon recovery to accelerate the Overseas Territories 5.0 trajectories”, said Rémy Rioux, AFD Chief Executive Officer.

“The Overseas Territories have been deeply affected by the Covid-19 crisis, which has exacerbated pre-existing health, social and economic tensions everywhere”, said Annick Girardin, Minister for Overseas France. “As Minister for Overseas France, my role is not just to provide immediate responses to the crisis. 

"I must also propose a framework for building the overseas societies of the future. This initiative by AFD and the French Ministry for Overseas France is therefore vital to strengthen the immediate resilience of the economies in Overseas France in the face of the crisis, but also to think about and prepare for the future of the territories, a future ‘Outre-mer en commun’, a future ‘Outre-mer 5.0’".