AFD and European Union (EU) institutions have decided to strengthen their partnership, with the aim of enhancing their effectiveness in development assistance and the fight against extreme poverty.

Our teams are driven by common convictions, and they work together towards the same objectives: delivering quality and consistent aid, coming up with new solutions to finance development, and delivering action with a high level of operational flexibility.

Beyond the question of financing, AFD and the EU also have two other concerns: feeding into the European debate on development and promoting common values in the field.

A strategy driven by the SDGs and Paris Agreement

Today, the European Union and AFD share four priorities:

• focusing actions on priority countries and sectors;
• developing projects which are consistent with all public policies;
• contributing to enhancing donor coordination; and
• enhancing the effectiveness, accountability and transparency of financial commitments.

These priorities fall within the broader framework of the Paris Climate Agreement and the 17 Sustainable Development Goals (SDGs) adopted by the international community in 2015.
 

Complementarities in action

As a financial institution, AFD monitors the implementation of projects financed with funds delegated by the EU: we support local partners (governments, local authorities, private sector, CSOs) and ensure that the budget is properly executed (procurement, payments, project supervision). We are responsible for the successful implementation of the project, and fully accountable for it to the European Commission.

Meetings and staff exchanges are organized between the teams of AFD and the European Commission.
 

The Commission has accredited some thirty European national agencies to manage European funds earmarked for development, including AFD. The timing is better than ever for increased aid coordination among donors and promotion of innovative means of financing, such as blending loans and grants.

INNOVATIVE SOLUTIONS FOR FINANCING DEVELOPMENT

Loan-grant blending: a major leverage effect

Since 2007, a new European mechanism allows loans and grants to be blended to finance development projects on a larger scale. These “blending facilities” are especially used to support infrastructure projects and MSMEs, but also energy, social services and agriculture sectors.

Thanks to its major leverage effect, this solution helps release loans from public and private entities, reduce the cost of borrowing for beneficiaries, and/or provide technical assistance throughout the projects.

Over half of the 1.4 billion euros of funds delegated to AFD between 2008 and 2016 came from blending mechanisms (823 million euros). These funds have helped raise over 15 billion euros worth of investments.

Blending facilities are sub-divided into major regions of intervention: Africa, Latin America, Asia, European Neighborhood (Eastern and Southern), as well as the Caribbean and Pacific regions.

Delegated and transferred funds

AFD is one of the European development agencies accredited by the Commission to manage European delegated funds. By increasing delegation agreements (from the EU to AFD) and fund transfer agreements (from AFD to the EU), the two institutions are showing the way in terms of complementarity and distribution of work among European donors.

Joint programming

The European Union and its Members States have decided to take up the challenge of joint programming of their aid (Capacity4Dev) to improve aid predictability, increase the number of joint initiatives in the field, strengthen distribution of work, as well as to simplify procedures and reduce transaction costs—both for donors and beneficiaries.

Trust funds to pool resources

Since 2012, the European Commission has been authorized to create and manage theme-based multi-donor funds and crisis/post-crisis funds. The aim is to expand the range of tools in the European aid system. These trust funds are fueled by European grants and voluntary contributions from Member States and third countries. This innovation increases coordination by pooling European resources, expertise, and implementation capacities. AFD is fully committed.

Four trust funds have been set up:

• the Bêkou Fund for the Central African Republic (2014),
• the Madad Fund for the Syrian refugee crisis (2014),
• the Emergency Trust Fund for Africa (EUTF) (2015), and
• the fund for the peace process in Colombia (2016).

From among all these trust funds and since their creation, 192 million euros has been transferred to AFD and distributed as follows: two Bêkou Fund projects (16.1 million euros); eleven EUTF projects (144.4 million euros), and two Madad Fund projects (31.4 million euros).

AFD also contributes actively to the new EU trust funds. For example, we have transferred 48 million euros to the Commission for projects in Haiti and Guinea.

The EFSD: sharing risks

The European Fund for Sustainable Development (EFSD) was launched in 2017. It comprises existing blending facilities for Africa and the Neighbourhood and has created a new innovative guarantee mechanism. With an initial budget of 3.35 billion euros, it is expected to leverage up to 44 billion euros of private-sector investments in countries facing challenging environments. Risks are shared with the Commission: the guarantee is transferred to intermediary financial institutions, such as AFD, which support the ultimate beneficiaries (often companies) through loans, guarantees, or other financial instruments.

The AFD’s representative office in Brussels opened in 2004, to create a priority partnership with European institutions and partners.

FEEDING INTO THE DEBATE

In addition to jointly implementing projects, European development aid actors are also contributing to the development debate in Brussels through workshops, conferences and panel discussions, with the aim of enhancing mutual knowledge and working in a more concerted manner. These occasions for exchanges are organized at the Parliament or Commission and contribute to strengthening ties. They also provide an opportunity to showcase the added value of European ideas and expertise in the development community.

SCALING UP DIALOGUE WITH MEPS

AFD is eager to enhance and improve European cooperation and share its expertise on specific topics. As such, we regularly organize events at the European Parliament. In the format of panel discussions, we present the diversity of our activities and operational tools, as well as our vision of the European aid system to MEPs and representatives of the professional and academic world.

AFD PARTNERS

European Commission

The European Commission (EC), and especially its directorate-generals DEVCO (International Cooperation and Development) and NEAR (Neighbourhood and Enlargement) are AFD’s foremost partners in Brussels. We are subject to an audit, which since 2008 has allowed us to implement projects for the EC using our own procedures.

European Parliament

The MEPs who are members of the Development Committee (DEVE), Foreign Affairs Committee (AFET), and the ACP-EU parliamentary delegation deal with development and international cooperation, thereby speaking up for European citizens on these themes. AFD occasionally works with European Parliament  (EP) and its members, especially through the ID4D conferences held within the EP.

Think tanks

The Development Policy Forum (DPF) was created in 2008. AFD is a founding partner, as are the German development agency (GIZ), the European Commission, the World Bank, the United Nations, and the Japan International Cooperation Agency (JICA). Led by Friends of Europe, an independent European think tank that seeks to generate discussion and change in Europe and beyond, DPF organizes conferences on the new models of development. In this way, the AFD managers and experts who regularly participate in its conferences have the opportunity to showcase our ideas and publications to European institutions.

Furthermore AFD has launched partnerships in recent years with other European think tanks, such as ODI, FERDI and IDDRI.
 
EDFI, the network of development finance institutions

The 16 development finance institutions that are members of EDFI work together to implement common actions, especially in the form of cofinancing for the private sector. Proparco, AFD’s private-sector subsidiary, is a member of EDFI.

The Practitioners’ Network

The Practitioners’ Network  was set up in 2007 under the impetus of AFD and KfW. It brings together 15 European development agencies and the European Commission (as an observer member). While this is an informal community of European bilateral actors, it meets regularly to pursue two main objectives:

• to facilitate the sharing of knowledge and the exchange of experiences among its members and, based on this, to promote joint actions and positions;
• to promote dialogue and help strengthen the partnership with the European Commission, as well as to foster the partnership thanks to presentations of concrete experiences on implementation of European aid policy via bilateral agencies.

AFD teams co-lead two working groups (“Effective Partnerships” and “Crises, Fragility and Conflicts”) and are actively involved throughout the year.

The 15 members of the network are: ADA (Austria), AECID (Spain), AFD (France), British Council (United Kingdom), Camões (Portugal), CTB (Belgium), CzDA (Czech Republic), Expertise France, FIIAPP (Spain), GIZ (Germany), LuxDev (Luxembourg), SIDA (Sweden), SNV (the Netherlands), SlovakAid (Slovakia) and AICS (Italy).
 

The “EDDs” are organized by the European Commission and have become a key event for development actors. This forum has been held annually in Brussels since 2006, along with researchers, analysts, civil society representatives, Heads of State, directors of development banks, private-sector business leaders, as well as European Commissioners and MEPs.

AFD is increasingly active in the EDDs thanks to its heightened cooperation with the European Commission. Our teams participate actively in the forum by organizing conferences and exhibitions there in order to disseminate AFD expertise.