Frequently Asked Questions

All the answers to your questions about the AFD group
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France, Paris, general headquarters of AFD, Goulard
What is the role of Agence Française de Développement (AFD)? How is it funded? Who benefits from its actions? Find all the answers to the most frequently asked questions here.

Missions

our role, Senegal, training
What is AFD?

Agence française de développement (AFD) is the public agency that implements france's international development and solidarity policy. Development is one of the three pillars of the country's overseas action, alongside diplomacy and defence. Our mission is to contribute to the economic, social and environmental progress of low and middle-income countries. 

In concrete terms, this mission takes the form of providing loans, donations, expertise and in some cases technical assistance. These concern projects with social and environmental impacts in many different areas: climate, biodiversity, peace, education, urban planning, healthcare, digital technology, and more. The final objective is always to improve the day-to-day living conditions of the population and prepare more effectively for the future. AFD's funding projects are therefore solidarity development investments.

More about Development Aid
 

Why does AFD invest abroad rather than in France?

Climate change, conflict, pollution and epidemics not stop at borders. In a world where everything that happens at the other end of the world impacts our lives, it is in all our interests that the world be a more stable place, that inequality be reduced and nature preserved. 

One example among others: the extreme poverty that is still endemic in the sahel has enabled terrorist groups to prosper, which directly threaten france and its inhabitants. AFD provides a powerful response to this problem through ambitious development programmes in the education and healthcare fields in particular. These are both short and long-term actions that are indispensable to stem the poverty that provides fertile ground for all kinds of instability.
 
We also believe that certain resources (water, forests, biodiversity, etc.) must be managed at a global level, on the global commons model. These resources are shared, managed and maintained collectively by a community that considers ownership as usage, not appropriation.
 
Participating in the development of emerging countries means participating in the growth of an economy that benefits first and foremost the inhabitants of the countries concerned, but also indirectly employment in france with new openings for our companies, in strict compliance with local regulations and standards. More generally, france's development policy contributes to france's global reach and influence.
 

Why does AFD intervene in countries with non-democratic regimes?

We believe it is essential to support the populations that face the greatest poverty, difficulties in accessing healthcare or the consequences of climate change, wherever they are in the world and whatever the political regime in place.

Where possible, we work with the existing authorities to encourage and support governance-related reforms and precisely to foster the extension of human and social rights. 

Finally, AFD does not only work with states. Over half our funding is granted to non-state actors such as companies (see the website of proparco, our subsidiary dedicated to the private sector), ngos or local authorities (regions, cities, etc.) Which work in the interests of the population, especially where the state is weak or failing.
 

Financial resources

Frequently asked questions, Agence Française de Développement, financial resources
How much does AFD cost the French taxpayer?

AFD is a public institution, but it does not receive any operating subsidies from the state. AFD is largely self-financing thanks to its lending activities, and it even pays the state, its shareholder, a few million euros in dividends every year.

However, the share of AFD's turnover that is devoted to donations (about 15% of the total), which comes from the state and other donors, such as the European Union, is money that comes directly or indirectly from the French taxpayer. This money is entrusted to AFD, which has the responsibility of sharing it out between projects with high social and environmental impacts.

AFD's hybrid status, as both a bank and a development agency, is what enables France to pursue an impactful development policy - one that is useful to local populations, the planet and France; and all at a low cost to the taxpayer.
 

Where does AFD's money come from?

About 85% of AFD's overall activity consists of loans granted to partners. This money is exclusively borrowed on the financial markets, on the same favourable borrowing terms as those of the French state; it does not come from the taxpayer.

Part of the interest generated by these loans goes to pay AFD's operating costs: staff wages, travel expenses, the running of our 85 field offices around the world, etc. Another part is set aside to cover the risk of default, by increasing our equity. Finally, AFD makes a net profit, although it is very modest compared to our overall turnover. In 2018, it amounted to €145m, of which €29m was paid to the state, while the rest went to supplement our equity. Unlike a commercial bank, our aim is not to generate financial profits from our business.

The remaining 15% of AFD's total turnover comes from the state budget, the European Union and, to a lesser degree, some other donors. This money is entirely dedicated to donations. These donations serve to support the poorest countries, based on a list of 19 priority countries drawn up by the French government (see p.12 of the record of decisions of the French interministerial committee for international cooperation and development [in French]). We also intervene in areas that have been defined as priorities by France, with the agreement of the countries concerned: healthcare, education, access to water and sanitation, agriculture, etc.
 

Does the money spent on the programmes really benefit the people it is intended for?

AFD funds development or technical assistance programmes put together and implemented by partners with recognised competency in the relevant sphere of action (NGOs, states, local authorities, foundations, companies, etc.), which we subject to scrupulous checks.

Every programme funded is designed to benefit the populations that need it most, in many sectors: education, healthcare, the fight against climate change, gender equality, access to water, transport supply, sport, etc. The investments help to create local jobs. 

Throughout its monitoring of a project, AFD ensures that it is being implemented correctly and it has internal procedures enabling it to interrupt a programme or a funding scheme if there is evidence of corruption or if the works or initiatives originally planned have not been undertaken.
 

Climate

Ashegoda windfarm, Ethiopia
Does AFD fund any programmes that pollute the planet?

AFD makes its funding conditional upon the implementation by project initiators of a continuous and systematic process of environmental and social evaluation. 

This means assessing the environmental and social impacts of projects, proposing appropriate measures intended to avoid negative impacts, or when they are inevitable, to reduce or mitigate them. We also monitor the implementation of these measures during the implementation phase of the project and we conduct ex post evaluations of the effectiveness of the measures proposed (find out more about our policy on environmental and social risk management).

We also have a policy of not funding projects that are contrary to our sustainable development objectives: coal-fired power stations without co2 capture and storage, products that destroy the ozone layer, pesticides, herbicides, etc. (see our exclusion list).

We have also been committed since the end of 2017 to the goal of becoming the first "100% Paris Agreement" development agency. In practice, we ensure that every programme funded is consistent with low-carbon development and the commitments made at cop 21 by the country in which it is conducted. This is an ambitious approach that will take time: the roadmaps of the countries that signed the paris agreement are not all known or detailed yet.

At the same time, we make sure that at least half of our funding in foreign states is devoted to "climate co-benefit" projects. This funding must involve reducing greenhouse gas emissions below a certain level or positive impacts in terms of climate change adaptation. 

Since 2017, an online complaints mechanism has enabled any individual or group of people affected from an environmental or social point of view by an AFD-funded project to file a complaint.
 

Transparency

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How are the projects funded by AFD chosen?

AFD responds to requests from its partners whilst ensuring that the projects selected benefit populations in the areas identified by the government as priorities for France’s development and solidarity policy: in particular these are the climate, the reduction of inequalities, health and education.

To be more precise, when an application for funding, whether a loan or a donation, is submitted to us, it systematically goes through several levels of validation within AFD: an opinion is issued on the sustainable development aspect, a bilan carbone® study is done, and then the project initiator's action plans are assessed by our specialist teams. The aim is to evaluate the impacts, risks and any points requiring vigilance. The entire process takes several months.

Finally, the application is put to the board of directors (whose members are elected officials, representatives of the ministries and civil society) before being finally validated.

AFD declines to fund certain projects for ethical, regulatory, environmental and social reasons. When we make those decisions, we rely on an exclusion list and on our sustainable development policies, which reflect our commitments and France’s priorities in terms of international cooperation and solidarity. 

As part of its transparency policy, AFD is the first bilateral development bank to publish a list of the projects funded on a monthly basis.
 

How do you check that the objectives have been met?

Ahead of a project, the project initiator's commitments are recorded in the funding agreement signed with AFD. 

Once it gets underway, our specialised teams monitor its implementation, on the basis of reports provided by the project initiator or field missions in order to ensure that the commitments are being met. Once the project is completed, scientific evaluations are carried out  (local statistics, field surveys, and independent studies) to check that the objectives have been met. 

50% of our projects will be evaluated by 2020. AFD is working hard to increase the number of evaluations it carries out in order to draw all the relevant conclusions, in a process of continual learning.
 

Who monitors and checks the actions of AFD?

As a public institution, we are given a political and strategic framework to work within by the French state. This is defined by the interministerial committee for international cooperation and development (CICID), whose secretariat is run jointly by the ministries for Europe and foreign affairs, the economy and the interior. The cicid generally meets once a year to decide on French development aid policy.

As for AFD's governance, it rests on a set of structures guaranteeing the transparency of its operations and its good management. Its board of directors thus consists of six representatives of the state, five members with relevant qualifications, four members of parliament and two members elected by its staff. 

Several state agencies are involved in evaluating our actions: inspectorate general of finance, inspectorate general of foreign affairs and the court of auditors. AFD's executives are also regularly called to appear before the foreign affairs committees of the national assembly and the senate. As a credit institution, we are also under the supervision of the prudential supervision and resolution authority (ACPR), which is attached to Banque de France. In addition, AFD has been reinforcing its policy of transparency and accountability for several years, thanks among other things to an open data portal and to the publication of the amount and objectives of the funding granted. Every citizen can therefore find out all about the programmes and projects supported by AFD.
 

Is AFD a tool of "Francafrique" - France’s "special relationship" with its former african colonies?

AFD is not involved in any way in the political process in the countries where it funds projects. We do not fund any election campaigns and we do not support or favour any candidates or any regime over another.

In addition, AFD's funding is entirely "untied", meaning that it is not conditional on the selection of French companies to implement the projects. The programmes funded by AFD are implemented by companies selected through calls for tender, either national or international.

More generally, whatever the countries or continents, we constantly endeavour to act in a totally transparent way in all everything that we do.