AFD’S MAIN FINANCING TOOL

AFD allocates different types of loans. Their terms are determined by the nature of the project and its environment (political, economic, social, environmental impact and context) and the quality of the borrower (sector of activity, rating, guarantees).

FOR THE DEVELOPMENT OF THE POOREST COUNTRIES

AFD uses grants to finance actions in the social sector (health, education), rural and urban development initiatives, and infrastructure projects.

A MECHANISM TO RELIEVE INDEBTED COUNTRIES

The Debt Reduction-Development Contract (C2D) is a tool to restructure the debt of certain countries. In practical terms, once a Heavily Indebted Poor Country has signed a C2D with AFD, the country continues to service its debt until repayment. At each payment on the due date, AFD transfers the equivalent amount to the country in the form of a grant. This amount is used to finance poverty reduction programs.

The direct financial cooperation between AFD and CSOs today covers a wide range of instruments tailored to the specific characteristics of CSOs and their added value: support for innovation (Sectoral Innovation Facility for NGOs, financing from the French Facility for Global Environment, FFEM), financing for operations in fragile, crisis and post-crisis contexts (APCC), and support for their initiatives, via the CSO Initiatives mechanism.

A COOPERATION INSTRUMENT

Open configuration options FEXTE meets the development needs of middle-income countries, feeds into public policy dialogue, and promotes French expertise.

AN INSTRUMENT TO MOBILIZE LOCAL INSTRUMENTS

The guarantees allocated by AFD facilitate financing for small businesses and microfinance institutions in developing countries. They also help French SMEs set up abroad. This means that they are an effective tool for promoting investment and job creation.

A springboard for the external action of French territories

The more development decisions are made at local level, the more they are effective. FICOL is the result of this observation: a mechanism which allows French local authorities to support projects in developing countries.

Following the Paris Climate Agreement, AFD has launched Adapt’Action to support countries seeking technical assistance for the institutional, methodological and operational implementation of their commitments to the fight against climate change.

Peace and Resilience Fund

The Minka fund is AFD’s new instrument to tackle crisis situations. Minka is financed by the Financial Transaction Tax (FTT) and symbolizes our reinforced commitment in the most difficult contexts to support peace and resilience.
Minka is a fund with EUR 100m a year earmarked to finance operations in the Sahel region, Middle East, Central African Republic and countries around Lake Chad.

Launched in March 2017, it includes four regional initiatives:

• Tiwara for Sahelian countries plunged into protracted crises and degraded security contexts: Burkina Faso, Chad, Mali, Mauritania and Niger.
• Sawa in the Middle East for countries affected by the Syrian and Iraqi crises: Lebanon, Jordan, Turkey, Syria and Iraq.
• Ga Songo for the recovery of the Central African Republic. 
• Kouri for countries affected by the crisis caused by Boko Haram: Cameroon, Chad, Niger and Nigeria.

AFD’s green finance label

Sunref is one of the innovative tools developed by AFD to promote the emergence of “green” finance tailored to the needs of economic actors in countries in transition. It aims to allow local financial institutions to take action to fight against climate change. 

Sunref helps develop the practices of financial actors via financial support and technical assistance to facilitate access to green energy and promote the sustainable management of natural resources. The ultimate goal: ensure the development of a low-carbon economy and allow economic actors to adapt to this transformation. 
 

AFD GROUP’S AGRICULTURAL AND RURAL FINANCE LABEL

Provide actors in rural areas in developing and emerging countries with access to appropriate and sustainable financial services, as well as customized technical assistance, this is the objective of AGREENFI. How? By encouraging local financial institutions to take action for the reduction of territorial inequalities and shared growth, while transforming their practices to promote a more sustainable development model.

Project preparation funds are used to finance feasibility studies and technical assistance in order to prepare future investment projects, mainly with climate co-benefits. They target both specific sectors and regions. The objective: ensure that needs are properly identified, while respecting the strategies and standards of the institution which implements them. 
These tools are increasingly common and are generally managed by AFD, but they are financed by other donors, mainly the European Union.