Finance projects

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.

To provide support for some 30 of the highest emitting and most vulnerable developing countries in their transition to a low-carbon and resilient development model, AFD has created a dedicated facility: the 2050 Facility.

To strengthen the adaptation of the Pacific territories to the impacts of climate change and better protect their biodiversity, the Kiwa Initiative is supporting projects that promote nature-based solutions via grants and technical assistance.

The regional project window managed by AFD finances projects of over €1.5 million. Applications are submitted online and analyzed every six months.

The Peace and Resilience Fund, or “Minka,” was launched in 2017. This AFD tool is dedicated to peacebuilding as part of the French strategy “Prevention, Resilience and Sustainable Peace.”

Minka provides €250 million per year to support the prevention of violent conflicts and crisis resolution. It works in the medium term to implement projects in the Sahel, the countries around Lake Chad, the Central African Republic, and the Middle East.

Minka targets four critical conflict basins via four initiatives: Minka Sahel, Minka Lake Chad, Minka CAR, and Minka Middle East.

Sunref, an AFD Group green finance label, helps economic actors in developing and countries seize the opportunities offered by energy and environmental transitions and encourages local financial institutions to finance them.

Loans, investment grants and technical assistance: Sunref is a customized product that finances companies’ ecological transition projects.

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.