AFD M issions & financial tools November 4th 2011 VIENTIANE.

AFD Missions & financial tools

November 4th 2011

VIENTIANE

november 4th 2011AFD workshop 2

1. AFD at a glance


What is the AFD Group?

An “EPIC” under French law, e.g. a public establishment that has industrial and commercial characteristics. Three French Ministries provide oversight: Foreign and European Affairs Economy, Finance and Industry Interior, Overseas France, Local Authorities and Immigration

AFD, a specialized financial institution subject to banking regulations. and a subsidiary dedicated to private-sector financing, PROPARCO, form the AFD Group

A development-finance and aid organization that implements France’s aid policies, drawing on: Cooperation framework agreements approved in November 2010 A ″means and objectives″ contract, defined with AFD’s supervisory ministries

1


Funding growth continues1


Operating regions and new offices opened in 2010

1


AFD’s international “ecosystem”1


AFD’s French partners and interlocutors1


AFD optimizes public development-aid monies1


Financial instruments1


AFD’s funding by region (€ Million)1


Sectors1


Development results

In 2010, AFD approved funding for developing and emerging countries that will help :

Improve drinking-water supply for 33 million people

Provide primary schooling for 13.4 million children

Refurbish or build transportation systems that will be used by 85.8 million passengers per year

Abate 5 million tons of CO2 annually through energy efficiency

Connect 8.2 million people to the telecommunications network

Provide 3 million people access to traditional or renewable electricity systems

Grant €428 million worth of microloans, benefitting more than 700,000 people

Improve waste collection and disposal services for 2.4 million people

Support agricultural and irrigation projects that will benefit 1.4 million people

1


2. AFD in LAOS


AFD in LAOS

Presentation

Operates since 1994

4 sectors of interventionRural developmentInfrastructures : energy, water Urban development Health

120 M€ of overall commitment Subsidies : 100 M€, 34 projectsLoans : 20 M€

2


AFD in Laos Recent evolutions

Since 2007 : Focus on 3 sectors

Rural development Health Urban development

Current financings 7 projects in activity 17,1M€ in disbursement process

AFD strategy for the future : development of non sovereign activity

2


3. Non sovereign activity


Non sovereign activity

General presentation

A development pushed by :AFD new context tending to reduce the amount of subsidiesImpossibility for AFD to lend money directly to the Laos State

3 available financial tools :LoanEquityGuarantee

Counterparts :Private sectorPublic companiesFinancial sector (banks and MFI)

3


3Non sovereign activity

Project cycle - AFD

Ide

nti

fic

ati

on

C

om

mit

tee

Fin

an

cin

g

Co

mm

itte

e

Bo

ard

Identification Feasibility Appraisal DecisionLegal

negotiationDisbursement

Le

tte

r o

f in

tere

st

No

tifi

ca

tio

n

Fin

an

cia

l a

gre

em

en

t


Corruption, money laundering and terrorist financing

As part of the Financial Action Task Force (FATF), AFD needs

Specific due diligences – Legal documentation – Executive management and members of the board

» Of the beneficiary company» Of the owner’s companies (up to 10% of indirect ownership)

Undertakings to be part of the credit facility agreements– Business Relationships– Licit Origin of the Funds – No Corruption

31/3Non sovereign activity

Compulsory criteria of attribution


Undertakings to be part of the credit facility agreements (extracts)

Business Relationships

The Borrower undertakes not to enter into a business relationship with any person, group or entity which is listed on any of the Financial Sanctions Lists (including in particular the fight against financing of terrorism).

Licit Origin of the Funds

In all circumstances, the Borrower undertakes to promptly notify the Lender in the event that information comes to its attention causing it to suspect that the funds may be of illicit origin.

No Corruption

The Borrower undertakes to ensure that the Project (including the negotiation, award and performance of contracts financed with the Facility) shall not give rise to any Corruption.




Environmental and social impacts

3

Low risk (category C) Medium risk (category B) High Risk (category A)

Environmental and Social Impact

Environmental and social impacts are expected to be negligible (minimal or no adverse impacts)

Environmental and social impacts can be readily identified and standard preventative and/or remedial measures can be prescribed

There may be highly significant, negative and/or long-term environmental and social impacts, the magnitude of which are difficult to determine at the application stage

ExamplesSoftware development companies and consulting firms

General industrial companies and plants on existing sites, telecommunication infrastructures, Brownfield infrastructure project.

Infrastructure and extraction projects

Assessment No environmental appraisal required

Environmental and social compliance check as integrated part of the due diligence and site visit of a potential client

Environmental Impact Assessment or Environmental Audit by a qualified external consultant

Environmental and Social Requirements

Compliance with applicable local laws

Compliance with applicable local laws If necessary, remedial measures to be included into the loan contract

Compliance with applicable local laws Compliance with applicable Word Bank / IFC guidelines and safeguard policies If necessary, remedial measures to be included into the contract



Thank you

AFD M issions & financial tools November 4th 2011 VIENTIANE.

Documents

Transcript of AFD M issions & financial tools November 4th 2011 VIENTIANE.