Annual Report - Agence FranÃƒÂ§aise de DÃƒÂ©veloppement

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AFDA MULTI-ACTOR PROCESSWORKING WITHOTHER DONORSAFD works alongside other donors by poolingskills, broadening the financial and technicalcapacities brought to certain projects, andformulating common positions within internationalbodies.AFD’s development aid policy mobilizes multiple bilateraland multilateral donors; it also assumes new forms,such as cofinancing or loans combined with grants, tomeet growing financing needs.These needs increasingly require donors to work intandem, multiplying the number of cofinanced projectsto extend their financial and technical capacities. Recognizingthis challenge, some donors have followed theexample of the Asian Development Bank (ADB) by developinga cofinancing and partnership strategy. For thefirst time, AFD has begun formalizing goals and objectivesfor its partnerships, a process it will complete in2013.A VARIETY OF PARTNERSHIPSBy partnering with bilateral donors (such as KfW, JICA,AusAID) and multilateral lenders (such as EIB, EBRD,the World Bank, Asian Development Bank [ADB], SouthAfrica Development Bank, and the Inter-America DevelopmentBank [IDB]), AFD meets three objectives:• Maximizing leverage and economies of scale byfinding new sources of funds to compensate for theconstraints in grants and subsidies.• Targeting partnerships according to AFD strategiesand the comparative advantages to the prospectivepartners – for example, by working with ADB or IDBto extend operations into Asia or Latin America,respectively.• Formulating common positions within internationalbodies, for example by promoting strong green growththrough the International Development Finance Club(IDFC).Brussels – Launch of mutual recognition proceduresbetween AFD, EIB and KfW.In 2012, out of 115 projects receiving loan, projectgrant,budget-support or debt-relief developmentfinancing, AFD cofinanced 48 (or 42%) with otherdonors. Some of AFD’s financing lay beyond the scopeof cofinancing measurements, which do not cover allGroup activity; nonetheless, AFD counted €2.1 billionin contributions to a multi-donor budget of approximately€10 billion. AFD primarily cofinanced infrastructureprojects because large-scale ventures generally requirefunds exceeding what any single donor can cover.More than half the projects that AFD cofinanced are insub-Saharan Africa.In 2012 as in preceding years, the European Union (EU)was AFD’s leading co-financier, utilizing its own financialinstruments and the EIB; the World Bank was the secondlargest, followed by ADB and KfW.AFD also collaborates with various United Nations (UN)agencies, such as the UN Development Programme(UNDP) and the International Fund for AgriculturalDevelopment (IFAD). In 2012, AFD signed a partnershipagreement with both agencies to formalize a preexistingrelationship. Their jointly financed actions takedifferent forms: projects in the field, trips to aid beneficiarycountries to assess project suitability, knowledgecreationthrough studies or expert consultations, andsponsorship of colloquia.42
AFD in BrusselsAFD has long been aware of the strategic and financial importance of the European Commission’s (EC) publicdevelopment assistance; nearly 20% of France’s foreign aid flows through the EC. AFD therefore opened an officein Brussels in 2002, where it works in coordination with France’s permanent representatives to the European Union.Indeed, the European Commission is the world’s largest donor and a key development actor; its aid actions coverall sectors and regions. In addition, the EC plays roles in political advocacy, standard-setting and coordination.AFD’s Brussels office has a simple objective: articulating the Agency’s actions with those of the EC. AFD and itspartners, especially KfW and EIB, have thus helped create a truly European financing product, one that combinesloans with grants.AFD’s ten-year presence in Brussels has made it a recognized actor among its peers. The latter appreciate howthe Agency shares its strategic expertise, organizes conferences, and advocates for development-related causesto lawmakers. They also recognize its operational know-how: AFD has deployed more than €500 million on behalfof the EC, as delegated funds or through investment facilities. In 2012, the Brussels office intensified its collaborationwith the EC by helping to launch the “Sustainable Energy for All” (SE4ALL) initiative. The Brussels office alsoincreased its presence in discussions on the European development financing platform, and on backing for newfinancing instruments, such as the Caribbean and Pacific Investment Facility.Brussels – From left to right: signatory representatives from KfW, EIB and AFD.AFD’s TIES WITH THE EUROPEAN UNIONFollowing some initial difficulties (the first attemptsat managing delegated funds proved complicated),substantial progress has been made, establishingcofinancing procedures with European aid agencies andthe European Commission.In 2012, AFD contributed€2.1 billion to cofinancedprojects.The donor group took two major steps to create ajoint-recognition of procedures process. On the onehand, it simplified European aid instruments, creatingnew financing modalities that blended grant monieswith loans. On the other hand, it audited each bilateralaid agency. Donors could be accredited once theysuccessfully passed the audit, and could then use theirown procedures to deploy the European funds. Thesereforms allowed the European Union to deploy largeramounts of public foreign aid, modernize aid instruments,and create European aid solutions. The reformsalso helped bring European donors closer to each other.These practices gradually changed the scale and expenditureof AFD-financed projects.Such working relationships and knowledge transfers withother European donors illustrate the Agency’s contributionto this European dynamic, as do the day-to-dayexchanges between EU delegations and AFD’s in-countryteams.One should stress that European aid comes under a“concurrent jurisdiction;” the 27 EU members’ financinginstruments and aid programmes coexist alongsidethose of the European Commission. The challengetherefore lies in determining the right mix of geography,sector, and instrument – in other words, in using theseEuropean-community and bilateral-agency tools to addvalue for aid beneficiaries and partners, more value thanAFD (or any single donor) could create on its own. Thisrequires coordinating all donor efforts, so that joint aidmay have higher impacts, lower costs, and more certaintyof effect. This also means that the European Commissionmust not duplicate the work of bilateral aid agencies orrestrain them; rather, it must collaborate with memberstates,constantly working to combine skills and remainresponsive.43
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Annual Report - Agence FranÃƒÂ§aise de DÃƒÂ©veloppement

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