AFD - 2018 Registration document

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STATEMENT OF NON-FINANCIAL PERFORMANCE Impact of the group’s activity on sustainable development

Agreement by accelerating the shift in investment flows towards low-emission and climate change resilient development. Some 30 local financial institutions located in 17 recipient countries, of which 16 are located on the African continent, will benefit from the programme. Some 15 transactions are currently being identified/assessed in with the Green Climate Fund. Since the end of 2016, Proparco has also been accredited to act as a financial intermediary and channel resources on behalf of the Green Climate Fund. The memo for “Approving the implementation of projects or programmes, backed by the Green Climate Fund” establishing the opportunity for a strategic partnership between the Green Climate Fund and Proparco to support the private sector in the low-carbon transition, was presented to the Board of Directors on 5 October 2018. Moreover, on behalf of AFD Group, Proparco will implement the part of the TFSC programme in favour of private Local Financial Institutions (LFI). 2.5.3.4 Direct environmental footprint and carbon offsets In line with its “100% Paris Agreement” commitment, AFD Group has undertaken to control direct greenhouse gas (GHG) emissions by simultaneously working to reduce them and offset them. Connected to the energy, digital and technological transition, efforts related to energy performance and digital strategy (including paperless electronics) are measurable (see Appendix 10). The Group’s environmental footprint is assessed every year. In 2018, the increase in GHG emissions for head office operations (25,237 tCO ² eq in 2018, versus 21,370 tCO ² eq the previous year) was 5% per employee; it can be attributed to growth in the workforce, combined with inherent real estate, equipment and professional assignment provisions. Adopting a carbon-neutral approach for its activities, AFD Group’s proactive strategy since 2007 has been to offset 100% of its residual emissions by purchasing carbon credits. These credits serve to fund projects with environmental and social co- benefits. Accordingly, in 2018, it continued to support biomass projects, the protection of forests in Brazil, and access to water in Uganda.

Moreover, the Group is continuing its action in the area of Climate Bonds, started in 2014 with its first 10-year Climate Bond for €1bn. AFD has committed to the “Green Bond Principles” and applies principles such as justification of the use of funds, monitoring of cash flows, an external opinion, and robust reporting on the structuring of its bonds. Following the adoption in 2017 of a new programmatic framework and the expansion of the types of projects backed by its climate bond issues to better reflect the diversity of the Group’s actions, it aims to position itself on the market as a regular issuer of climate bonds. In 2018, it issued a third climate bond for €500m over 7 years. As such, its outstanding Climate Bonds now account for €2.25bn. 2.5.3.3 A stronger partnership strategy AFD continues to play an important role within networks of players in the financing of development and climate issues. In October 2017, it was appointed Chair of the International Development Finance Club (IDFC), a network of 23 national, regional and international development banks, and the foremost global public sponsor for the climate. Climate finance is one of the principal unifying themes within this network. AFD plays a very active role in this respect, in particular by promoting compliance with the Paris Agreement. In this regard, in its capacity as Chair of the IDFC, AFD has helped to organise side events during the COP24 and to publish a joint position paper on consistency with the Paris Agreement for IDFC. Accredited since 2015, AFD continues to collaborate with the Green Climate Fund by signing the accreditation framework agreement during the COP23 in November 2017. This paved the way to implementing AFD’s first two operations approved by the Green Climate Fund, in October 2016 and April 2017 respectively. The Green Climate Fund’s first two disbursements were set in February 2019 for both projects: i) a programme to combat flooding risks in urban environments in Senegal (AFD financing of €50M), and ii) a project to develop irrigation and to adapt agriculture to climate changes downstream from the Kaddoussa dam in Morocco (AFD financing of €41M). During the Board meeting of October 2018, AFD’s large-scale programme entitled “Transforming financial systems for the climate” was approved by the Green Climate Fund Board (GCF). This programme, which represents more than US$750M, marks AFD Group’s pioneering ambition to implement the Paris

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REGISTRATION DOCUMENT 2018