AFD - 2019 Universal registration document

AFD’S ANNUAL FINANCIAL STATEMENTS Accounting principles and assessment methods

7.2.11 Reserve for General Banking Risk (RGBR) In accordance with CRBF 90-02, the Reserve for General Banking Risk is intended to remain permanently in capital reserves for comprehensive general coverage of AFD’s risks. Among other things, the Reserve is intended to hedge: P general risks from AFD’s direct activities in the French Overseas Departments and Collectivities; P general risks for real estate holdings in foreign countries. 7.2.12 Subordinated debt In 1998, an agreement was reached with the French State whereby part of AFD’s debt to the French Treasury, corresponding to drawdowns between 1 Ǿ January Ǿ 1990 and 31 Ǿ December Ǿ 1997, was converted into subordinated debt. The agreement also provides for the general rescheduling of the debt’s repayment period over 20 Ǿ years with a 10-year grace period, with any new borrowings after 1 Ǿ January Ǿ 1998 recognised as subordinated debt (with a repayment period scheduled over 30 Ǿ years and a 10-year grace period). In the 2019 financial year, AFD received €240M in RCS (resources with special conditions). 7.2.13 Financing commitments Financing commitments given record the amounts to be disbursed under lending agreements with customers or credit institutions and under investment fund agreements. Financing commitments given to credit institutions include the undisbursed balance, on the State’s behalf, under agreements signed with the IMF for financing the PRGF Financing commitments given to investment funds include remaining commitments for AFD’s subscription to Fisea’s new share issue, namely €23.0M at 31 Ǿ December Ǿ 2019. 7.2.14 Guarantee commitments Commitments given for guarantees to credit institutions include, in particular: P guarantees granted by AFD for the Ariz Ǿ I, Ariz Ǿ II and Ariz Med procedure (Support for the risk of financing private investment in AFD’s PSZ, in Sub-Saharan Africa and in Mediterranean countries). These guarantees are intended to encourage the creation and development of local businesses. Commitments given for guarantees to clients include, in particular: P the guarantee of the debt of its subsidiary in liquidation, Soderag, bearing in mind that a very large part of this debt was repaid early in 1998 and 1999 after Soderag sold its

portfolio to Sodega, Sodema and Sofideg. The portfolio was then taken over by BRED; P the guarantee granted to BRED accounts for 50% of gross outstandings on the loan portfolio sold by Socredom in 1998 in preparation for its dissolution, which took place on 1 Ǿ January Ǿ 1999; P repayment guarantees for the three bonds issued by IFFIM as part of managing the French contribution to the Solidarity Fund for Development (FSD) on behalf of the French State; P sub-participation guarantees granted to Proparco. Commitments received from credit institutions are related to loan transactions conducted by AFD. Other commitments received included the French State’s guarantee of loans to foreign countries. Guarantee commitments for securities include share buyback options offered to Proparco’s minority shareholders as part of the capital increases undertaken in May Ǿ 2014 and June Ǿ 2014. These buyback options may be exercised for a period of five years following a lock-in period of five years. 7.2.15 Disclosure on non-cooperating States and territories Article Ǿ L.511-45 of the French Monetary and Financial Code (as amended by Article Ǿ 3 of Order 2014-158 of 20 Ǿ February Ǿ 2014) requires credit institutions to publish an appendix to their annual financial statements presenting information about their offices in countries or territories that have not signed an administrative assistance agreement with France for the purpose of combating fraud and tax evasion. Act No 2013-672 of 26 Ǿ July Ǿ 2013 on the separation and regulation of banking activities broadens the list of required disclosures from banks regarding their offices in non-cooperative countries or territories. At 31 Ǿ December Ǿ 2019, AFD did not have any offices in non- cooperative countries or territories. 7.2.16 Other information related to b consolidation AFD’s financial statements are fully reflected in AFD Group’s consolidated financial statements using the full consolidation method. 7.2.17 Post-closing events The spread of the Coronavirus pandemic (COVID-19) has led AFD to adopt safety measures in France and in our offices to comply with the recommendations of the World Health Organization and health authorities. This health crisis has no impact on AFD’s parent company financial statements at 31 Ǿ December Ǿ 2019. No other significant events took place after 31 Ǿ December Ǿ 2019.

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UNIVERSAL REGISTRATION DOCUMENT 2019