AFD - 2019 Universal registration document

RISK MANAGEMENT

Risk factors

4.1.3 Health and Safety Risks RISKS RELATED TO THE SPREAD OF A GLOBAL EPIDEMIC

employees overseas either as expatriates or on assignment, for the purposes of local representation and to monitor financing projects. Employees working in the network (staff recruited locally and expatriated) account for around a third of AFD’s total workforce. AFD operates in 115 Ǿ countries. This means it is liable as an employer irrespective of the extent of existing risks on the ground. These risks vary in nature according to the country: climate risks, seismic or volcanic risks, risks of accidents (traffic accidents in particular) risks linked to inadequate public health and safety infrastructure. But the biggest risks remain the risk of political instability and terrorism (attacks, kidnapping, uprisings etc.). Indeed, AFD is present in certain regions that are particularly exposed (Sahel, Iraq, Palestinian Autonomous Territories, Pakistan etc.), in which the risk of danger to its employees is deemed to be very high, despite the operational security measures in place and continuously adapted to changing contexts of vulnerability or crisis. Certain events could lead AFD to reduce its activities in certain countries, to rely on degraded systems (as in the case of China – early 2020 – where the Beijing local office had to introduce remote working methods faced with the confinement of Chinese employees imposed by local authorities as a response to the coronavirus epidemic), or even to close certain local representations (as was the case briefly in Haiti - at the end of 2019 – where, as a response to a deteriorating security context, AFD decided to close its local office in Port-au-Prince so as not to expose its staff). 4.1.3.2 Risk of the 100-year flood The 100-year flood is a major flood which has a one in one hundred chance of occurring each year. It is characterised by slow floods (10 to 15 Ǿ days of floods, or even more before the water level drops) of which the biggest was in 1910 (+8.62 Ǿ metres). AFD is exposed to this risk since its registered office, made up of a number of buildings, is located in Paris, not far from the Seine. The AFD buildings, which comprise a number of storeys and basements, are located less than 400 Ǿ m from the bed of the Seine, and is in an area where, according to the City of Paris’s Flood Risk Prevention Plan, water would exceed 30 Ǿ metres in the event of a 100-year flood. In the event of a flood like the one in 1910, the ground floor of AFD’s main building would be overrun with almost 60 Ǿ cm of water and the basements submerged. As for the lowest point of the streets around the building, maximum water levels could reach over 1.5 Ǿ m. Such flooding would prevent staff from accessing buildings and result in the temporary suspension of certain activities.

The current health crisis linked to covid-19 is an example of this type of risk. Although, as of the date of this document, changes remain uncertain, the expected impact could be three-fold: P an impact on the implementation of the AFD Group’s annual programme of activities, resulting from prolonged travel restrictions and confinement measures associated with this type of health crisis which are liable to slow down processing. This will also be a result of the reduced capacity of our counterparties to jointly with AFD assess and implement projects and financing. This negative impact on the initial business plan could however be mitigated by the responses on which AFD is working to tackle the health crisis in its operating regions. The extent (regions impacted) but above all the duration of the crisis will be two factors that determine the final impact; P the weakening of certain portfolio counterparties following the spread of the health crisis in the global economy, but above all in emerging and developing economies. However, the potential impact of this health crisis on the counterparties of the AFD Group will depend on its duration, its extent, but also budgetary and monetary measures taken by governments and international organisations to support SMEs, multinational companies and financial institutions; P health risk for employees and their families, although the AFD Group has a policy of strict, immediate compliance with the recommendations of government and public health agencies across its French sites. Overseas, the situation is managed on a case-by case basis, particularly on the basis of the recommendations of the French Ministry of Europe and Foreign Affairs and the recommendations of the local authorities. A crisis unit was set up when French authorities moved to stage 2 and the recommendations were circulated and applied in real time. On 16 March 2020, AFD launched its Business Continuity Plan (BCP) for its sites in mainland France. 4.1.3.1 Risks linked to employee security Owing to the geographical scope of its operations and locations, AFD is particularly vigilant to risks faced by employees on the ground. In addition to staff recruited locally, AFD sends

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UNIVERSAL REGISTRATION DOCUMENT 2019