AFD // 2021 Universal Registration Document

CONSOLIDATED FINANCIAL STATEMENTS 6 Notes to the consolidated financial statements

1.2.1 Loans that do not meet SPPI criteria Loan agreements may have an early repayment clause, the contractual amount of which corresponds to a settlement equal to the cost of unwinding an associated hedge swap. Loan contracts may also include a remuneration clause indexed to the borrower’s performance. The flows of these loans are not considered as SPPI as they do not only reflect the effect of changes in the benchmark interest rate. As a result, AFD Group has identified a loan portfolio which is measured at fair value through profit and loss. The loans are therefore subjected to a valuation exercise based on the methodology for discounting future flows, with a discount rate specific to each loan in accordance with the accounting rules applied by the Group. 1.2.2 Bonds and other long-term securities Convertible bonds are debt instruments for which the contractual flows do not meet SPPI characteristics due to the nature of the flows exchanged, and are consequently assessed at fair value through profit and loss.

1.2.3 Equity investments The AFD Group aims to encourage private investment in the developing countries, mainly via its subsidiaries Proparco and Fisea (Investment and Support Fund for Businesses in Africa). It acts primarily through investments in investment funds, as this activity enables it to increase the impact of its financing by supporting a large number of companies doing business in multiple sectors, thus promoting economic growth and the creation of job-creating businesses. AFD Group also holds direct equity investments with put options for operational purposes. The contractual flows of these financial assets are not SPPI and are therefore measured at fair value through profit and loss.

Investments in unconsolidated structured entities ❙ Breakdown by portfolio activity

Number of equity investments

Number of equity investments

Equity investments held in the Investment Funds (in ࣢ thousands of euros)

31/12/2021

31/12/2020

Homogeneous activity portfolios Agribusiness

9 5 7 2

39,100 33,844 74,720 73,598 89,578 343,330 505,126 -

9 5 7 2

40,392 35,668 58,933

Energy

Infrastructure

Mining

91

Multi-sector SME-SMI

12

13

61,952 40,052 230,197 482,002 949,287

Healthcare

7

6

Financial services

30 74

22 78

Multi-sector

NON-CONSOLIDATED STRUCTURED ENTITIES

146

1,159,296

142

❙ Breakdown by operating region

Number of equity investments

Number of equity investments

Equity investments held in the Investment Funds (in ࣢ thousands of euros)

31/12/2021

31/12/2020

Operating region Southern Africa

4

2,918

5

3,035

East Africa West Africa North Africa

14

148,514 32,628 44,485 118,911 811,840

11

75,624 30,917 47,971 88,627 703,113 949,287

5

6

15 19 89

17 17 86

Asia

Multi-region

NON-CONSOLIDATED STRUCTURED ENTITIES

146

1,159,296

142

146

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2021 UNIVERSAL REGISTRATION DOCUMENT