AFD // 2021 Universal Registration Document

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PRESENTATION OF AFD

Activities of the Agence Française de Développement Group in 2021

Defense”) has resulted in an “anticipation-prevention” roadmap in the Gulf of Guinea. This roadmap has three components: P taking into account topics identified as fragility issues (youth employment, access to natural resources, ɸ etc.) or focusing on target regions, notably in the northern Gulf of Guinea and in the south of Sahel countries; P setting up monitoring and analysis tools to clearly identify the elements of the context, and sharing these analyses in 3D mode; P mapping precisely the AFD’s achievements in order to better exchange with counterparties and all the partners that AFD mobilises via the regional approach it supports. These maps give us entirely new elements of precision. For example, AFD can indicate that its projects have enabled the completion of 641 ɸ activities between February and December ɸ 2021 (148 ɸ in Mali, 211 ɸ in Niger and 282 ɸ in Burkina Faso). AFD’s activity in Latin America decreased by 20% to €1.35bn in 2021, compared to €1.69bn in 2020. This decrease was observed for loans (-21% to €1.32bn) and grants (-10%, to €0.22bn). Latin America was the world region most affected by the Covid-19 pandemic in socio-economic terms. Although positive growth was expected in 2021, gross domestic product per capita is not expected to return to its pre-crisis level before 2024. The impact of the crisis has been asymmetric, especially affecting the most vulnerable groups, with poverty and extreme poverty at their highest levels in 20 ɸ years. Targeted policies, mainly through unconditional cash transfers, provided rapid support to public health systems, households and businesses. AFD was already part of this recovery trend in 2020. A context that remains very complicated has not called into question AFD’s activity in the region, although it had to adapt and optimise the management of exacerbated risks while being part of an ambitious programme for the ecological transition and the well-being of populations. In 2021, AFD’s activity was limited by the classification of one third of its nine countries of operation as at high or very high risk (Argentina, Cuba, Ecuador). In terms of regional distribution, the Andean Regional Directorate contributed 50% of the business plan with €667M, while the Brazil/Southern Cone Regional Directorate committed €210M and the Mexico, Cuba, Costa Rica Regional Directorate provided €350M. In terms of financial instruments, activity returned to a relatively balanced distribution, with around one-third in public policy loans, one-third in credit lines and one-third in projects. AFD’s activity in the Orient, covering all of Asia, in addition to the countries of the Western Balkans, the Near and Middle East, as well as Turkey, rose sharply in 2021, growing from €2.42bn in 2020 to €3.05bn in 2021, i.e. an increase of 26%. This increase

in activity was driven by loans, which accounted for 96% of approvals, and increased by 28% to €2.92bn in AFD approvals in the region. Grants fell by 10%, from €0.14bn to €0.13bn. In the Orients region, AFD continued to provide emergency responses to the crisis brought about by Covid-19, notably with a publicpolicy loan (PrPP) inBangladesh tosupport the vaccination campaign in the country. The year in 2021 was marked by the persistence of the health crisis, with the appearance of new variants, notably in certain regions of the Orients, generating very strong contagion waves, and exacerbating many economic, political and diplomatic crises (Armenia, Georgia, Pakistan, Sri Lanka, Turkey), which could continue beyond 2021. The situation has especially worsened in Lebanon and Afghanistan, countries facing major political, social and economic collapses. In this context, the financing approved in 2021 benefited primarily Eurasia countries (35% of 2021 commitments), followed by South Asia (25%), South-East Asia (16%), China (13%), and Near and Middle East countries (11%). There was only one regional project, the objective of which was to support the public policies of partners in South-East Asia to improve air quality via awareness-raising actions and reinforce local knowledge and capacity-building. Commitments were supported by significant financing granted to India, China, Bangladesh, the Philippines (first transaction since 2018 after cooperation with AFD ended due to the deteriorated diplomatic relations between the Philippines and France), Kazakhstan (first operation in the country), Turkey, Georgia and Serbia (first transactions in the country). AFD’s activity in the region mainly took the form of sovereign loans (71% of commitments). Eight transactions in six countries accounted for nearly 67% of total sovereign commitments. In 2021, the year was marked by a strong increase in non-sovereign lending activities compared to the previous year, both in terms of volume and as a share of the “Orients” department’s activity. Three transactions in China, Turkey, and India accounted for 64% of total non-sovereign loans in 2021. Commitment approvals in foreign states in the Three Oceans zone reached €0.24bn in 2021 compared to €0.70bn in 2020, i.e. down 66% compared to 2020. Three countries are priorities for French development aid on the Three Oceans scope – namely Haiti, Madagascar and the Comoros. The Comoros should continue to benefit from a particularly sustained effort under the France-Comoros Development Plan adopted in July ɸ 2019. In these three countries, the reinforcement of human capital (health, education, training), access to basic services (including water), the preservation of natural resources, and increased economic and employment opportunities are targeted.

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2021 UNIVERSAL REGISTRATION DOCUMENT