AFD // 2021 Universal Registration Document

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PRESENTATION OF AFD

Activities of the Agence Française de Développement Group in 2021

Each year, the sector contributes increasingly to AFD’s commitments to foster biodiversity, notably through projects promoting nature-based solutions and a concerted management of resources. This notably involves: (i) ɸ a loan for the ecological restoration of Lake Shi in the city of Wuhan in China, (ii) ɸ a grant to protect water resources in the greater Dakar region, in Senegal, and (iii) ɸ a water resources development project in Mauritania in order to prevent the risk of conflict between herders and farmers. The share of financing dedicated to sanitation reached the target of 40%. For example, AFD approved a loan to finance the Al Kahlidiya municipality’s sanitation and rainwater drainage project in Iraq and a loan accompanied by a grant from the European Union for the rehabilitation of the Helwan wastewater treatment plant in South Cairo. Lastly, the contribution of the sector’s projects to gender equality reached a high level in 2021, with 67% of projects having a positive impact. Gender was the main/cross-cutting objective of two projects in 2021, including innovative financing for the implementation of a development impact contract for Menstrual Health and Hygiene Management. 4. The education sector covers youth education, training and employment. The approvals allocated to these fields were down slightly, from €0.29bn in 2020 to €0.26bn in 2021, i.e. an 8% decrease. AFD launched 28 ɸ new projects (excluding the Project Start up, Preparation and Monitoring Facility project – FAPS) in foreign countries in 2021 (compared to 26 ɸ in 2020 and 40 ɸ in 2019). Most commitments in 2021 concern Africa (82% of financing). 58% targeted the priority countries for French aid and 18% the six countries of the Sahel. The ocean basins of the “three oceans” also benefited from commitments, with new projects in Haiti, the Comoros, Madagascar and Vanuatu. Approvals covered project funding for basic education (primary and secondary), through grants or through delegations from the Global Partnership for Education. These funds mainly support the implementation of national education policies around the issues of system equity, quality and governance, whenever possible via multi-donor pooled funds (notably in Niger). Projects on vocational training aim to improve the employability of young people and transitions, notably the energy transition and agricultural and rural transitions, through skills development. Approvals also cover projects in higher education and in employment, in particular on the integration of marginalised young people, notably in the Sahel (Niger, Mauritania). The sector’s interventions are closely intertwined with other areas such as gender equality and the fight against climate change. 24% of the projects financed have a climate co-benefit, which is continually increasing (10% in 2019, 18% in 2020), with an approximately equivalent impact on adaptation and mitigation. Equally, almost all the projects financed have a gender dimension (99%), among which 37% of commitments are classified as CAD ɸ 2, which is in line with the AFD’s desire to support the empowerment of women across the entire sector. Lastly, the year in 2021 was marked by AFD’s mobilisation around and participation in the World Education Summit (reconstitution conference of the Global Partnership for Education), during which France renewed its commitment to education.

Support for the agroforestry and agricultural sectors, including plant-based proteins, was also financed in 2021. This support helps to strengthen the resilience of producers in the face of shocks such as those in Lebanon, Burma and Iraq. In Laos, AFD is contributing to the development of a sustainable and quality coffee sector. Lastly, in Togo, the structuring of the soybean sector is supported via a partnership with the Avril Foundation. The economic development of cotton, coffee and cocoa production areas is also supported by improving the access of farms to means of production and markets. Lastly, partnerships with other development banks were consolidated in 2021, notably with KFW in Burkina Faso on irrigation or with IFAD on agricultural risk management issues. 2. In 2021, total Climate approvals in Foreign States amounted to €0.80bn, compared to €0.78bn in 2020. This amount - stable - represents 10% of AFD’s approvals for foreign States. Despite the Covid-19 crisis, AFD achieved its climate targets in 2021. The AFD Group’s partnership with the Green Climate Fund continued with the approval in 2021, by the Fund’s consulting service, of new cofunding, of US$52.8M, for the HYDROMET project, which aims to strengthen the resilience of Indian Ocean States to climate change, via the improvement of ecosystem services. To date, six projects led by AFD have been co-financed by the Green Fund. Partnership activities between the Green Climate Fund and IDFC are also continuing with a view to supporting IDFC members in their accreditation process or to help recently accredited members to seek funds. Lastly, AFD has been in regular contact with French and international climate NGOs as part of the Partners Committee, which is made up of ministries, think tanks, French CSOs and other civil society actors, and has participated in consultation meetings on the evolution of climate finance methodologies and in involvement meetings on the Finance in Common Summit. 3. In 2021, AFD granted €0.97bn to the water and sanitation sector, i.e. an increase of 12% compared to 2020 (€0.61bn). The sector thus represented 12% of AFD’s total approvals in 2021 compared to 7% the previous year. Commitments in Africa, historically low over the last two years, were back to a significant level, at over one-third of commitments in 2021. Nearly three-quarters of French State subsidies are focused there, with several transactions in particularly fragile areas (Mauritania, Burkina Faso, Djibouti, Ethiopia, Central African Republic, Chad). Several loans granted in 2021 will contribute to improving governance and capacity-building, which are a priority at the heart of AFD’s sectoral approach. In particular, it is worth highlighting a public policy loan (PrPP) granted in Georgia and a loan granted in Djibouti for a project to support the National Water and Sanitation Office of Djibouti (ONEAD). In 2021, the water and sanitation sector continued to make a significant contribution to the fight against climate change: 100% of projects have climate co-benefits. These projects will make it possible to better understand water resources, to preserve water in terms of quantity and quality, to reduce the health vulnerability of populations and to promote circular economy approaches.

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2021 UNIVERSAL REGISTRATION DOCUMENT