AFD // 2021 Universal Registration Document

STATEMENT OF NON-FINANCIAL PERFORMANCE 2 Contribution of the Group’s activity to sustainable development

2.4.2 Impacts of Proparco’s activity Operating within the private sector, Proparco aims to promote transitions to sustainable and balanced, inclusive and carbon free growth models in developing and emerging countries. Proparco has put in place a new strategic roadmap for the 2020-2022 period, which was approved by its Board of Directors on 7 ɸ February 2020, after an initial presentation to the AFD Board of Directors in January ɸ 2020. This new roadmap for 2020-2022, which is in line with the major priorities of the AFD Group’s strategic plan, reaffirms Proparco’s priority objective of significantly increasing its impact on development and the achievement of the SDGs (1) . The objective is to double the impacts over the 2020-2022 period compared to the 2016-2018 period. To that end, Proparco seeks to strengthen the mobilisation of private players in order to direct private financing flows towards the SDGs. Proparco is also targeting the emergence of tomorrow’s players and markets, particularly in the most vulnerable areas. These main objectives are accompanied by operational priorities that contribute to the AFD Group’s strategic priorities: climate financing, financial inclusion, financing of VSEs and SMEs, notably on the African continent, and a proactive approach in vulnerable areas. To support this strategy focused on the impact and added value of the institution, since 2018 Proparco has had a dedicated department – Support for Sustainable Development – positioned at the same hierarchical level as the operational departments. It brings together, in three units, Proparco’s experts in the areas of (i) ɸ environment, social and governance, (ii) ɸ impact monitoring

and analysis and (iii) ɸ company support and the mobilisation of mix resources. As a development finance institution, [and] an accountable one, Proparco evaluates and reports on the impact of its action through an approach that measures the results and impacts of its financing. Integrated into the project cycle, this approach aims, first of all, to inform financing decisions by characterising the expected impacts of loans, notably with regard to Proparco’s three major strategic objectives: amplifying its direct impacts on employment support and improving access to essential goods and services; reinforcing the mobilisation of private financing for sustainable development investments (SDI); and accelerating Proparco’s contribution to the emergence of the players and sectors of tomorrow. The expected effects of each project are assessed by collecting indicators established through project studies and discussions with clients. An ex-ante impact analysis is presented from a more general perspective, addressing the project’s contribution to the SDGs. The analysis of expected impacts is conducted during the appraisal and entered into the project’s documentation submitted to decision-making bodies. Of the 86 ɸ projects signed in 2021 (excluding ARIZ (2) /EURIZ (3) guarantees, Fisea (4) projects, Covid-19 exceptional financing, loans from delegated funds and grants), 75 have been the subject of a recognised ex-ante analysis (5) of expected impacts.

(1) This roadmap was published in the 2019 sustainable development report (https://www.proparco.fr/en/ressources/sustainable-development report-2019). Proparco has since published a 2020 sustainable development report (https://www.proparco.fr/en/ressources/sustainable development-report-2020). The report on the 2021 financial year will be published in the spring of 2022. (2) ARIZ is a terminal loss guarantee offered by AFD to financial institutions to cover 50% to 75% of an individual loan or a portfolio of loans to SMEs and microfinance institutions. https://www.proparco.fr/en/ressources/ariz (3) Euriz enables financial institutions in Africa and the Caribbean to develop their loan offers to VSEs and SMEs active in sectors with a strong employment and societal impact. This project is supported by the European Union and the African, Caribbean and Pacific Group of States. https://www.proparco.fr/en/actualites/launch-euriz-guarantee-eu181-million-facilitate-msmes-access-credit-africa-and-caribbean (4) Investment and Support Fund for Businesses in Africa. (5) Of the 11 projects for which the expected impacts were not recognised, five are additional loans for existing customers for which the expected ex-ante impacts had been recognised at the time of the first signature. three European Financing Partners (EFP) projects, two Interact Climate Change Facility (ICCF) projects and one trade finance guarantee project were outside the “impact” scope at appraisal and were therefore not subject to a recognised ex-ante impact analysis.

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2021 UNIVERSAL REGISTRATION DOCUMENT