AFD - Universal Registration Document 2020

AFD’S ANNUAL PARENT COMPANY FINANCIAL STATEMENTS 7 Highlights of the financial year

CONTINUING ACTIVITY IN AN UNCERTAIN CONTEXT

Deferral of maturity in a context other than the moratoria presented above was deemed in the majority of cases to be a significant increase in credit risk leading to a downgrading to stage Ǿ 2 unless it could be demonstrated that the cash flow difficulties were temporary and that the pre-Covid financial situation was deemed to be healthy with the capacity to quickly resume the pace of repayments (1) . In addition, given the uncertainties that remain in the air and tourismsectors, AFD decided to adopt amulti-scenario approach in order to take into account the increased vulnerability of the tourism sector in AFD’s countries and territories of intervention as well as the extent of the crisis in the air sector marked by the brutal halt of the global air sector. The assumptions and estimates used to prepare the annual financial statements led to an additional allocation of €69.9M on exposure to the air and tourism sectors. VALUATION OF THE EQUITY PORTFOLIO The impact of the COVID-19 crisis on AFD’s regions and counterparty portfolio has led to a decrease in the valuations of a majority of the Agency’s equity investments, for example through a deterioration in the performance and fundamentals of the entities concerned and/or of the transaction multiples observed in terms of valuation. At 31 Decembre 2020, AFD recorded an allocation of €40.2M to its portfolio.

The AFD Group has decided to support weakened economies by providing responses in the form of counter-cyclical operations to support the policies and response plans implemented by countries and territories in terms of managing the health crisis but also, supporting the business fabric, and reviving the economy towards trajectories in line with the Sustainable Development Goals and the Paris Climate Agreement. The AFD Group is responding to requests from its partners and is fast-tracking operations to respond to the health crisis and its economic and social consequences, mainly in the form of lines of credit to support SMEs penalised by the paralysis of the economy, as well as in the form of budget financing to support public policies to combat the epidemic. Proparco, an AFD Group subsidiary, is also stepping up its monitoring of clients and offering them solutions to help them cope with the economic crisis, notably by making existing loans more flexible (moratoriums and changes of purpose). Additional financing may be provided to support the economic recovery and revival that will follow the health crisis. Other measures accompany AFD’s response, namely: P “Health in Common” initiative; P institutional Partnerships for Africa and the Middle East; P support for NGOs; P “Outre-mer en commun” programme; P global response with other development actors.

(1) This exception was not applied for: • Counterparties in the air transport and tourism transport sectors; • Moratoriums resulting in a loss of NPV > Ǿ 1%; • Moratoriums resulting in an extension of the credit maturity.

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2020 UNIVERSAL REGISTRATION DOCUMENT