AFD - Universal Registration Document 2020

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PRESENTATION OF AFD

Activities of the Agence Française de Développement Group in 2020

the purchase by SNI of 34% of the companies’ share capital, including all AFD’s shares in 2017, then an option to purchase the balance of the State’s shares within five years. The full sale took place on 19 Ǿ December 2019. AFD no longer holds any equity investments on its own behalf in SIDOM (with the exception of SIC in New Caledonia), as these were sold for €20.9M. The shares still recognised in its balance sheet are held on behalf of the State and were sold at the end of 2019. As a result, as of the end of 2019, AFD’s equity stake in its own name in the share capital of SIC in New Caledonia was down to 50%, so the company was not included in the transaction as the State had no equity interest in this company. SIC is a social landlord whose mission is to further social cohesion and the fight against inequality and exclusion by offering housing solutions for people with the most modest means. It manages a stock of 10,700 accommodations, housing 40,000 Ǿ people, i.e. 15% of the population of New Caledonia.

P to Wallis and Futuna , the fund did not change this year with zero production, as in 2019. The gross consolidated outstanding guarantees at 31 Ǿ December 2020 (€116.4M) increased by 6% compared with 31 Ǿ December 2019 (€109.9M). 1.5.3.7 Property companies Inconnectionwith itsoperations inFrenchOverseasDepartments and Collectivities, AFD was a shareholder, alongside the State and local authorities, of six property companies, the SIDOMs. At the end of 2015, the Government announced its intention to reorganise the shareholding of the SIDOMs by transferring its equity interests to a public operator specialising in social housing, the Société Nationale Immobilière (SNI), a wholly-owned subsidiary of the Caisse des Dépôts et Consignations. The State asked AFD to sell its own shares at the same time as the transfer. Following the negotiations conducted between the State and SNI, an agreement was signed for a disposal in two stages: first

1.6 Activities of the Agence Française de Développement Group in 2020

1.6.1 International context THE YEAR IN 2020

vaccines had a positive effect on the normalisation of financing conditions and the tightening of spreads on the international bonds of many EDCS. In particular, they benefited from the return of capital flows at the end of the year, even if several countries in the speculative category are still excluded from the financial markets (Sri Lanka and Ecuador, for example). Lastly, commodity prices have started to rise again, including that of oil, although it remains well below its level at the beginning of 2020. In 2020, according to the IMF, the real GDP of emerging and developing Asia is expected to fall -1.1%. Relatively protected from the crisis compared to other regions, Asia is benefiting from the rapid recovery in China, driven by the industrial sector. In Vietnam, the rapid response of the authorities, both in terms of health and economics, mitigated the impact of the crisis on activity despite a relatively outgoing growth model. In 2020, Vietnamese growth also remained positive, at +1.6%. India, on the other hand, is expected to be severely affected, in an already unfavourable economic context of slowing growth (+4.2% for FY 2019/20). While external balances hold up well to the shock, the contraction of economic activity of more than -10% for the 2020/21 financial year, combined with the increase in the budget deficit (-13.1% of GDP) should increase the weight of the public debt, which could reach 89.3% of GDP at the end of March Ǿ 2021, even though government support for the economy seems measured. Like India, the Philippines and Indonesia are struggling to contain the epidemic. The economic impact of the crisis is expected to be greater in the Philippines (-8.3% recession expected in 2020) than in Indonesia (-1.5%), where the economic policy response was more decisive.

According to the latest IMF forecasts (January Ǿ 2021), the global economy entered a recession in 2020, with a magnitude of-3.5% over the year. Emerging and developing countries (EDCs) saw their GDP contract by -2.4% (-4.9% for advanced economies) and all regions where AFD operates saw a decline in their activity in 2020, Latin America being the most affected continent, while emerging and developing Asia resisted relatively better due to a rapid rebound in Chinese growth, which stood in positive territory over the year, at 2.3%. The strongest impact of the crisis in relation COVID-19 was felt in the second quarter of 2020 in most economies. Following the almost general easing of lockdown measures, economic activity rebounded automatically during the second half of the year, even if in many countries (except China) GDP is not expected to return to its original level of 2019 before at least 2021. The appearance of new epidemic waves and more transmissible SARS-CoV-2 variants at the end of 2020 casts a veil of uncertainty on the prospects for recovery in 2021 despite the development of effective vaccines against the virus. At the end of 2020, the external environment of EDCs improved: trade resumed, financial conditions relaxed and inflation remained low overall. The easing of monetary policies in advanced and emerging economies played a decisive role in supporting economic activity and reducing the liquidity tensions observed in the spring. The announcement of the arrival of

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2020 UNIVERSAL REGISTRATION DOCUMENT