AFD M issions & financial tools November 4th 2011 VIENTIANE

november 4th 2011 AFD workshop 2 1. AFD at a glance

november 4th 2011 AFD workshop 3 What is the AFD Group? An “EPIC” under French law, e.g. a public establishment that has industrial and commercial characteristics. Three French Ministries provide oversight: Foreign and European Affairs Economy, Finance and Industry Interior, Overseas France, Local Authorities and Immigration AFD, a specialized financial institution subject to banking regulations. and a subsidiary dedicated to private-sector financing, PROPARCO, form the AFD Group A development-finance and aid organization that implements France’s aid policies, drawing on: Cooperation framework agreements approved in November 2010 A ″means and objectives″ contract, defined with AFD’s supervisory ministries 1

november 4th 2011 AFD workshop 4 Funding growth continues 1

november 4th 2011 AFD workshop 5 Operating regions and new offices opened in

november 4th 2011 AFD workshop 6 AFD’s international “ecosystem” 1

november 4th 2011 AFD workshop 7 AFD’s French partners and interlocutors 1

november 4th 2011 AFD workshop 8 AFD optimizes public development-aid monies 1

november 4th 2011 AFD workshop 9 Financial instruments 1

november 4th 2011 AFD workshop 10 AFD’s funding by region (€ Million) 1

november 4th 2011 AFD workshop 11 Sectors 1

november 4th 2011 AFD workshop 12 Development results In 2010, AFD approved funding for developing and emerging countries that will help : Improve drinking-water supply for 33 million people Provide primary schooling for 13.4 million children Refurbish or build transportation systems that will be used by 85.8 million passengers per year Abate 5 million tons of CO 2 annually through energy efficiency Connect 8.2 million people to the telecommunications network Provide 3 million people access to traditional or renewable electricity systems Grant €428 million worth of microloans, benefitting more than 700,000 people Improve waste collection and disposal services for 2.4 million people Support agricultural and irrigation projects that will benefit 1.4 million people 1

november 4th 2011 AFD workshop AFD in LAOS

november 4th 2011 AFD workshop 14 AFD in LAOS Presentation Operates since sectors of intervention Rural development Infrastructures : energy, water Urban development Health 120 M€ of overall commitment Subsidies : 100 M€, 34 projects Loans : 20 M€ 2

november 4th 2011 AFD workshop 15 AFD in Laos Recent evolutions Since 2007 : Focus on 3 sectors Rural development Health Urban development Current financings 7 projects in activity 17,1M€ in disbursement process AFD strategy for the future : development of non sovereign activity 2

november 4th 2011 AFD workshop Non sovereign activity

november 4th 2011 AFD workshop 17 Non sovereign activity General presentation A development pushed by : AFD new context tending to reduce the amount of subsidies Impossibility for AFD to lend money directly to the Laos State 3 available financial tools : Loan Equity Guarantee Counterparts : Private sector Public companies Financial sector (banks and MFI) 3

november 4th 2011 AFD workshop 18 3 Non sovereign activity Project cycle - AFD Identification Committee Financing Committee Board IdentificationFeasibilityAppraisalDecision Legal negotiation Disbursement Letter of interest Notification Financial agreement

november 4th 2011 AFD workshop 19 Corruption, money laundering and terrorist financing As part of the Financial Action Task Force (FATF), AFD needs Specific due diligences –Legal documentation –Executive management and members of the board »Of the beneficiary company »Of the owner’s companies (up to 10% of indirect ownership) Undertakings to be part of the credit facility agreements –Business Relationships –Licit Origin of the Funds –No Corruption 3 1/3 Non sovereign activity Compulsory criteria of attribution

november 4th 2011 AFD workshop 20 Undertakings to be part of the credit facility agreements (extracts) Business Relationships The Borrower undertakes not to enter into a business relationship with any person, group or entity which is listed on any of the Financial Sanctions Lists (including in particular the fight against financing of terrorism). Licit Origin of the Funds In all circumstances, the Borrower undertakes to promptly notify the Lender in the event that information comes to its attention causing it to suspect that the funds may be of illicit origin. No Corruption The Borrower undertakes to ensure that the Project (including the negotiation, award and performance of contracts financed with the Facility) shall not give rise to any Corruption. 3 2/3 Non sovereign activity Compulsory criteria of attribution

november 4th 2011 AFD workshop 21 Environmental and social impacts 3 Low risk (category C)Medium risk (category B)High Risk (category A) Environmental and Social Impact Environmental and social impacts are expected to be negligible (minimal or no adverse impacts) Environmental and social impacts can be readily identified and standard preventative and/or remedial measures can be prescribed There may be highly significant, negative and/or long-term environmental and social impacts, the magnitude of which are difficult to determine at the application stage Examples Software development companies and consulting firms General industrial companies and plants on existing sites, telecommunication infrastructures, Brownfield infrastructure project. Infrastructure and extraction projects Assessment No environmental appraisal required Environmental and social compliance check as integrated part of the due diligence and site visit of a potential client Environmental Impact Assessment or Environmental Audit by a qualified external consultant Environmental and Social Requirements Compliance with applicable local laws If necessary, remedial measures to be included into the loan contract Compliance with applicable local laws Compliance with applicable Word Bank / IFC guidelines and safeguard policies If necessary, remedial measures to be included into the contract 3/3 Non sovereign activity Compulsory criteria of attribution

Thank you