INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD

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INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
Investors presentation
                   September 2018

                #WorldInCommon
AGENCE FRANÇAISE DE DÉVELOPPEMENT | FRENCH DEVELOPMENT AGENCY
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
AFD at a glance

September 2018                     2
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
AFD at
                AFD: the French Development Agency
 a glance

    Established
      in 1941
            I

      100%
       owned
 by the French State
                                         is committed to improving day to day lives of
            I                            local population by financing projects which:
  EPIC subject to
 banking regulation
            I
      AA rated                                                        Promote             Reduce
                            Promote
  by Fitch and S&P                               Reduce              biodiversity,       negative
                          sustainable
                                               poverty and           social and           impacts
            I              economic
                                               inequalities        environmental         of climate
                             growth                                 responsibility
    Qualified as                                                                          change
“Advanced” by Vigeo
            I
 Rated Prime Status                      AFD finances, monitors and supports
     by Oekom
                                        more than 2,500 development projects

September 2018                                                                                        3
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
AFD at
                  AFD operates in most of the developing and emerging markets
 a glance

                                         AFD operates also in French overseas territories
                               1.6Bn€ in 2017, representing 16% of the commitments of AFD group

        85
     Agencies

            I

       109
country of operations

            I

      2,500
   Employees on

            I

         5
     Continents

September 2018                                                                                    4
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
AFD at
                A fresh impetus to French development policy
 a glance

                                                                          A commitments increase

                                                                                                                 50%
                                                                                                                climate
                                                                                                                change

   A crucial role in meeting France’s international                                              4BnB
                                                                                               +46
         commitment to development and,                                                        +
   since COP21, to fight against climate change                                                  n
                                                                                                                           14

                                                                                        10.3
AFD provides        The French State   French public aid                  9.4
a large part        has strengthened   objective to reach   8.3                                         0,55%
                                                                                                         GDP
of French           AFD’s capital:     0.55% of GDP
commitments         €2.4Bn             by 2022 set                               +1Bn
to reduce green     subordinated       by President                +1Bn          yoy
                                                                   yoy
house gases in      loans (Tier2)      Macron
the coming years    turned into Core                                                                                        5
                    Tier One capital                         3            3.58            4

                                                            2015          2016          2017                              By 2020
            Total of AFD group balance sheet:                 Commitments concerning climate change projects
                €39.7Bn as of 31 Dec. 2017                    Total commitments in €Bn
                                                              To reach 0,55% of GDB

September 2018                                                                                                                  5
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
AFD at
                Appropriate financial tools 2017 commitments
 a glance

                            €4Bn                                      €4.3Bn

                                              38%    41%       Loans to companies and
                        Loans to States                            local authorities

                          €1.4Bn                                     €0.6Bn
                                              15%    6%

                             Grants
                (projects grants to NGOs, C2D,                    Guarantees and
            delegation of funds from other donors)               equity investments
                                                                   Guarantees : €250Mn
                                                                 Equity Investment : €350Mn

September 2018                                                                                6
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
AFD at
             AFD and its foreign partners
 a glance

                                                                         Since October 2017,
                                                                         our CEO Remy Rioux
                                                                        has honour of leading
                                                                        the IDFC* which brings
                                                                              together 23
                                                                         development banks.

                                                                             With $630Bn of
                                                                        commitments per year,
                                                                           they are trying to
                                                                        reach ambitious goals
                                                                        in terms of sustainable
                                                                             development.

                                                                        It makes this worldwide
                                                                         organization the main
                                                                           provider of public
                                                                              finance for
                                                                             development.

                                                                          * International Development
                       Partnerships with IBRD, EIB, KFW, ADB, …                   Finance Club

            AFD is a recognized institution amongst Development Banks

September 2018                                                                                          7
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
Status & Credit profile

September 2018                             8
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
Status &       AFD: a financial institution of strategic importance
Credit profile   for the French State

A central role in the French government’s                                 Fully publicly owned
cooperation and aid policy

           Plays a major role in the government’s Official
            Development Assistance policy
           Funds part of the French State’s contribution
                                                                                French State
            to the IMF and World Bank
                                                                                     100%
                        A dual status

  A banking institution as       EPIC: Etablissement
  Financing Company              Public Industriel et
  (Société de Financement)       Commercial, immune to
                                 private-sector
  Regulated by the national      bankruptcy laws
  banking authority (ACPR),
  subject to CRR/CRD IV          By law, the French State
                                 has ultimate                                                  Other
  Risk weighting 20%             responsibility for AFD’s               Proparco
                                                                        (ownership
                                                                                            subsidiaries
                                 solvency (Law 80-539)                                       (Socredo,
                                                                          64.95%)
                                 AFD is under domestic supervision of                       Sogefom…)
                                 ACPR and Court of Auditors in
                                 particular

September 2018                                                                                             9
INVESTORS PRESENTATION - SEPTEMBER 2018 #WORLDINCOMMON - AFD
Status &       AFD benefits from High Quality Ratings
Credit profile

                    AA/AA rating linked to dual-entity status and public nature of AFD’s mission

                 AA/Outlook Stable                                    AA/Outlook Stable
                         Short-Term F1+                                      Short-Term A-1+

                           04/10/2017                                            20/02/2018

         “AFD ratings are aligned with those of the French       “Because AFD has EPIC status, we view the
         state, reflecting its strong legal status as an EPIC,   French government as ultimately responsible
         strategic importance to France, strong control          for AFD's solvency.”
         by the French state and, to a lesser degree,
         integration with the state.”
                                                                 “We therefore equalize our long-term rating on
         “EPIC status reflects the ultimate responsibility of    AFD with our long-term sovereign rating on
         the French state for AFD’s solvency and liquidity       France.”
         under the law of 16 July 1980. “
         “recent change of status does not affect the EPIC
         status“

September 2018                                                                                                    10
Status &               AFD : a recognized Corporate Responsibility
Credit profile

     AFD is rated by two of the world’s leading rating agencies in the segment of sustainable investments

Last update April 2018                      Last update september 2017 - AFD 2nd in the panel of 15 Specific Purpose Banks & Agencies

September 2018                                                                                                                          11
Financial Performance
                  & Risk Management

September 2018                           12
Financial
 perf. and
              Key figures
              IFRS (in €Mn)
Risk Manag.

              Net Banking Income                                    Loans Outstanding

                                     755
                          724                                                          31.123
                                           Growth over 2 years                                         Growth over 2 years
              594                                                           30.146

                                            +27.1%                                                     +13.2%
                                                                 27.504

              2015        2016      2017                         2015        2016      2017

                       Net Income                                                       Consolidated Capital

                                    313                                                  6.339

                                                                                                                            39.717
                           246
                                                                               5.860
                 173                                                                                               37.749

                                                                    5.561
                                                                                                          35.834

                                                                                                           2015     2016     2017
               2015       2016      2017                            2015       2016      2017
                                                                                                          Total balance sheet

September 2018                                                                                                                       13
Financial
 perf. and
              AFD Strong Capitalization
Risk Manag.

                                      2
                                      0
                                                     5.75%
                                      1                                                       Conversion of
                                                                         14.57%
                                      7                                                      €2.4Bn of T2 into
                                                                                               CET1 in 2016
                                      2
                                                    5.13%
                 CET1 Ratio           0
                                      1
                                      6                                   15.22%

                                      2
                                      0
                                                   4.50%
                                      1
                                      5                      8.70%                         Minimum regulatory levels

              Capital adequacy ratio                                                T1 Ratio

          2                                                          2
          0                   9.25%                                                  7.25%
                                                                     0
          1                                                          1
          7                               16.44%                     7                                  16.44%

          2                                                          2
          0                   8.63%                                                 6.63%
                                                                     0
          1                                                          1
                                          16.82%                                                        16.82%
          6                                                          6

          2                                                          2
          0               8.00%                                                    6.00%
                                                                     0
          1                                                          1
          5                               16.72%                                            9.42%
                                                                     5

September 2018                                                                                                         14
Financial
  perf. and
                Solid asset quality
 Risk Manag.

                                  Total outstanding as of 31 Dec.17                           €31.123Bn
                                                     Non-performing loans : 2.45%

                  Solid quality
CREDIT RISK       and
                  provisioning

                                                                          French
          A very                                                         Overseas
   conservative                                                             17%                              A low risk
                                         Non Sovereign
    provisioning                                                            Of which:
                                                                       2.4% non-performing                   portfolio
          policy                                33%                    33% provision on n-p
                                                                              loans
                                               Of which:
                                          4.8% non-performing
                                        69% provision on n-p loans

                                                                     Sovereign
                                                                       50%
                                                                                                          Reserve account
                                                                     Of which:                            which works as an
                                                                1% non-performing
                                                             100% provision on n-p loans                  implicit guarantee
                  Country
                                                                                                          from the French State
CONCENTRATION     lending limit
RISK              at 25% of
                  capital

 September 2018                                                                                                                   15
Financial
 perf. and
                 Conservative risk policy
Risk Manag.

                                     All issues and          Internal policy:
                                                                                                              No speculative
                                     loans swapped           •   Single currency                              trading
EXCHANGE /          Minimized        into Euros                  exposure < 1% of Consolidated
INTEREST            by internal      floating rate               Capital
                    policy and
RATE RISK           hedging                                  •   Global forex position
                                                                 < 2% of Consolidated
                                                                 Capital

                    Weekly ratings
                                           Minimum A1/P1 for short term             AAA/AA SSA euro zone for
COUNTERPARTY        monitoring             investments, except through              the investment portfolio with small
                    and collateral         UCITS (limited to 35% A2/P2)             limit until BBB rating for dynamic
RISK
                    contracts                                                       portfolio

                                                                                                                11%
                                     Treasury ≥       Investment &                            21%
                                                                                                                Covered Bond
                                                                                         EUR Zone
                     Very limited    6 months         LCR portfolio
LIQUIDITY RISK       exposure                                                            Agencies
                                     of cash          of €1.83Bn
                                     outflows         eligible to repo                  17%
                                                      market as of                 EUR Zone                               40%
                                                      31 July 2018                Sovereign         €1.83Bn               French
                                                                                                                          Agencies
                                                                                                                          and
                                                                                                                          Municipalities

                                                                                            19%
                                                                                            OAT

September 2018                                                                                                                     16
Capital Market Activities

September 2018                               17
Capital          Capital Market Highlights
   Markets          In €Mn

                  AFD's disbursements (loans)                                                              Funding program

10 000                                                                            12 000
                                                                                                                                                           10 000
                                                                          8 100
                                                                                  10 000
 8 000                                                            7 300                                                                            8 500
                                                          6 500                                                                            7 500
                                                                                   8 000                                           7 400
                                  5 597   5 800   5 800                                                                    6 770
 6 000                                                                                                             6 233
                          4 463                                                    6 000           5 100
         4 200                                                                             4 800           4 892
 4 000            3 400
                                                                                   4 000

 2 000                                                                             2 000

    -                                                                                 -
         2014     2015    2016    2017    2018    2019    2020    2021    2022             2014    2015    2016    2017    2018    2019    2020    2021    2022

                                                         Forecast                                                                      Forecast

                 An increasing trend towards funding :
                             An increase in the commitments of €1Bn per year until 2020 will impact disbursements
                             Upward trend to support disbursements growth
                             Amortization of older loans will partly finance this growth

September 2018                                                                                                                                                18
Capital         Our peers expected funding program in 2018
  Markets         In €Bn

        AFD in the French Agencies universe      AFD in the Development Banks universe

                                          6,77
                                                                            19,5   20

                                 5   5
                      4    4,2
            3,5
                                                                      9
                                                               8
                                                       6,77
    1                                            3,5

September 2018                                                                           19
Capital     AFD’s funding strategy
  Markets

                                         Public benchmarks on main debt
                                         markets to build a solid curve :
       Debt           Public Markets        EUR : across the curve potentially up to 20 years
                                            USD: focus on short and medium term tenors
   Programme
                                            Climate bonds

      €40Bn
  EMTN program
                    Private Placements   Proactive and flexible in currency

                      Medium term
 Neu MTN €2Bn                            Upon request
                        funding

  Neu CP €4Bn       Short term funding   For any adjustments

September 2018                                                                                   20
Capital       AFD’s funding strategy
  Markets

3 main priorities will feed into the development of volumes

Explore less used segments of the curve

           Short end (1 to 3 years)
           Long end (>12 years)

                    More active approach to the private placements market

                             Weekly prices on PPs
                             Non-vanilla coupon structures

                                         Climate bond

                                                  New framework has been designed since 2017
                                                  Issuances every 12 to 18 months

September 2018                                                                                  21
Capital        2018 funding program
  Markets

       Amount   Currency   Coupon   Tenor   Maturity     Type     vs. OAT
          24
         100
                  EUR
                  EUR
                           1,63%
                           1,00%
                                    25Y
                                    9,5Y
                                              juil-43
                                            janv-28
                                                        Private
                                                          Tap
                                                                    21
                                                                    22
                                                                                    2018 funding program
         100
          25
                  EUR
                  EUR
                           1,38%
                           1,60%
                                    14Y
                                    25Y
                                              juil-32
                                              juil-43
                                                          Tap
                                                        Private
                                                                    25
                                                                    22
                                                                                            €6.77Bn
          25      EUR      1,60%    25Y       juil-43   Private     22
2018
         500      USD       FRN      2Y      juin-20    Private
         100      EUR      0,38%    5,9Y     avr-24       Tap       20
        1 500     USD      2,75%     3Y     mars-21     Public
        1 400     EUR       1%      10Y     janv-28     Public      25
          50      EUR      1,59%    20Y     janv-38     Private     15
         200      EUR       0%       2Y     janv-20     Private    19,5
        3 658   €Mn eq.
                                                                             60% to 80%
         200      USD       FRN     1,8Y    sept-19       Tap
                                                                                                      20% to 40%
         100      EUR      1,11%    13,5Y   juin-31     Private     24
         750
         205
                  EUR
                  EUR
                           0,13%
                           1,72%
                                      6Y
                                     20Y
                                            nov-23
                                             oct-37
                                                        Climate
                                                        Private
                                                                    24
                                                                    24
                                                                            Public issues               Private
         500
         150
                  USD
                  EUR
                            FRN
                           1,38%
                                      2Y
                                     15Y
                                            sept-19
                                             juil-32
                                                        Private
                                                          Tap       28       EUR 1Y → 15Y             placements
2017    1 250     USD      1,88%      3Y    sept-20      Public              USD 2Y → 5Y
         350      EUR      1,38%     15Y     juil-32      Tap       29
          50      AUD      3,54%     10Y     juil-27    Private
         300      USD       FRN       2Y     juil-19    Private
        1 000     EUR      1,38%     15Y     juil-32     Public     33
         250      EUR      0,38%      7Y     avr-24       Tap       15
        1 500     EUR      0,13%      5Y     avr-22      Public     18
        6 233   €Mn eq.
        1 000     EUR      0,13%     5Y      avr-21     Public      23
         150      EUR      0,00%    2,5Y    déc-18      Private     19
          50      EUR       FRN      2Y     févr-18       Tap       18

2016
         200
         250
                  USD
                  EUR
                            FRN
                           0,88%
                                     2Y
                                    15Y
                                            mars-18
                                            juin-31
                                                        Private
                                                        Private    16,8
                                                                                        Ticker AGFRNC
        1 500     EUR      0,25%    10Y      juil-26    Public      17
        1 000     USD      1,38%     3Y     août-19     Public
         850      EUR      0,38%     7Y      avr-24     Public      15
        4 892   €Mn eq.

September 2018                                                                                                     22
Capital                 Redemption profile
  Markets

                                        Market debt outstanding under EMTN program as of 31 July 2018 : €30.99Bn

                                                                                                  EUR            USD           Other
4 500,00                                                                                                                                     1%   22%
4 000,00

3 500,00

3 000,00

2 500,00

2 000,00

1 500,00

1 000,00                                                                                                                               76%

 500,00

      -
            2018
                   2019
                          2020
                                 2021
                                        2022
                                               2023
                                                      2024
                                                             2025
                                                                    2026
                                                                           2027
                                                                                  2028
                                                                                         2029
                                                                                                2031
                                                                                                       2032
                                                                                                              2037
                                                                                                                     2038
                                                                                                                            2043

September 2018                                                                                                                                          23
Capital    Investor Distribution Overview: Public Issues (2013-2017)
  Markets

      Breakdown by Geographic Region                Breakdown by Investor Type

September 2018                                                                   24
AFD Climate Bond Framework

September 2018                                25
Climate      AFD Climate Bond Framework
   Bond
Framework

           Structured approach

                    − A framework set up in 2017
                    − Including Eligible Climate Projects, in a number of sectors addressing both mitigation and
                      adaptation needs

           To ensure a more frequent presence on the green bond market

                    − Frequent presence (every 12 to 18 month minimum)
                    − Benchmark size
                    − Different tenors

           A framework fully aligned with the Green Bond Principles and reviewed by CICERO as SPO

September 2018                                                                                                 26
Climate
   Bond
                  1. Use of proceeds
Framework

           Projects taking place in all geographies covered by AFD Group
           Future and existing projects initiated after January 1st 2011
           Projects adressing climate divided into 3 categories

   Mitigation projects                                                             Adaptation projects
                                                   Climate Bond
 Resulting in a reduction
                                                    Framework
 of GHG emissions by at
   least 10Kt eq./year                                                            Limiting vulnerability to
                                                                                     climate change
    Sectors financed:                                                                 consequences

   - Renewable energy                                                                Sectors financed:
     - Energy efficiency
         - Fuel switch                                                            - Water management
    - Low carbon public                                                           - Waste management
        transportation             Mitigation                        Adaptation      - Stress-resilient
          - Biological                                Mixed
                                                     projects                       agricultural systems
        sequestration               projects                           projects
  - Water management
  - Waste management

September 2018                                                                                           27
Climate
   Bond
                 1. Use of proceeds
Framework

           Mitigation projects

                    − Renewable energy :
                    AFD participated in the cofinancing of Ouarzazate’s solar program (total power of more
                    than 500MW, among a Moroccan plan of 2 000MW) through two AFD loans totalizing EUR
                    150M, whose impact is evaluated at 1 200 Ktons eq / year
                    https://www.afd.fr/fr/la-plus-grande-centrale-solaire-du-monde-ouarzazate

                    − Low carbon public transportation :
                    Namma metro in Bengalore: A USD 1.3 billion program to build about 100 kilometers of
                    railway. AFD loaned EUR 110M toward the program, which is co-financed by Japan (JICA)
                    and the Asian Development Bank. After completion, the metro will carry 1.5 million
                    passengers per day. Impact : reduction of CO2 emissions by 230 Ktons eq / year
                    http://www.afd.fr/base-projets/consulterProjet.action?idProjet=CIN1062

September 2018                                                                                          28
Climate
   Bond
                 1. Use of proceeds
Framework

           Adaptation projects

                    − Water Management :
                    A 42M€ loan in Tunisia to depollute shorelines and improve sanitation service. Estimated
                    impacts : 60 000 new people connected to sanitation service, access to a better sanitation
                    service for 1 233 000 people, improved and installed water treatment capacity over 115 000
                    m3/day
                    https://www.afd.fr/en/depollutingmediterranean?origin=https%3A//www.afd.fr/fr/page-
                    region-pays/tunisie

                    − Water Management :
                    A 40M$ loan in Jordan to supply the governorates of Irbid, Ajloun and Jerash with water
                    https://www.afd.fr/fr/print/pdf/node/3265

September 2018                                                                                                 29
Climate
   Bond
                       2. Process for project evaluation and selection
Framework                      1. A two layer scrutiny mechanism

                  General project evaluation and governance framework
                   This process applies to every AFD project regardless of the climate bond framework

     Identification committee                             Credit committee                         Board Approval

   Systematic carbon footprint computation         Formal analysis of environmental            Sustainable Development
   performed by project team and reviewed
              by climate experts
                                                    and social risks by specialized                     Opinion
     Preliminary sustainable development          experts, independent from project            Independent from project
            analysis by project team                             team                                    team

                             Dedicated climate projects selection process
          This governance has been specifically designed for the purpose of the climate bond framework

                                             Selection committee: meets on a bi-annual basis

                                                 Supervision of the reporting and the
   Supervision of the asset pool
                                                 production of indicators:                New reporting methodologies
   - New entries
                                                 - Availability                           Inclusion of new project lines
   - Exclusion of projects
                                                 - Quality

September 2018                                                                                                             30
Climate
       Bond
                         2. Process for project evaluation and selection
    Framework                  2. Carbon footprint methodology

     Gases measured : Carbon Dioxide (CO2), Methane (CH4), Nitrous Oxide (N2O), etc.

     CO2 equivalent: a common measurement unit for GHG impacts – 100-year Global Warming Potential (GWP)

     Sources of emissions :         - Project ‘Construction Phase’ emissions sources
                                     - Project ‘Operating Phase’ emissions sources

     Scope The methodology used to measure the GHG emissions of AFD-financed projects accounts for direct and indirect
      emissions, both up- and downstream from a project, as per Scopes 1, 2 and 3.
                −   Scope 1 = Direct GHG emissions, from sources directly related to a project’s activity, e.g., combustion, etc.
                −   Scope 2 = Electricity indirect GHG emissions, from the generation of purchased electricity and/or heat
                    needed for the project’s activity.
                −   Scope 3 = Other indirect GHG emissions, from the production of materials purchased from other parties and
                    used in the project’s activity, e.g., production and/or extraction of purchased materials, waste disposal, and
                    use of sold products and services.
     Project lifetime
                −   Standard lifetimes are set as:
                       • 50 years for dams
                       • 30 years for transportation infrastructure
                       • 20 years for other projects
     Reference situation
                −   Standard reference situation represents a situation without the project
                −   EXCEPT for renewables, where the reference situation represents the country’s energy mix, transportation
                    projects and energy efficiency where alternative scenarios are used.

September 2018                                                                                                                  31
Climate
   Bond
                   2. Process for project evaluation and selection
Framework                3. Ensuring and promoting sustainable development in operations

   Step 1 – Identification of the projects :
      -      Exclusion list
      -      Criteria for sustainable development (positive impacts of the projects):
             •   Sustainable and resilient growth
             •   Social well-being and inequalities reduction
             •   Gender equality and empowerment of women and girls
             •   Biodiversity protection and natural resources management
             •   Transition to a low carbon development (mitigation)
             •   Resilience to Climate Change (adaptation)
             •   Governance and lost lasting effects of the project

      -      E&S categorization that reflects the "level of E&S risk" of the project based on the nature of the
             operation, location and sensitivity of the affected area, the severity of the potential E&S risks and
             impacts, client’s capacity to manage them:
             •   Category A [High Risks]: Negative impacts may extend beyond the area of ​infrastructure right-
                 of-way or extend beyond the period of construction and operation.
             •   Category B + [Significant risks]: Negative impacts may extend beyond the area
                 of ​infrastructure right-of-way or extend beyond the period of construction and operation but
                 be easily identified and mitigated by appropriate measures.
             •   Category B [Moderate Risks]: Negative environmental or social impacts that are potentially
                 reversible, or limited in space and time, and whose sensitivity to the environment is less. They
                 can be easily identified and mitigated by appropriate measures.
             •   Category C [Low Risk]: Potential negative environmental or social impacts are minimal or non-
                 existent

September 2018                                                                                                       32
Climate
   Bond
                  2. Process for project evaluation and selection
Framework                3. Ensuring and promoting sustainable development in operations

   Step 2 – Evaluation of the project :
      -      E&S Due-diligences and standards depending on the categorization:
             • Different tools for the E&S assessment: E&S Impact Assessment, Resettlement Action Plan, E&S
                audit, and specific studies depending on the risks (gender action plan, biodiversity plan,
                vulnerability study…)
             • In line with local regulations and World Bank Standards for A/B+ projects
             • In coordination with the feasibility studies
             • Before financing approval

   Step 3 – Loan agreement
      -      E&S clauses are compliant with regulation and standards, reporting…
      -      E&S Commitment Plan for A/B+/B projects; will define specific E&S clauses to mitigate negative
             impacts, based on the gaps identified during the Due-Diligence

   Step 4 – Monitoring during the execution of the project
      -      Based on E&S reports, E&S audits, AFD E&S experts’ visits
      -      To ensure effective implementation of the defined measures of the ESMP, RAP and ESCP
      -      To identify any unforeseen event (accident, complaint…)
      -      To adapt if needed the E&S management system of the project
      -      To support the beneficiary in improving the E&S performances of the project
      -      Complaint mechanism

September 2018                                                                                                33
Climate
   Bond
                  3.     Management of proceeds
Framework

      Assets and liabilities perspective

      Volume of issues ≤ 75% asset pool

      Insures immediate use of the sums invested

      Allows the substitution of some assets in the pool, in case of controversies, or if data is insufficient for
       example

      Very flexible approach in terms of tenors and volume

September 2018                                                                                                        34
Climate
       Bond
                     4. Reporting
    Framework

     Reporting is published on a yearly basis
      https://www.afd.fr/en/corporate-social-responsibility-csr-afd-
      2017

     In order to provide the investors with some context, it is
      embedded into the corporate social responsibility report

     Report on assets and liabilities

     For mitigation projects : Carbon footprint by sectors and by
      regions + examples

     For adaptation projetcs : examples + output measures when
      available and relevant

     Budget support projects included in the pool if and only if
      reporting methodology (still to be designed) is deemed sound
      enough by the selection committee

September 2018                                                         35
Climate
   Bond
                 4. Reporting
Framework           1. Pool of assets versus bonds

                                                 Climate Bonds

                                                 Climate Assets

September 2018                                                    36
Climate
   Bond
                 4. Reporting
Framework           2. Pool of assets

September 2018                          37
Climate
   Bond
                 4. Reporting
Framework           3. Mitigation

                                      €4.6bn         €2.4bn
                     100 Projects
                                    Commitments   Disbursments

September 2018                                                   38
Climate
   Bond
                 4. Reporting
Framework             4. Adaptation

                                                €522M                     €300Mn
                        15 Projects
                                              Commitments              Disbursments

                                          Review of adaptation projects :
             https://www.afd.fr/sites/afd/files/2018-07-09-37-24/reporting-climate-bond-afd-2017.pdf

September 2018                                                                                         39
Climate
   Bond
                 External review
Framework

       AFD’s Climate Bond Framework

    https://www.afd.fr/sites/afd/files/2017-10/afd-climate-bond-framework.pdf

       Climate Bond Framework reviewed by Cicero

          -   Overall assessment : « medium green »
          -   According to Cicero’s rating sectors, 66% of AFD’s projects in the 2016 Climate Bond reporting
              would have been « dark green »
          -   Strong governance structure
          -   https://www.afd.fr/sites/afd/files/2017-10/cicero-second-opinion-afd-climate-bond-
              framework.pdf

       Annual reporting certificated by AFD’s auditors

    https://www.afd.fr/sites/afd/files/2018-07-04-48-18/AFD-reporting-climate-bond-en.pdf

September 2018                                                                                                 40
AFD Highlights

   The French bilateral aid agency
      -   Established in 1941, entirely state-owned and controlled by the State, AFD benefits from the EPIC status
      -   Fulfil the ODA and Climate Change government policy
      -   Activity boosted with adding EUR 4Bn, + EUR 1Bn per year of commitments from 2016

   Fully regulated by the ACPR (Autorité de Contrôle Prudentiel et de Résolution)
      -    Strong Basel II Capital Adequacy Ratio at 16,44%
      -    Strong Tier One ratio at 14,57%

   AA / AA ratings by Fitch and S&P
      -   Conservative credit risk and provisioning policy backed by French State guarantees for non-
          performing sovereign loans
      -   Prudent market risk management framework

   Recurrent EUR and USD Benchmark Issuer
      -   20% risk weighting under Basel II
      -   Euro transactions are ECB eligible as “Recognised Agency”
      https://www.ecb.europa.eu/ecb/legal/pdf/oj_jol_2016_014_r_0006_en_txt.pdf
      https://www.ecb.europa.eu/mopo/assets/standards/marketable/html/index.en.html

   “Advanced” overall CSR performance by Vigeo and “Prime status” by Oekom
   Climate Bond Framework assessed “medium green” by Cicero

September 2018                                                                                                  41
FINANCIAL DEPARTEMENT

            Françoise LOMBARD
           Chief Financial Officer

                Bokar CHERIF
     Head of Treasury and Capital Markets

            Thibaut MAKAROVSKY
   Head of Funding and Market Operations

            Samia BEN MEBAREK
Deputy Head of Funding and Market Operations

      Margaux ADIDA & Rudy NAKACHE
             Funding Officers

             _afd_funding@afd.fr

                                               42
5, rue Roland Barthes 75598 PARIS CEDEX 12
                www.afd.fr

                                             43
Disclaimer
The information, statements and opinions expressed in this presentation (the “Content”) do not constitute and shall not be
deemed to constitute: (i) any offer, invitation or inducement to sell a security or engage in investment, financial or other similar
activity; or (ii) a solicitation of an offer to buy any security; or (iii) any recommendation or advice in relation to any investment,
financial or other decision. Persons considering making any investment or financial decision should contact their qualified
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The Content contains financial information regarding the businesses and assets of AFD. Such financial information may not have
been audited, reviewed or verified by any independent accounting firm. The Content includes certain financial metrics which
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should not be considered as alternatives to profit after tax, operating profit or other performance measures derived in
accordance with IFRS or as an alternative to cash flow from operating activities as a measure of AFD's activity.

The Content may include forward looking statements, in particular, in relation to future events, growth, future financial
performance, plans, strategies, expectations, aims, prospects, competitive environment, regulation and supply and demand.
Words such as “anticipates”, “believes”, “estimates”, “expects”, “intends”, “plans”, “projects”, “may” and similar expressions are
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This presentation is confidential and is being submitted to selected recipients only and may not be reproduced (in whole or in
part), distributed or transmitted to any other person without the prior written consent of AFD. The Content is not directed at, or
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communicated in accordance with the Order.

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