PROPARCO AT

A GLANCE

OUR MISSION

€5bn

Strengthen the private sector’s contribution to achievement of the Sustainable Development Goals (SDGs)

ON THE BALANCE SHEET

OUR TOOLS Loans — Equity and quasi-equity investments — Investment funds — Guarantees — Technical assistance

OUR ADDED VALUE + Expertise spanning multiple sectors and geographies + Ability to organise complex projects + An international network + Catalyst role (arrangement, syndication, credit facility management) + Effective risk management (credit risk, environmental and social risks, etc.) + Financial strength (as part of the AFD Group)

OUR AREAS OF INVESTMENTS Agriculture and agribusiness Banks and financial markets Climate Education Industry

PROPARCO, AN INSTITUTION SERVING THE PRIVATE SECTOR AND SUSTAINABLE DEVELOPMENT

Infrastructure (energy, telecommunications, transport, water and sanitation, etc.) Microfinance Health Tourism

80

TARGET COUNTRIES

438

CLIENTS

Proparco – a subsidiary of Agence Française de Développement (AFD) devoted to private-sector funding – has been supporting sustainable economic, social and environmental development for almost 40 years. Operating in Africa, Asia, Latin America and the Middle East, the institution provides loans, makes equity investments and provides guarantees to help finance and support financial institutions and corporate private-sector projects. Proparco focuses on the key development areas, such as renewable energy-based infrastructure, agribusiness, financial institutions, health and education. Through its work, Proparco seeks to strengthen the contribution of private enterprise to the achievement of the Sustainable Development Goals (SDGs) adopted by the international community in 2015. To do so, Proparco supports companies likely to create jobs, supply essential goods and services and, more broadly, help reduce poverty and mitigate climate change.

Moreover, to achieve its aims, Proparco takes a broad-based approach to governance. Alongside majority shareholder AFD, its governing bodies include public- and private-sector financial institutions from France, the rest of Europe, Africa and Latin America. Proparco has a staff of over 200, divided up between Paris and its 11 offices abroad. Proparco can also rely on AFD’s worldwide network of 72 agencies and offices around the world. In addition to providing financing, its role is to promote the emergence of responsible business and financial organizations in developing and emerging economies. Proparco also assists its clients in improving their environmental, social and governance performance. Proparco is one of Europe’s leading development finance institutions, and spearheads a large number of joint programs with its peers.

PROPARCO AT A GLANCE I

3

STRATEGY

THE AFD

THE 10 GOALS OF OUR STRATEGY FOR 2014–2019 01.

our clients enhance their environmental 06. Help and social performance and governance, in

Focus 30% of our activity on projects that help combat climate change.

particular by providing technical assistance.

02.

Support development in Africa by providing financing of at least €3.7bn during the period (equal to nearly 50% of our activity).

03.

Dedicate 25% of our activity to least advanced, low-income, transition or post-crisis countries.

04.

05.

Increase the weight of equity and quasiequity investments and subordinated loans in our portfolio from 14% to 30%.

Ramp up our education and health work to a total of 7% of our portfolio by 2019.

€

?

07.

Develop our social business offer by funding more companies active in the inclusive economy.

08.

Devote 10% of our equity investments a year to early-stage companies.

results and impact of projects 09. Measure we finance to assess their contribution to development.

10.

Strengthen our partnerships with our fellow development finance institutions and stakeholders.

THE AFD – FRANCE’S KEY DEVELOPMENT INSTITUTION The AFD is a public institution that has been instrumental for over 75 years in fighting poverty and encouraging development in the South and the French Overseas Territories. The AFD implements the French government’s development policy. Through its network of 72 agencies and offices around the world – including nine in the French Overseas Territories and one in Brussels – the AFD finances and supports projects that improve living conditions, support economic growth and protect the planet.

I PROPARCO AT A GLANCE

The benefits of being an AFD subsidiary Proparco benefits from the financial robustness of a shareholder with an excellent credit rating; Proparco can increase its lending capacity with AFD backing; A service agreement ensures AFD support in terms of logistics, internal auditing, human resources, IT and back office;

8,3

€ bn  committed by the AFD Group in 2015 for development. 4

In 2015, the AFD provided a total of €8.3bn to finance project financing in developing countries and the French Overseas Territories. Those projects cover such fields as education for children, maternal health, promoting gender equality, supporting farmers and small enterprises, increasing access to water, energy and mass transit, and mitigating climate change.

Proparco draws on the expertise of AFD staff in such areas as agriculture, health and education;

PROPARCO AT A GLANCE I

5

SHAREHOLDER BASE

GOVERNANCE

A MIXED SHAREHOLDER BASE

A SOLID INSTITUTIONAL FRAMEWORK

In addition to the AFD, its majority shareholder, the shareholder base spans a broad range of public and private financial organizations – from France, elsewhere in Europe, Latin America and Africa – along with service companies, industrial firms and funds and ethical foundations.

What distinguishes Proparco’s governing bodies is diversity, and that diversity guarantees transparent operations and proper management. At the same time, the participants provide the institution with solid strategic management and governance expertise, adding real value to its approach to project financing.

Proparco today has some thirty shareholders from a wide variety of backgrounds, which is one of its strengths, particularly because what this community of investors from the North and South shares is a commitment to sustainable development. Ever since Proparco first offered shares to outside investors in 1990 and they successively acquired stakes, those shareholders have played a crucial role in the strategic management and good governance of the institution. Since it was founded in 1977, Proparco’s share capital has risen from €1.5m to €693m today.

64,2 % AGENCE FRANÇAISE DE DÉVELOPPEMENT • BPCE IOM 21,7 % • CDC Entreprises ELAN PME (Bpifrance) FRENCH • BNP Paribas FINANCIAL • Crédit Agricole SA ORGANIZATIONS • Société Générale

11,8 % INTERNATIONAL FINANCIAL ORGANIZATIONS

• Development Bank of Southern Africa (DBSA) • Banque Marocaine du Commerce Extérieur (BMCE) • Corporación Andina de Fomento (CAF) • Aga Khan Fund for Economic Development (AKFED) • DEG • West African Development Bank (WADB) • Bank of Africa Group (BoA Group SA)

1,7 % CORPORATES

• ENGIE • Bouygues Group • Bolloré Africa Logistics • Saur International • Somdiaa • SIPH • Socotec International

• Amundi AFD Avenirs durables 0,6 % • Natixis Solidaire FUNDS & • Jean-Pierre Gonon ETHICAL FOUNDATIONS

6

I PROPARCO AT A GLANCE

Proparco’s leading structures (Board of Directors and Investment Advisory Committee) include: 1. AFD representatives. 2. Representatives of French public institutions and private financial and industrial companies, as well as of African and Latin American institutions and companies.

3. Representatives of the Ministry of Economy and Finance, the Ministry of Foreign Affairs and International Development and a Government Commissioner. 4. Independent members.

The board of directors

The investment advisory committee

The Board of Directors comprises 14 directors appointed by the AFD and the other shareholders, 2 independent directors and 6 non-voting members representing shareholders, the Ministry of Economy and Finance and the Ministry of Foreign Affairs and International Development.

The Investment Advisory Committee is called upon by Proparco’s senior management to issue an opinion on financing facilities of less than €30m, which do not require prior approval by the Board of Directors.

Other members include a staff representative and a Government Commissioner.

The Investment Advisory Committee comprises 13 to 16 members, who are representatives of the AFD, Proparco’s Board of Directors and the French supervisory authorities.

PROPARCO AT A GLANCE I

7

NETWORK

AN INTERNATIONAL PRESENCE PARIS Proparco’s Headquarters

Proparco’s work potentially targets all countries eligible for Official Development Assistance. Today the institution operates in over eighty countries spanning four continents, from major emerging markets to the least developed countries.

ISTANBUL Turkey, Middle East Central Asia, Caucasus, Eastern and Southern Europe

CASABLANCA North Africa LAGOS Nigeria

MEXICO CITY Central America and the Caribbean ABIDJAN West Africa

SÃO PAULO South America

DOUALA Central Africa

NEW DELHI South Asia BANGKOK North and Southeast Asia

NAIROBI East Africa

JOHANNESBURG South Africa and Indian Ocean

Our 11 offices and the areas they cover around the world.

8

I PROPARCO AT A GLANCE

PROPARCO AT A GLANCE I

9

TARGET SECTORS

EXPERTISE IN THE KEY DEVELOPMENT SECTORS

AGRICULTURE AND AGRIBUSINESS BANKS AND FINANCIAL MARKETS

In line with AFD’s strategic direction and the priorities of France’s development policy, Proparco focuses its support on key sectors for economic growth, job creation and delivery of essential goods and services to the population.

Its goal is to promote approaches to farming and agribusiness that are more productive, but at the same time more environmentally friendly and more energy-efficient, approaches that increase wealth and create decent jobs. Our financing goes to a wide range of people and organizations, from local growers and farmers to transport and/or logistics companies. The purposes it serves are equally varied: • structuring value chains in order to facilitate contractual arrangements between small-scale farmers and agribusiness; • developing processing activities to increase added value in producing countries; • creating and improving logistics infrastructure; • disseminating high environmental and social standards; • giving farmers and agribusiness companies access to financing by providing dedicated lines of credit to banks and other financial institutions serving the sector.

10

I PROPARCO AT A GLANCE

CLIMATE

Enterprises, both large and small, are among the key economic growth drivers in the Southern Hemisphere. However, insufficient access to medium- and long-term credit still hinders many of them, above all SMEs. Proparco provides financial institutions with the foreign and local currency funding they need to grow and enhance their ability to finance local businesses. Its support goes to banks, non-banking financial institutions (for example, institutions specialized in mortgage credit or financing the agricultural sector), as well as insurance and microinsurance companies. In Sub-Saharan Africa, Proparco offers clients long-term loans and equity financing. In emerging economies, the emphasis is on lines of credit dedicated to specific sectors such as agriculture and renewable energy.

The AFD Group today is one of the Development Finance Institutions most committed to the fight against climate change. Like its parent company, Proparco has initiated a bold climate strategy, pledging to have at least 30% of its annual financing produce climate-change co-benefits. Renewable energies and energy efficiency are key components of its strategy. They represent a response to the interrelated challenges of ensuring energy security in developing countries and promoting green growth that is less dependent on fossil fuels. To meet those challenges, Proparco teamed up with the AFD and its European counterparts to create the Interact Climate Change Facility, a facility that uses their combined resources to finance renewable energy and energy efficiency projects in the private sector. Since 2005, Proparco has devoted more than €2bn to climate change mitigation.

PROPARCO AT A GLANCE I

11

TARGET SECTORS

HEALTHCARE INFRASTRUCTURE

EDUCATION The acquisition of knowledge and skills – from primary to higher education – is a prerequisite for the social and vocational integration of young people and sustainable economic growth. Public services in developing countries unfortunately tend to be too weak to be able to respond to the challenges at hand. Against this background, the increasing involvement of private-sector organizations working to provide high-quality education contributes to strengthening educational systems in developing countries. For that reason, Proparco provides the private sector with financing: • To build, extend and equip secondary schools, universities and institutes of technology • To provide both initial training and work-study opportunities, including apprenticeships and in-service training, to help young people to acquire skills that they can put to effective use, both as citizens and in the labor market.

12

I PROPARCO AT A GLANCE

MICROFINANCE

Rising life expectancy and the high prevalence of infectious diseases create unprecedented challenges for healthcare systems in developing and emerging economies. To tackle those challenges, a promising approach involves effective cooperation between the public and private sectors to organize healthcare services and sustainably increase their availability. Proparco co-finances high-quality private hospitals, clinics and other healthcare institutions and assists them as they invest to expand their facilities, equip their various wards and more. Proparco supports the manufacture and distribution of affordable local drugs by financing pharmaceutical laboratories and companies and promoting the SouthSouth transfer of technologies. In some cases, this means directly financing private firms in the sector; in others, working through investment funds and other intermediaries.

Infrastructure is one of Proparco’s traditional sectors of operation. Efficient infrastructure is critical to delivering essential services to the population, attracting private investment and reinforcing the local economy. Proparco accordingly steps in to help finance: • Large-scale energy projects, often involving conventional sources in the least advanced or post-crisis countries, but otherwise focused on renewable energies • The extension of mobile phone networks and the deployment of high-speed internet access infrastructure to help reduce the digital divide • The construction, extension and upgrading of rail, highway, port and airport facilities, which play a crucial role in structuring trade and making local production competitive • Sustainable drinking water management through improved network management, increased water collection and waste water treatment capacity in countries subject to high water stress.

Since microfinance came into being in the 1970s, it has demonstrated not only that financial services tailored to the poorest are useful and necessary, but that they can also be profitable. They allow people who are not eligible for banking services but who wish to start a business, replace farm equipment and the like to access financial services tailored to their needs and to their repayment ability. Proparco provides technical and financial support for the emergence and development of robust, responsible organizations, from microfinance institutions to banks and funds investing in the microfinance sector. Through loans and equity investments, Proparco helps to strengthen local lending capacity and contributes to the financial soundness and stability of microfinance organizations.

PROPARCO AT A GLANCE I

13

DÉVELOPPEMENT DURABLE SUSTAINABLE DEVELOPMENT

PROMOTING A RESPONSIBLE PRIVATE SECTOR IN DEVELOPING COUNTRIES Encouraging the private sector to act responsibly in the developing and emerging countries is an integral part of Proparco’s mission. The institution helps clients improve their environmental and social performance, while contributing more fully to local development.

The private sector is a vital contributor to sustainable development. Strong commitment by private businesses to the highest social, environmental and governance standards – covering issues ranging from working conditions and non-discrimination to pollution reduction and promotion of renewable energies – is essential, including to their own long-term prosperity. The role of development finance institutions is to support and further just such commitment. ENCOURAGING SUSTAINABLE BUSINESS MODELS

104 companies, financial institutions, infrastructure

projects or funds got Proparco assistance with improving their E&S performance since 2013.

14

I PROPARCO AT A GLANCE

For several years, Proparco has been engaged in a formal approach to evaluating and improving its clients’ E&S practice. This ensures that they are committed to controlling the risks attendant on their projects and to improving their E&S performance.

Governance as a tool for promoting responsible investmenT

The need to promote good governance has emerged as a major concern. In 2014, 34 development finance institutions, including Proparco, pledged to conduct systematic evaluations of governance at client firms and to work together to develop the requisite analytical tools.

PROMOTING CORPORATE SOCIAL RESPONSIBILITY

LIMITING ECOLOGICAL FOOTPRINT

FOSTERING INCLUSIVE DEVELOPMENT

Proparco makes sure that its clients – and more broadly the suppliers and subcontractors in their value chain – offer working conditions that comply with international labor standards on such issues as consultation with workers, occupational health and safety and non-discrimination. Whenever infrastructure projects cause population displacement or disrupt existing economic activities, Proparco demands that its clients devise plans for resettling the affected population groups and/or preserving their previous sources of livelihood. Proparco also ensures that the companies it finances have fully operational arrangements for handling complaints from workers or nearby communities. .

To Proparco, promoting responsible financing also means encouraging clients to lower their pollution levels, limit their use of natural resources (water and energy in particular) and cut their greenhouse gas emissions. This includes supporting the installation of special equipment to raise the energy efficiency of buildings. To preserve biodiversity, Proparco does its utmost to prevent the destruction of natural environments with high ecological values or, if need be, to ensure compensation for any such destruction. For example, Proparco has made plans to manage biodiversity in affected areas a prerequisite for its support for agribusiness, infrastructure and similar projects.

Proparco pays special attention to ensuring access for local communities to the services provided by its clients. In education for example, this may involve encouraging clients to develop scholarships or study grants for deserving students from modest backgrounds. Moreover, Proparco measures positive spillover from its clients’ business and their contribution to tax revenue.

Proparco already performs a governance review for its equity investments. The process focuses on the shareholders, the board of directors, internal controls and the transparency and disclosure of financial and other information. This makes it possible to identify and provide details for the key ways in which Proparco can offer its clients support, including technical assistance.

PROPARCO AT A GLANCE I

15

INVESTMENT POLICY

FINANCIAL TOOLS

A WIDE RANGE OF FINANCING SOLUTIONS

HOW PROPARCO INVESTS? For Proparco, a “good project” is one that is in line with its mandate and strategic direction, that is led by a sound client and that will have a social and environmental impact on local development.

Proparco provides financing on market terms, in euros, USD or local currency, with the aim of supplementing the activity of local and international commercial banks rather than substituting for them.

Investment conditions and principles TARGETS

ADDITIONALITY

KNOCK-ON EFFECT

Proparco supports the development of companies and financial institutions that are active in areas of key importance to development, both local organizations and international companies (particularly French) with operations in developing countries or seeking to develop subsidiaries there.

Proparco works to supplement the activity of local and international commercial banks, but without coming into competition with them. Its operations focus on areas where its assistance is most needed and where it has the highest added value, particularly nonfinancial assistance.

Proparco’s financing aims to demonstrate the economic and financial viability of private enterprise in businesses and/or regions that investors tend to consider too risky. In this sense, Proparco’s operations have a significant knock-on effect.

CLIENT RELIABILITY

PROJECT PROFITABILITY

DEVELOPMENT IMPACT

All financing decisions are based on an in-depth analysis of the various risk factors related to clients and their projects: credit risks, environmental and social risks, etc.

Projects cannot last unless they are profitable. Moreover, profitability is critical to the business model of an organization like Proparco, as well as to its ability to win over additional providers of funding.

The contribution that the companies it finances make to local development is central to Proparco’s approach to investment.

Proparco offers three types of financing solutions that cover the bulk of the financing needs of the private sector in developing and emerging countries.

LONG-TERM LOANS

EQUITY INVESTING TO BOOST GROWTH

GUARANTEES TO ENERGIZE FINANCIAL MARKETS

Proparco offers companies and financial institutions loans in foreign or local currency (from €3m to €100m) with long maturities (up to 20 years), and a grace period for the repayment of capital where warranted. Such financing is tailored to the environment and needs of clients.

Proparco also uses various equity instruments: •acquisition of minority interests held directly or indirectly – via financial intermediaries, particularly investment funds – in the capital of companies •subordinated and participating loans •shareholder current accounts •ordinary or mandatory convertible bonds, etc. As a result, companies get access to the capital that they need to grow their business and hands-on assistance in crafting strategy, improving governance and accessing international business networks.

The Proparco signature provides clients with a solvency or liquidity guarantee. Proparco guarantees may take a variety of forms and apply to different kinds of underlying products (e.g., to loans in foreign or local currency, to bonds, to listed UCITS).

The institution offers comprehensive financing solutions and can syndicate large loan amounts through a variety of mechanisms put in place with its counterparts in Europe (e.g., DEG, FMO) and elsewhere.

MEASURING DEVELOPMENT IMPACT During project appraisal, Proparco uses a tool that is common to several European institutions to assess this contribution and effectively direct its investments: the GPR CorporatePolicy Project Rating methodology devised by its German counterpart DEG, but tailored to Proparco’s needs.

16

I PROPARCO AT A GLANCE

Four main criteria are examined: • Expected impact on development; • Profitability; • Level of risk; • Fit with Proparco’s strategy.

Enriched with qualitative analysis, these indicators enable ex ante project assessments (forecasting and estimates) as well as the identification of paths to improvement to help Proparco clients enhance their performance.

In this way, Proparco makes it easier to mobilize resources from banks and institutional investors, and can have considerable impact on financial market liquidity.

2019 target: increase the weight of equity and quasiequity investments and subordinated loans in our portfolio from 14% to 30%. PROPARCO AT A GLANCE I

17

FINANCING TOOLS

TECHNICAL ASSISTANCE

STRENGTHENING THE CAPABILITIES OF CLIENT COMPANIES Companies and financial institutions not only need financing. They also need assistance in implementing their projects and improving their practices, particularly environmental, social and governance practices.

FISEA – A FUND FOR AFRICAN BUSINESSES

250 M allocated to the fund

€

—

49 projects — €169 M invested at

Feb. 29th, 2016

Through the Investment and Support Fund for Businesses in Africa (FISEA), Proparco also makes equity investments in businesses, banks, microfinance institutions and investment funds operating in Sub-Saharan Africa. With an investment target of €250m, the fund is one of the key components of France’s policy of promoting growth and jobs in Africa, launched in 2008. Its purpose is to support employment-generating businesses and financial institutions by providing them with equity financing and assistance with investment management. Held by the AFD and advised by Proparco, FISEA targets regions that are more unstable or emerging from crisis situations, as well as sectors traditionally bypassed by investors and vulnerable population groups. Special attention is paid to the growth of small and mediumsized businesses.

18

I PROPARCO AT A GLANCE

SOCIAL BUSINESS

Since 2015, FISEA has had a social business compartment that should be seen as a continuation of the AFD’s work to promote microfinance and the Group’s first social business initiatives. By supporting highly committed private-sector organizations, the new compartment can contribute to the development of sustainable solutions to problems of social inclusion, accelerate the emergence of innovative projects and partnerships and help to scale up such initiatives by creating leverage and reducing the attendant risks.

Proparco offers technical assistance to its clients in addition to the funding it provides. These services aim to support the responsible practices and innovative initiatives of the private sector, and thereby strengthen the sustainability of Proparco’s investments and their impact on local development. Through these services, Proparco supports the financing of studies (feasibility studies, for example) and audits, as well as the implementation of its clients’ in-house projects, for which one or several consultants can be seconded.

Innovation

7

56

Enhanced capabilites

37

E&S and governance

This assistance is designed primarily to achieve the following: • enhance the capabilities of financial institutions and help them comply with E&S benchmark standards by training experts, promoting performance standards and assisting them with obtaining certification (ISO 14001, OHSAS 18001, etc.); • heighten clients’ ability to manage human resources, manage their finances, control risk, combat money-laundering and terrorism financing, and improve their management information systems; • strengthen governance at companies in which Proparco invests (functioning of decision-making bodies, financial transparency, etc.); • perform energy diagnostics to develop energy management solutions (energy efficiency/ renewable energies); • facilitate diversification through the launch of new products and services to address the needs of the most vulnerable (low-income groups, women, young people, etc.), as well as of micro-enterprises, small and medium-sized enterprises, cooperatives and small farmers.

Proparco can finance them by drawing on: • the technical assistance facility of the Investment and Support Fund for Businesses in Africa (FISEA), held by AFD and advised by Proparco, which is primarily intended to build the capabilities of small and medium-sized enterprises in Sub-Saharan Africa; • the Governance Capacity Building Facility (FRCG), which finances projects to improve environmental, social and governance (ESG) performance within 16 priority countries of the French Cooperation; • its own resources; • the geographic and thematic funding instruments put in place by the European Commission.

80 companies have benefited

directly or indirectly from Proparco’s technical assistance since 2014.

PROPARCO AT A GLANCE I

19

PARTNERSHIP

RISK MANAGEMENT

GREATER LEVERAGE THROUGH PARTNERSHIP

ONE OF THE MOST DEMANDING SETS OF CONTROL PROCEDURES

Proparco cooperates with a wide range of public and private sector organizations. Thanks to these partnerships, Proparco can take on larger-scale projects and mobilize greater financial resources.

For several years, Proparco has been scaling up partnerships with other development finance institutions (bilateral/multilateral and regional), its shareholders and private investors. That collaboration and coordination is key to Proparco’s effectiveness and one of the engines of its growth, leading to co-financed operations and the pooling of funds to bring about largescale projects.

More than €1bn mobilized every year with FMO and DEG since 2014.

20

I PROPARCO AT A GLANCE

REAPING THE BENEFITS OF EUROPEAN COOPERATION

The Association of European Development Finance Institutions (EDFI) is one of the more striking examples of cooperation between Proparco and its peers. Created in 1992, it encompasses 15 European bilateral institutions dedicated to financing the private sector in the Southern Hemisphere. This close relationship among European institutions has given rise to two cofinancing facilities: • European Financing Partners (EFP) dedicated to financing private-sector enterprises in Africa, the Caribbean and the Pacific regions (ACP) • The Interact Climate Change Facility (ICCF) dedicated to financing private-sector renewable energy and energy efficiency projects in developing and emerging economies.

PROPARCO, DEG, FMO: GREATER COOPERATION

Proparco maintains particularly strong ties to two EDFIs: Germany’s DEG and the Netherlands’ FMO. The three institutions have set up a joint financing

facility that enables them to pool their resources and put one of the three partners in charge of examining and monitoring specific projects. This coordinated approach facilitates their involvement with deals worth up to €90m.

AGREEMENTS WITH MULTILATERAL INSTITUTIONS AND PROPARCO SHAREHOLDERS

In October 2009, Proparco signed a cooperation agreement with the International Finance Corporation (IFC), the World Bank’s privatesector financing arm. It aims to facilitate project co-financing arrangements in key development sectors. Proparco has also entered into technical and financial cooperation agreements with other multilateral institutions such as the Development Bank of Southern Africa and the Asian Development Bank, as well as with a number of its own shareholders, for example, Corporación Andina de Fomento and the Aga Khan Fund for Economic Development.

Proparco incorporates risk management into every aspect of its operations. It implements a comprehensive risk management system to control credit and financial risks, environmental and social risks, and non-compliance risks. Proparco’s risk monitoring system is based on: • a set of operational limits for each region and each counterparty; • a prudent provisioning methodology; • quarterly portfolio reviews for investments that the Risk Committee has identified as sensitive At the same time, the Assets and Liabilities Management Committee is now responsible for monitoring financial risks (interest rate, exchange rate, liquidity) that could erode Proparco’s profitability or financial strength. Moreover, Proparco benefits from the financial robustness of its AA-rated main shareholder, the AFD. RISK ASSESSMENT DURING THE PROJECT LIFECYCLE

Risk assessment is performed both before and after a project financing decision is made: • independent opinions are gathered to analyze and assess both credit risks and legal, environmental, social and compliance risks;

• the governing bodies examine in detail and openly debate the various risk factors involved; • the project is monitored for as long as it is held in the portfolio, with its risk profile re-assessed and debated every six months.

ENVIRONMENTAL, SOCIAL AND GOVERNANCE RISK MANAGEMENT

At the identification stage, projects are categorized based on their E&S risk level, which in turn determines the scope of E&S due diligence and the benchmark standards to be applied. Proparco has also been developing a framework for assessing governance at client organizations in which it makes equity investments. Following such assessments, Proparco negotiates potential improvements with clients and spells out the corresponding commitments in contractual documents. Implementation is usually monitored every year.

FINANCIAL SECURITY POLICY

Proparco has developed a set of procedures and contractual provisions to fight corruption, fraud, anti-competitive practices, money laundering and terrorism financing. These measures, which align with the AFD Group’s financial security policy, are designed to prevent, detect, monitor and manage non-compliance risk related to Proparco’s activities and the regions where it operates.

PROPARCO AT A GLANCE I

21

PRIVATE SECTOR & DEVELOPMENT

TEAMS THE PUBLICATION Private Sector & Development (PS&D) is an original quarterly publication that provides analysis and insights into the mechanisms through which the private sector can contribute to the development of countries in the Southern Hemisphere. Each issue presents a variety of opinions and focuses expressed by authors from different backgrounds, working in research, the private sector, development institutions and civil society. Edited by Proparco, each issue includes 7 articles on a single theme. Through the diversity of the topics covered, e.g. housing, mobile telecommunications, financial markets, PS&D has gradually emerged as a benchmark publication on the role of the private sector in developing the Southern Hemisphere.

EXECUTIVE TEAM

OPERATIONS

GENERAL SECRETARIAT

Grégory CLEMENTE Chief Executive Officer [email protected]

Jérôme BERTRAND-HARDY Deputy Chief Investment Officer [email protected]

Jean-Baptiste SABATIÉ Deputy Secretary General [email protected]

Amaury MULLIEZ Deputy Chief Executive Officer in charge of Operations [email protected]

Julien LEFILLEUR Head of Manufacturing, Agribusiness and Services Division [email protected]

Catherine BAREYRE Chief Legal Officer [email protected]

Sophie LE ROY Head of the Banks and Financial Markets division [email protected]

Subscribe at www.proparco.fr

RISK DEPARTMENT

Emmanuelle MATZ Head of the Energy and Infrastructure Division [email protected]

THE BLOG

Thomas ELOY Head of Risk Department [email protected]

The Private Sector & Development blog was launched as an extension of the PS&D magazine to provide a broader forum for analyzing and discussing the role of the private sector in development. Private business people can make use of this interactive platform to broadcast their ideas and projects and to share their experience.

Karim Bourtel Anne-Gaël Chapuis Pauline Domachowski Design and production

Hélène TEMPLIER Deputy Chief Executive Officer in charge the General Secretariat [email protected]

Available for free in English and French, PS&D today has 45,000 subscribers.

Directors of publication

Anne-Sophie RAKOUTZ Head of the Private Equity Division [email protected]

Odile CONCHOU Head of the Environmental, Governance and Social Impacts Unit [email protected] Cécile COUPRIE Head of Finance and Administration Department [email protected] Yazid SAFIR Head of Portfolio Department [email protected]

Photo credit Pierre-Emmanuel Rastoin Joan Bardeletti Baptiste de Ville d’Avray Cobra Eduardo Muñoz pour l’AFD Benjamin Petit pour l’AFD Simone D. McCourtie / World Bank Arne Hoel / World Bank Asian Development Bank

Go to: http://blog.private-sector-and-development.com/ This report is eco-friendly and has been printed using vegetal and non-mineral inks.. 22

I PROPARCO AT A GLANCE

p. 5 p. 10, 13, 18 p. 11 p. 11 p. 12 p. 12 p. 13 p. 14 p. 21

HEADQUARTERS PARIS

151, rue Saint-Honoré - 75001 Paris Tel.: +33 1 53 44 31 08 - Fax: +33 1 53 44 38 38 mail: [email protected]

ASIA North and Southeast Asia

BANGKOK

Exchange Tower, Unit 3501-02, 35th floor 388 Sukhumvit Road, Klongtoey Bangkok 10110, Thaïland Tel.: +66 2 663 60 90 Fax: +66 2 663 60 77 [email protected] Mélody SANG

South Asia

NEW DELHI

19 A Rajdoot Marg, Chanakya Puri New Delhi - 11021, India Tel.: +91 11 42 79 37 00 Fax: +91 11 42 79 37 01 [email protected] Sébastien FLEURY

SUB-SAHARAN AFRICA

MEDITERRANEAN AND MIDDLE EAST

West Africa

North Africa

Boulevard François Mitterrand 01 BP 1814 Abidjan, Côte d’Ivoire Tel.: +225 22 40 70 40 Fax: +225 22 44 21 78 [email protected] Laurent FARGE

15, avenue Mers-Sultan 20130 Casablanca, Maroc Tel.: +212 522 29 53 97 Fax: +212 522 29 53 98 [email protected] Olivier LUC

ABIDJAN

Central Africa

DOUALA

96, rue Flatters Immeuble Flatters, 2e étage, Suite 201 BP 2283 Douala, Cameroun Tel.: +237 233 42 06 24 Fax: +237 233 42 06 25 [email protected] Thomas HUSSON

South Africa and Indian Ocean

JOHANNESBURG

Ballywoods Office Park, Ironwood House, 1st Floor 29 Ballyclare Drive, Bryanston P.O. Box 130067, Bryanston 2021 South Africa Tel.: +27 11 540 71 00 Fax: +27 11 540 71 17 [email protected] Denis SIREYJOL

Nigeria

LAGOS

C/o Consulate General of France 1, Oyinkan Abayomi Drive Ikoyi, Lagos, Nigeria Tel.: +234 816 387 8459 [email protected] Olivier FOLLIN

East Africa

NAIROBI

Top Plaza, 4th floor Kindaruma Road, Off Ngong Road P.O. BOX 45955 00100 Nairobi, Kenya Tel.: +254 20 271 12 34 Fax: +254 20 259 29 08 [email protected] Damien BRAUD

CASABLANCA

Middle East, Central Asia, Caucasus and Eastern and Southern Europe

ISTANBUL

Büyükdere Cad. Yapi Kredi Plaza C Blok, Levent, Istanbul Tel.: +902 122 833 111 Guillaume BARBEROUSSE

LATIN AMERICA AND THE CARIBBEAN Central America and the Caribbean

MEXICO CITY

Torre Omega, piso 5, Campos Eliseos n°345, Col. Chapultepec Polanco, 11560 México D.F., México Tel.: +52 55 5281 1777 [email protected] Paul CENTENO-LAPPAS

South America

SÃO PAULO

Edificio Çiragan Office Alameda Ministro Rocha de Azevedo, 38 11° andar, conjunto 1103 01410-000, São Paulo, SP, Brasil Tel.: +55 11 3149-7907 Fax: +55 11 3142-9884 [email protected] Benjamin GUERINI

151, rue Saint-Honoré — 75001 Paris Tel.: +33 1 53 44 31 08 — Fax: +33 1 53 44 38 38 www.proparco.fr