Presentation Session 1: Benoit Mauduit ISMED Annual Conference, Defining a Way Forward for Infrastructure Investment in the Middle-East and North Africa (MENA) 4 December 2014 - Paris, France

1. Fostering investment in infrastructure
in the MENA region
ISMED Conference 4 December 2014

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Who we are

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…en intégrant les dimensions
économiques, sociales et
environnementales du
développement et leurs
interactions …
Volume of authorised
commitments :
€ 7.8 Bn in 2013
Strategic orientations
set by AFD’s
reference ministries
… in charge of implementing the French
official development cooperation policy …
… while taking into account the
economic, social and
environmental dimensions of
development and their
interactions …

4. A development agency with a whole range of
financial tools
Sovereign loans Loans to or guaranteed by States whose debt is sustainable
Non-sovereign loans
Loans to public enterprises, municipalities and other public entities without State
guarantee
Subsidised loans
Loans comprising an interest rate subsidy, long term repayment (15 to 30 years),
with a grace period
Loans at market
conditions
Non-subsidised loans, however long or very long term with a grace period
Grants and debt
conversions
At least 2/3 of the grants are reserved for low-income countries, mainly SSA
Guarantees Foster lending from local banks to SMEs e.g. Ariz, MENA Facility
NGO Support to NGO projects (co-financing)

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Our priorities
 Employment and vocational training have been put among the top
priorities since the « Arab springs », but infrastructure still is a priority
 Most of the MENA countries are dependant on imports in terms of
Energy => need to support diversification of their energy mix / action
also on the demand side (energy efficiency)
 Growing urbanisation => Urban transport and urban development
=> wastewater treatment
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AFD commitments in the MENA Region1.1
(in million Euros)

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Coordination initiatives
in the MENA region

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The Mutual Reliance Initiative (MRI)
 An agreement signed in February 2010 between KfW, EIB and AFD, based on
common operational guidelines
 Derives from the idea to build on our similarities
 Co-financing is the rule in the case of infrastructure (projects are generally too big for
one institution alone)
 Lenders have similar project cycles
 As finance institutions, we have similar constraints in terms of risk assessment and risk
management
 Concerns several infrastructure projects (energy, transportation) in the MENA
region
 Much still depends on the willingness of the project teams to collaborate
 Having a frame to refer to helps a lot to solve problems
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The Neighbourhood Investment Facility
(NIF)
 Promotes coordination among European finance institutions and with a donor,
the EC = blending
 KfW, EIB, EBRD and AFD are the most active FIs
 Blending loans and grants adds value to the projects.
 More impact can be reached through ad hoc measures such as TA to the implementing
entity or investment grant to finance specific components
 Increases the visibility of European assistance as a whole : projects supported by the
NIF must involve at least two FIs
 The Technical Assessment Meeting (former FIG) is at the heart of the
coordination
 A common pipeline
 Technical discussions on the relevance and modalities of each project
 In 2013, 69% of AFD authorised commitments are in co-financing and 82% of
these are part of a European package supported by the NIF
 It is still a heavy process and allocation rules are not always clear
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Need for further coordination ?
 Involve more of the actors present in the region
 Eg Spanish, Italian, UK cooperations
 Role of joint programming to increase cooperation among European donors
 Role of trust funds (now European Trust funds) in post-conflict situations, provided
 Agencies can be active at management committee level
 Implementation can occur through different ways including delegated cooperation to
agencies (in particular for reconstruction / rehabilitation projects)
 Coordination with Arab donors
 Need to coordinate with the private sector
 Maintain a dialogue with companies involved in the priority sectors
 …While sticking to our rules transparent procurement procedures)
 Other kinds of coordination or cooperation (eg with interventions at the
institutional level) to be experienced on a pilot project basis
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11. Thank you for your attention
Benoît Mauduit
+33 1 53 44 31 02
mauduitb@afd.fr