Combating climate change in Indonesia, social housing and Black Economic Empowerment in South Africa, health and infrastructure in West Africa, rural credits in Vietnam.

Indonesia: combating climate change

AFD approved the allocation of a 200 million USD loan to the Republic of Indonesia to support its program to combat climate change.
Indonesia, with a population of 230 million inhabitants, has become the world’s third largest greenhouse gas (GHG) emitter after the United States and China. This mainly stems from deforestation whereas its forest ecosystems constitute a major global challenge in terms of biodiversity preservation. The Indonesian Government has made firm pledges on these issues and has designed a plan aiming to integrate climate constraints into its national development policies. AFD, along with the World Bank and Japanese cooperation, has decided to encourage this initiative within the framework of a budget support program.

The 2008 to 2010 program aims to encourage the public policy changes that are required in order to help combat climate change. Each of the three annual commitments is conditional upon public policy decisions or physical implementations to combat climate change. Three groups of indicators will be monitored and reviewed by the government and donors: (i) greenhouse gas emission mitigation (forests, energy and industry), (ii) climate change adaptation (water and agriculture) and (iii) cross-cutting activities (land use planning, development of the Clean Development Mechanism…).
This program will reduce the country’s greenhouse gas emissions, will help preserve social peace thanks to a more effective anticipation of climate impacts and will enhance natural resource management. It will also send out positive signals for international negotiations that aim to achieve constructive and shared efforts from parties with different statuses at the climate Convention. The target of this program, i.e. to protect global public goods, is core to AFD’s mandate in emerging countries. This operation will give clout to the credibility of France’s climate commitments in international negotiations.

Republic of South Africa: social housing

AFD approved the allocation of a line of credit totaling around 225 million rand (20 million euros) to the National Housing Finance Corporation (NHFC) to finance social rental housing.
NHFC, a development financial institution founded in 1996 and held by the South-African State, helps implement the government’s social housing policy. The project will contribute to the development of the rental housing stock via projects in urban areas that promote social mix and are near employment and transport hubs. 2 800 dwellings will be built, urban mobility demand will be reduced, urban spread will be contained, the energy budget for operations will be optimized and urban quality will be restored in city centers.

South Africa: financing farms for disadvantaged populations

AFD approved the allocation of a 40 million euro loan to Nedbank Ltd to finance SMEs and Black Economic Empowerment (BEE) eligible farms.
Since the abolition of apartheid South Africa has engaged upon a sweeping transformation process. In order to reduce inequalities public authorities have implemented a BEE policy, wealth redistribution measures and measures to promote “Historically Disadvantaged Populations” (black, mixed-race and Indian populations that did not have the right to vote until 1994).
AFD’s financing will help populations in this sector set up in business, will improve banking sector market penetration and will enhance the effectiveness of financing for businesses involved in the process to reduce inequalities. Nedbank will subcontract training and support operations for beneficiaries and studies to private operators. Partnerships with universities, administrations, NGOs and microfinance institutions will also be encouraged in order to promote project cofinancing and develop innovative financing mechanisms.

Burkina Faso: support for the health sector and the fight against AIDS

AFD approved the allocation of a 2.5 million euro grant to Burkina Faso to support the Ministry of Health’s actions, particularly for the fight against AIDS.
The spread of HIV/AIDS in Burkina Faso appears to have stabilized in 2006 with a prevalence rate of around 2% (12 000 deaths attributed to AIDS and 150 000 HIV infections, including 80 000 women. AFD has been helping the country combat AIDS since 2005 by financing assistance provided by three technical experts.
The aim in continuing this support is to improve the way Burkina Faso’s health system operates, to give populations better access to healthcare and to ensure an effective transfer of skills to State executives.

Senegal: electricity sector reform

AFD approved the allocation of 38.8 million euros of financing for the electricity sector reform.
Senegal’s energy sector has been experiencing serious problems since 2006 which have led to widespread power cuts, high prices and a financial crisis for companies in the sector. AFD’s financing supports the sector reform plan designed by the government and will help improve the financial situation of SENELEC, create conditions for its sustainability (price regulation, industrial restructuration of the national company, review of sector regulation methods…) and meet Senegal’s strong electricity demand.

Vietnam: rural credit networks

AFD approved the allocation of 30.5 million euros of financing (30 million euro loan and 0.5 million euro grant) to the Socialist Republic of Vietnam to support the development of people’s credit in rural areas.
The People’s Credit Funds (PCFs) mutual network has been developing since 1993 in order to provide entrepreneurs in Vietnam’s rural areas with banking services. Its activity does however remain focused on collecting deposits and short-term loans. It currently has almost 1 000 agencies established in practically all of Vietnam’s provinces and reaches some 1.2 million beneficiaries.
The project will support the growth of PCF activities, the extension of their range of long-term investment loans and will build the network’s capacities.

Agence Française de Développement (AFD), a public institution, has been working to combat poverty and promote the development of South countries within the framework of France’s official development assistance for over 60 years. AFD is active in the field in over 70 countries and Overseas France and finances and supports projects to improve living conditions for populations, boost economic growth and protect the planet: education for children, support for farmers, support for small businesses, water supply, tropical forest preservation, fight against climate change… In 2007 AFD pledged 3.5 billion euros to finance operations in South countries and Overseas France. Thanks to this financing 5.8 million children received schooling and 4 million people gained access to drinking water. Energy efficiency projects for the same year saved 2.7 million tons of CO2 annually. www.afd.fr

AFD press relations

Laure Weisgerber, weisgerberl@afd.fr - Tel.: 33 (0)1.53.44.30.57
Anne-Sophie Morizot (Hopscotch), asmorizot@hopscotch.fr – Tel.: 33 (0)1.58.65.00.88