Support to food security in West Africa, support to agricultural organizations and health staff training in Afghanistan, energy efficiency in Thailand, forest ecosystem protection in Gabon, Agence Française de Développement commits a total of 213 million euros for developing and emerging countries

West Africa: food security by supporting agricultural organizations
AFD approved the allocation of a 3 million euro grant to the association Inter-réseaux Développement Rural to facilitate the involvement of agricultural organizations in the design and implementation of rural development policies in Sub-Saharan Africa.
Due to demographic and urban growth agricultural production on the African continent must be increased considerably and with low economic and ecological costs in order to ensure sustainable food stability. Rural economies and their key component, family farms, must go through important and rapid changes in order to meet these challenges. Farming cannot be developed without the implementation of support policies designed with farmers’ and rural organizations which are the main stakeholders. The project aims to facilitate the involvement of these organizations and increase and improve their influence in political decision-making on agricultural and rural development in West Africa.

Gabon: protecting forest ecosystems
AFD has accepted to implement a 50 million euro official development assistance debt conversion mechanism for the Gabonese Republic’s debts towards the French State.
The debt conversion will finance studies and projects for the sustainable development of forest ecosystems. Eligible projects could include defining and implementing a national strategy to avoid deforestation, managing national parks and developing ecotourism.

Afghanistan: developing horticultural cooperatives
AFD approved the allocation of a 6.4 million euro grant to the Islamic Republic of Afghanistan for the development of horticultural cooperatives around Kabul. The population of Kabul has risen from its pre-war level of 200 000 inhabitants to 4.5 million and should reach 6 million over the next ten years. Such enormous growth is due to the influx of refugees, rural exodus, the growing climate of insecurity in southern Afghanistan and the strong concentration of international organizations in the capital. The city’s development has meant its market has been continuously expanding but agricultural sectors do not benefit due to the way it is organized. The Afghan Government wants the agricultural cooperative movement to play a key role in the development of the sector.
AFD’s financing will support cooperatives in providing services to their members and in designing and implementing development plans. It will contribute to increasing production volumes and improving quality in regions around Kabul. It will also improve supply to the city, may increase exports and will thus contribute to reducing poverty.

Afghanistan: training health staff
AFD approved the allocation of a 2 million euro grant to the Aga Khan Foundation for the French Medical Institute for Children (FMIC) in Kabul. Over 3 000 children have received treatment or had operations in this hospital. Since it opened French specialist missions (surgeons, doctors, nurses, engineers…) have been continuously treating children and sharing their know-how with their Afghan colleagues.
The institute was built thanks to French financing with construction piloted by the NGO Afghan children. Management has been entrusted to two entities under the Aga Khan Foundation. The French NGO Chaîne de l’Espoir manages the institute’s medical activities.
Medical and paramedical staff will be trained thanks to the project.
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Burundi: budget support
AFD approved the allocation of a 2 million euro grant to the Republic of Burundi for its 2008 macroeconomic stabilization budget.
Ten years of conflict left Burundi impoverished with two thirds of its population living under the poverty line and GDP per capita and social indicators among the lowest in the world. A growth turnaround took place during the transition period but was insufficient and too unstable to have a real impact on poverty reduction. Public finances remain fragile despite relatively high tax and social security contribution rates (19.1% of the 2008 budget).
The priority action plan for 2007/2010 presented to donors showed considerable needs in terms of financing, both for investment and to balance the budget. France’s contribution is implemented by AFD and will be allocated to the education sector.

Thailand: energy efficiency in housing
AFD approved the allocation of a THB1.96 million loan (40 million euros) to the Government Housing Bank (GHB) to finance energy efficiency projects in housing.
Fossil energies make up 97% of Thailand’s energy consumption and its energy intensity, particularly carbon, is one of the highest in Asia. At the same time Thailand imports 60% of its energy and is affected by the surge in oil prices (its energy bill totalled 13% of GDP in 2006). Housing alone accounts for 14% of energy consumption and is, along with the transport sector, an area where energy can be saved.
The project aims to demonstrate to housing professionals and home buyers that a “High Energy Efficiency” process can lead to 30 to 40% savings with additional construction and equipment costs lower than 5% of standard costs. The loan will be allocated to GHB, Thailand’s leading home loan bank, which will reallocate it in the form of loans, mainly for first-time home buyers. 100% of the subsidy will be transferred to the final borrowers. Technical assistance financed by AFD and the French Global Environment Facility (FGEF) will be provided to GHB for project selection, financial packaging and training and communication on the process.

China: energy efficiency in the railway sector
AFD approved the allocation of an 80 million euro loan to the People’s Republic of China for the construction of an electrified railway line between Hengyang (Hunan) and Liuzhou (Guangxi) and for the implementation of an energy efficiency program in China’s railway sector.
The Ministry of Railways is one of the world’s largest consumers of fossil energy and accounts for around 10% of total hydrocarburant imports in China. The Ministry is to invest several billion euros annually in order to extend and electrify its network and meet a surge in transport needs. In terms of energy this policy is more efficient than road or air transport and is an example of China’s will to reduce the energy footprint of its economy in the context of the surge in the price of hydrocarburants.
AFD’s financing concerns the construction of a 500km-long double electrified track and an envelope for staff training in order to reduce energy consumption related to operating the line.

Turkey: financing municipalities
AFD approved the allocation of an 80 million euro loan to Denizbank to finance Turkish municipal investments.
The financial autonomy of Turkish municipalities remains limited and their access to borrowing is still strongly dependent upon public funds or mechanisms. Few commercial banks are willing to finance them as their margins are considered too low compared with the cost of investment required to train staff and monitor risk. AFD’s support will mainly finance infrastructure projects for secondary municipalities and will at the same time meet the requirements of metropolitan municipalities. It will be necessary for Denizbank to be selective and use this financing for priority sectors in order to upgrade to meet equipment standards and develop services for the urban environment (water, waste, roads, public transport sectors…). The use of this credit line should also provide an incentive for other Turkish commercial banks to operate in local sectors. This should gradually lead to the development of a municipal credit market in Turkey.

Agence Française de Développement (AFD), a public institution, has been combating poverty and promoting 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 which improve living conditions for populations, stimulate economic growth and protect the planet:
schooling for children, support to farmers, support to small enterprises, water supply, preserving tropical forests, combating climate change… In 2007 AFD pledged 3.5 billion euros to finance actions in South countries and Overseas France. Thanks to this financing 5.8 million children received schooling and 4 million people received water supply. Energy efficiency projects for the same year will reduce CO2 by 2.7 million tons annually.
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Guillaume de Saint-Phalle, desaintphalleg@afd.fr - Tél.: 33 (0)1.53.44.36.64 - Anne-Sophie Morizot (Hopscotch), asmorizot@hopscotch.fr – Tél.: 33 (0)1.58.65.00.88