2007-2008 Highlights
PROPARCO Groupe Agence Française de Développement
Investing in a sustainable future
Key figures 2007 In 2007 PROPARCO contributed to
•Supporting the growth of 315 companies •Creating or securing 47 000 jobs •Connecting 22.5 million people
A NORTH/SOUTH COMMUNITY OF INVESTORS WORKING FOR DEVELOPMENT
1
MEASURING DEVELOPMENT IMPACTS
6
GEOGRAPHICALLY TAILORED PRIORITIES
8
to telecommunications networks
•Generating 250
MW of renewable energy
•Saving 1.8 million tons of CO2 •Financing access to microfinance for
SUSTAINABLE DEVELOPMENT: SECTOR-WIDE MAINSTREAMING
100 000 people
•Increasing State revenues by €377 M
Commitments for the year €597.8 M
TAILORING AND EXTENDING OUR RANGE OF FINANCIAL PRODUCTS
10
12
including : €464.2 M
Loans – 29 operations Equity investments – 17 operations
€77.9 M
Guarantees – 4 opération
€55.7 M
Total risk Net income
€1.15
billion
€23.7 M
OPERATIONAL AND FINANCIAL RESULTS
14
A NORTH/SOUTH COMMUNITY OF INVESTORS WORKING FOR DEVELOPMENT
Investing in a sustainable future PROPARCO is a Development Finance Institution jointly held by Agence Française de Développement (AFD) and private shareholders from developed and developing countries. Its mission is to boost private investment in emerging and developing countries in favour of growth, sustainable development and reaching the Millennium Development Goals (MDGs). PROPARCO was created thirty years ago on the conviction that the private sector has a crucial role to play in development. Its capital was tripled in 2008. PROPARCO finances operations which are economically viable, socially equitable, environmentally sustainable and financially profitable.
Its sectoral strategy is tailored to the level of a country’s development and focuses on the productive sector, financial systems, infrastructure and equity investment. It invests in a geographical area ranging from major emerging countries to the less developed countries, in particular in Africa, and has high-level requirements in terms of Social and Environmental Responsibility. PROPARCO has a wide range of financial products to meet the specific needs of private investors in developing countries (loans, equity, guarantees and financial engineering). In 2007 PROPARCO granted €600M for over fifty projects in more than thirty countries.
[1]
PROPARCO’s Shareholders
[2]
A NORTH/SOUTH COMMUNITY OF INVESTORS WORKING FOR DEVELOPMENT
PROPARCO’s Board of Directors
PROPARCO’S SHAREHOLDING
Ethical funds and foundations €1.6M 0,4 %
French financial institutions €109.6M
26,1 % AFD €241.6M
57,5 % 12 % 4,4 % Investors €18.5M
[3]
International financial institutions €48.7M
Teams HEADQUARTERS TEAM Chairman: Jean-Michel SEVERINO Chief Executive Officer: Luc RIGOUZZO Deputy CEO in charge of Investments: Laurent DEMEY Bank and Financial Markets: Amélie JULY (november 2008) Private Equity: Marie-Hélène LOISON Infrastructure and Mining: Jérôme BERTRAND-HARDY Companies: Stéphanie LANFRANCHI Deputy CEO in charge of the General Secretariat: Philippe BASSERY Credit and Portfolio: Hélène TEMPLIER Finance and Administration Department: Marie SENNEQUIER Legal Department: Marianne SIVIGNON-LECOURT
PARIS SAINT PIERRE & MIQUELON
TURQUEY
TUNIS
LIBAN
TUNISIA
CASABLANCA
PALESTINIAN TERRITOTIES
JORDAN
MAROCCO
ALGERIA
SINAI
EGYPT
BAHAMAS CUBA REP. HAITI DOMINICAN
MAURITANIA
MALI
JAMAICA DOMINICA
GUADELOUPE MARTINIQUE BARBADE
CAP-VERDE GAMBIE GUINEA-BISSAU
TRINIDAD-AND-TOBAGO
GUINEA
TCHAD
YEMEN
BURKINA FASO CÔTE D'IVOIRE
SIERRA LEONE GUYANA SURINAME
NIGER
SENEGAL
LIBERIA
SUDAN
GHANA BENIN TOGO
DJIBOUTI
NIGERIA
LAGOS
CAMEROON
CENTRAL AFRICAN REPUBLIC
ETHIOPIA
SOMALIA
AMAPA
OUGANDA SAO TOME-AND-PRINCIPE
EQUAT. GUINEA GABON
DEM. REP. OF CONGO
CONGO
KENYA
RWANDA BURUNDI
BRAZIL
TANZANIA
ZAMBIA ANGOLA
R BOTSWANA
MOZAMBIQUE SWAZILAND
JOHANNESBURG LESOTHO
[4]
SEYCHE COMOROS MAYOTTE
MADAGASCAR
ZIMBABWE
NAMIBIA
SAO PAULO
NAIROBI
SOUTH AFRICA
A NORTH/SOUTH COMMUNITY OF INVESTORS WORKING FOR DEVELOPMENT
OUR NETWORK Bangkok (Cambodia, Indonesia, Lao PDR, Thailand and Vietnam) Antoine Vigier 14 F Abdulrahim Place 990 Rama IV Road, Silom, Bangkok 10500, Thailand Tel : +662 636 12 35 Fax : +662 636 12 47 afdbangkok@groupe-afd.org Beijing Paul de la Guérivière 7 Floor, Block C, East Lake Villas, 35 Dongzhimenwai Avenue, Dongcheng District, Beijing 100027 Tél : (8610) 84 51 12 00 Fax : (8610) 84 51 13 00 afdpekin@groupe-afd.org Sao Paulo (Brazil, Surinam) Christophe Blanchot Edificio Parque Cultural Paulista Avenida Paulista, 37-4° endar 01311-902 – Sao Paulo – Brasil Tel : + 55 11 22 46 27 91 Fax : + 55 11 22 46 27 99
New Delhi (Inde, Pakistan, Afghanistan) Jean-Pierre Barral 1A Jan Path - Delhi 11001 - India Tel + 91 11 23 79 37 47 Fax : + 91 11 23 79 37 38 Lagos (Nigeria, Benin, Economic and Monetary Community of Central Africa Countries) Charles-André Le Pape Melrose Office suites Phoenix House Plot 26E Abdulrahman Okene Close Off Ligali Ayorinde Street Victoria Island - Lagos - Nigeria Tel : + 234 12705740 Johannesburg (South Africa, Southern Africa) Sophie Le Roy Ballywoods Office Park 1st Floor Block I 29 Ballyclare Drive Bryanston 021 P.O. Box 786555 Sandton 2146 South Africa Tél (27 11) 540 7100 Fax (27 11) 540 7117 afdjohannesbourg@groupe-afd.org
Nairobi (East Africa) Ghislain de Valon Royal Ngao House Hospital Road P.O Box 45995 Nairobi, Kenya Tel : (254 20) 271 84 52 Fax : (254 20) 271 79 88 afdnairobi@groupe-afd.org Tunis Emmanuel Haye Immeuble Miniar - Bloc B 3rd et 4th floor Rue du Lac d'Ourmia 1053 Les Berges du Lac Tel : 71 861 799 Fax : 71 779 825 afdtunis@tn.groupe-afd.org Casablanca (January 2009) Amaury Mulliez 15, avenue Mers-Sultan Casablanca Tel: 212 22 29 53 97 Tel: 212 22 22 78 74 Fax : 212 22 29 53 98 afdprocasablanca@groupe-afd.org
BEIJING
CHINA
AFGHANISTAN
PAKISTAN
NEW DELHI
PROPARCO intervention aera
INDIA
PROPARCO offices
LAOS THAILAND
VIETNAM
N
BANGKOK
CAMBODIA
SRI LANKA
A SUMATRA
INDONESIA
ELLES WALLIS-ET-FUTUNA
VANUATU MAURITUS
REUNION NEW CALEDONIA FRENCH POLYNESIA
[5]
Systematic impact measurement Developmental and environmental impact measurement is crucial in monitoring the evolution of quality of each project. It also justifies investments and assesses their contribution to development.
PROPARCO has systematic impact measurement tools which are used to pre-select project financing and then throughout the project life.
[6]
M E A S U R I N G D E V E L O P M E N T I M PAC T S
Over the past three years PROPARCO has contributed to: ◆
creating or supporting 665 companies
◆
saving 5.7 million tons of CO2
◆
creating or securing 107 000 jobs
◆
◆
connecting 29 million people to telecommunications networks
financing access to microfinance for 100 000 people
◆
training 14 000 professionals
◆
increasing State revenues by 1 billion euros
◆
generating 1 450 MW of renewable energy
[7]
Confirming the African continent as a priority Between 2003 and 2007 average annual growth in Africa stood at around 6%. Such exceptional growth gives reason for optimism, yet it is not enough to reach poverty reduction targets. Supporting to African growth is more than ever before a priority to PROPARCO. PROPARCO has committed €330M on the continent, i.e. 60% of its allocations, with 45% in Sub-Saharan Africa.
PROPARCO’s activities focus on five sectors: ◆ financing companies and services, ◆ supporting financial intermediation, ◆ strengthening high-performance private infrastructure, ◆ preserving local and global environments, ◆ supporting the creation of local entrepreneur groups..
Equity needs on the rise in Mediterranean countries PROPARCO meets the financing needs of Mediterranean companies and provides an alternative to excessive debt. It also provides expert technical assistance, new partnerships and access to new markets and new technologies.
In 2007 PROPARCO committed €140M in Mediterranean countries.
Construction of a hydropower plant on the Nile in Uganda (USM72.8M loan)
Gas-fired power plant in Pakistan (USD 27M loan)
[8]
G E O G R A P H I C A L LY TA I L O R E D P R I O R I T I E S
Investment fund dedicated to renewable energies in India and China (€5M))
Enhancing energy efficiency in emerging countries Over the coming years, climate change, loss of biodiversity and major pandemics will be major challenges for the planet and a cornerstone for global public policy focusing on the major emerging economies (Brazil, China, India, Indonesia, Pakistan, Thailand).
In 2007, 70% of PROPARCO’s financial commitments in emerging countries were for clean energy development projects. Its strategy focuses on four sectors: energy, support to “model” socially or environmentally responsible (SER) companies or banks, ◆ financial intermediation on lines allocated to projects with high social or environmental impacts, ◆ investment funds dedicated to SER actions or renewable energy or energy efficiency projects. ◆ ◆
Development of a major equity investment player in the Maghreb (€12.5M of assets administrated)
[9]
Developing mobile phone networks in Ghana, Malawi, Uganda, Lao PDR (USD45.5M) and Chad (â‚Ź11M)
Creating high-performing infrastructure Effective infrastructure networks are essential for attracting foreign investors, building a local corporate fabric and providing essential services to populations.
In 2007 PROPARCO committed â‚Ź222M for basic infrastructure in 13 countries and ensured projects complied with environmental preservation.
Promoting and supporting efficient banking and financial systems Private companies in developing economies require long-term financing tailored to their needs. PROPARCO provides support to financial institutions and helps them tailor their products to corporate requirements.
It also promotes financial markets which direct local savings towards productive activities.
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SUS TAINABLE DEVELOPMENT: SECTOR - WIDE MAINS TREAMING
Participating in investment funds dedicated to corporate financing The Small and Medium-Sized Enterprises (SMEs) sector is key to the development of a sustainable and dynamic economic fabric. In view of the apparent reluctance of banks in developing countries to finance
this sector, PROPARCO provides an alternative to bank financing by acquiring stakes in local investment funds dedicated to financing corporates in expansion.
Supporting productive and service sectors PROPARCO provides long-term resources, which are often lacking on local banking markets, directly to companies in local or foreign currency. Its main business sectors include plantations and primary agribusinesses, livestock farming and seaproduct packaging, modernisation and expansion of heavy industries, transportation, education and health.
Extending a cement plant in Kirene, Senegal (â‚Ź20M loan)
[ 11 ]
Supporting banking intermediation in Nigeria (USD25M credit line)
PROPARCO is positioned on high-risk areas with considerable market flaws and must therefore be able to provide a range of financial products to meet three main types of needs expressed by private companies in developing countries: access to long-term financing, hedging or mitigation for certain risks, especially political, and solutions tailored to specific issues in developing countries.
Strengthening corporate equity PROPARCO contributes to the development of private companies or financial institutions by directly investing in their equity or via equity investments in
investment funds which are generally multi-country sectoral generalists in order to diversify risk.
[ 12 ]
TAILORING AND EXTENDING OUR RANGE OF FINANCIAL PRODUCTS
Providing loans tailored to each project PROPARCO has a wide range of medium and long-term loans (up to twenty years): senior loans, junior loans, ◆ mezzanine loans, ◆ subordinated loans ◆ ◆
Moreover, PROPARCO uses financial engineering tools tailored to the main characteristics of under-development (instability of raw material rates for instance).
Working in local currency and providing a wide range of risk- hedging tools Through its signature, PROPARCO provides a guarantee of solvency and therefore facilitates the mobilisation of ressource in local currencies by private sector borrowers. It guarantees subscribers the repayment in capital and interest of the relevant loans.
In 2007 PROPARCO also developed a range of direct loans in local currency.
Supporting Morocco’s leading microfinance institution (€12.5M subordinated loan guarantee)
[ 13 ]
The main features of 2007 include net income at €23.7M and a volume of commitments at €598M, an increase from FY 2006 of respectively 230% and 50%. The year also confirmed Africa as a priority for PROPARCO. 45% of commitments were made in Sub-Saharan Africa and 60% on the continent as a whole. PROPARCO also pursued its readjustment of allocations for infrastructure, equity and services to the poorest countries and strengthened its volume of activities on behalf of AFD.
Equity ◆
17 equity investments
◆
11 investments made and 4 disinvestments
Equity investments: sectoral breakdown (outstanding amounts) Infrastructure and mining
Financial sector
13 % ◆
◆
A portfolio equivalent to €135.2M in gross value, broken down into 79 units paid-up investments stood at €95.7M at year-end 2007
Companies
26 %
18 %
43 % Investment funds
Equity investments: geographical breakdown (outstanding amounts) Central and Southern Africa and Indian Ocean
Multi-country
15 %
30 %
26 % 13 % 5%
11 %
Overseas France
Asia
Mediterranean West Africa
[ 14 ]
OPERATIONAL RESULTS
Loans ◆
◆
◆
29 loans totalling €464.2M approved in 2007 Outstanding amounts made up of 162 loans granted to 50 clients
Loans: sectoral breakdown (outstanding amounts) Infrastructure and mining
Financial clients
35 % 49 % 16 %
Total outstanding amounts stood at €736.5M
Companies
Loans: geographical breakdown (outstanding amounts)
Asia and Caribbean
West Africa
22 %
20 %
14 % 31 %
Mediterranean
Guarantees ◆ ◆
4 guarantees totalling €55.7M were approved in 2007 Guarantees issued totalled €7.5M
[ 15 ]
13 %
Central and East Africa
Southern Africa and Indian Ocean
OPERATIONAL RESULTS
Simplified balance sheet in net values (â‚ŹM) ASSETS
LIABILITIES
Loans to financial institutions
425
Borrowings
Loans to companies
302
Unpaid capital Other Provisions
723 39 8 19
Equity investments
130
Equity
198
Short and long-term investments
127
- incl. capital subscribed
143
- dincl. reserves and retained earnings
31,3
- incl. income
23,7
TOTAL
987
Other
TOTAL
3
987
Main income statement items (Mâ‚Ź) Net banking income
34,7
Gross operating income
21,2
Cost of risk
1,8
Operating income
21
Net income
23,7
[ 16 ]
ANNUAL REPORT 2007
ISSN requested Copyright deposit July 2008 Coordinated and drafted by: Benoît Verdeaux and Thibaut Roggeband Designed and published by: MH Éditions - www.mh-editions.fr Photo credits: PROPARCO, Groupe AFD, Michel Hasson, GettyImages, ©IRD Cover photo: Michel Dukhan ©IRD This brochure respects the environment and was printed using vegetal ink on FSC certified paper (sustainable forest management)
PROPARCO 5, rue Roland Barthes 75598 Paris Cedex 12 TĂŠl. +33 1 53 44 37 37 - Fax +33 1 53 44 38 38 www.proparco.fr