#BusinessInCommon
SUSTAINABLE DEVELOPMENT REPORT ANALYSIS OF THE RESULTS AND IMPACTS OF PROJECTS FINANCED IN 2019
Business in Common For over 40 years, Proparco has been serving the private sector and sustainable development. As a subsidiary of Agence Française de DÊveloppement, Proparco invests to support private and financial actors mobilized to contribute to the economic, environmental and social development of developing and emerging countries. We provide funding to businesses and financial institutions whose activity helps create jobs and decent incomes, supply essential goods and services and fight climate change. In this way, our actions aim to strengthen the contribution of private actors to achieving the Sustainable Development Goals.
CONTENTS
Sustainable Development Report Editorial
2
Strategy and ambitions
4
Main results in 2019
22
The expected impacts of financed projects . . . . . . . . . . . . . . . . . . . . . . . 22 Our impact on the transformation of actors. . . . . . . . . . . . . . . . . . . . . . 35
Our operating methods
8
Our impact on mobilizing financing flows and on unlocking investment in countries. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Impact monitoring of projects signed in 2015 and 2016
Measuring and analyzing project impacts . . . . . . . . . . . . . . . . . . . . . . . . . 8 Taking environmental, social and governance risks into account and assisting our clients . . . . . . . . . . . . . . . . . . . . . . . 12 Engaging clients toward more positive impacts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Concessional financing to scale up our clients’ impact and support their risk-taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
48
BUILDING TOMORROW’S RESILIENT SOLUTIONS G r é g o r y C l e m e n t e, Chief Executive Officer of Proparco
Supporting a responsible and committed private sector to assist with sustainable transitions in developing countries is at the heart of Proparco’s mandate. Our mission is strengthened today by a global health and economic crisis which exposes our societies’ weaknesses even more. In the context of these challenges, private investment in developing countries is one of the ways to find tomorrow’s resilient solutions and foster a sustainable rebound. Proparco is guided by this vision of supporting these
Our aim is to support responsible and committed private stakeholders toward positive and sustainable transformations in the countries where we operate.
countries toward more sustainable and equitable models, equal to the ambitions of the 2030 Sustainable Development Agenda and the Paris Climate Agreement.
These results confirm the relevance of Proparco’s 2017-2020 strategy. In the period, the range of financial instruments
2019 was a turning point for Proparco. The results achieved
also broadened with new blended tools, specially tailored to
allow it to play a key role among European development
the financial and extra-financial needs of clients working
financial institutions and to actively take part in the
in fragile contexts. Building on this and with the goal of
creation of good practices and in fostering the emergence
strengthening our development impact, Proparco has
of actors proposing high-impact solutions. Thanks to the
adjusted its strategic and operational road map for 2022,
trust our clients and partners have in us, we have exceeded
consistent with Agence Française de Développement’s
our objectives and increased our impact on the ground:
strategic orientation plan (SOP) (see pages 4 to 7).
2.5 billion euros of financing commitments in 2019, including 1,285 million euros in Africa; 1.62 million jobs created and/or maintained worldwide by 2024;
In 2020, we will pursue this focus while remaining flexible and responsive to the needs of our clients and prospects. Our imperative remains intact in each project we finance:
7 17 million euros in climate commitments and 3.05
to propose adapted and sustainable solutions to our clients
million tons of CO2 equivalent avoided yearly thanks to
which support ecological and social transitions, the
projects signed in 2019;
improvement of people’s living conditions and countries’
11.8 million people with improved access to an essential
economic development. It is this commitment as well as
good or service within five years, of whom 70% inhabit
the trust of our clients and partners which drive us to
low and lower middle income countries.
stride toward the future with ambition and optimism.
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Strategy and ambitions Over the years, the private sector has taken on a decisive role in countries’ development trajectories. It is now a key element in official development assistance. In line with the orientations of AFD Group, Proparco has given itself new impetus with its 20202022 strategic road map.
“With adequate, predictable, sustainable fun-
of life, the environment and societal life have
ding, everything is possible,” declared António
become more apparent in recent years through
Guterres, Secretary General of the United
corporate social responsibility (CSR) approaches,
Nations, at the opening of the General Assembly’s
which are increasingly in favor among profes-
High-Level Dialogue on development financing
sionals, regulators and clients. With the SDGs,
in September 2019. Significant progress has been
the Paris Agreement on climate change and
made in recent years in several key domains of
the major international negotiations on trade,
development, but the answers brought forth
prosperity and biodiversity, a universal tran-
to reach the Sustainable Development Goals
sition of our methods of production and modes
(SDGs) remain insufficient. From now to 2030,
of consumption toward more sustainable and
the international community
equitable models has set in.
is summoned to react fast and
The private sector, a key actor in the transition
ambitiously.
Momentum toward universal transformation Private and corporate investments were first considered for their benefits to economic growth and jobs, but their impact on the quality
+€2.5 bn
in commitments authorized by Proparco in 2019
The private sector is a major driver behind those transformations. As an investor, it can influence the majority of investment dynamics. As a direct actor in the quality of life and in social well-being through
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employment, it also acts, more and more, as a manager of public services and an actor in the
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Sustainable transitions, at the heart of Proparco’s mandate
territorial fabric and in public policy. Lastly, it is a producer of quality and innovative goods and
Through its support for the private sector,
services, able to stimulate ecological, social and
Proparco’s mission is to promote transitions
economic transitions.
toward inclusive and carbon-free models of sustainable and balanced growth, in developing
This new challenge requires a complete renewal
and emerging countries. Through its experience,
of international aid. From now on, its task must
network and new resources, Proparco confirms
be not only to close the gap with the poorest
its role as a dedicated and strategic entity of AFD
among us, but also to stimulate, reorient and
Group to deploy and implement the group’s
regulate investment, especially private, to better
SDG and Paris Agreement ambitions. Today, it
support these transitions.
has reached a critical size, allowing it to be a motor among European Development Finance
WHY A NEW STRATEGIC ROAD MAP?
1
Transfer of private sector activity
100% Paris Agreement • Reaffirmation of climate priority
2 3
New growth trajectory
AFD SOP: new perspectives for 2022
Factors justifying an update of Proparco’s strategy
100% social links
• Sharp turn toward financial inclusion
3D Approach
Partnership reflex
• Pro-active action in fragile areas
• Objective: double the amounts mobilized from the private sector
• Implementation of a new gender indicator • Renewed ambition in health and education
Purposely design of Proparco’s 2020-2022 strategy within the overall orientation of AFD’s SOP
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A new road map for 2020-2022
Institutions (EDFI) and beyond, actively participating in the creation of good practices and the emergence of new actors who can provide
Proparco finished 2019 with convincing results:
high-impact solutions.
it surpassed its strategic, operational and impact goals set in its 2017-2020 strategy. It is now in
Fulfilling Proparco’s mandate is now closely tied
the lead group of DFIs in its areas of operation.
to that of participating in sustainable transitions.
Thanks to these strong results and bearing
At stake is favoring and orienting financing and
market evolutions in mind, Proparco has given
investment flows so that they contribute more
itself new impetus with its 2020-2022 road map,
significantly to the SDGs and to countries’ needs
in line with AFD Group’s strategic orientation
for transition, beyond the financial commitments
plan (SOP), whose trajectory is based on five
of development finance institutions (DFIs).
structuring commitments and a new positioning: to become the bilateral platform of French development policy. With this new road map, Proparco is pursuing three objectives supported by operational priorities.
N E W S T R AT E G Y: F O C U S O N 2022
Strengthen the private sector’s contribution to reaching the SDGs Our strengths: A successful, balanced economic model with more than €2.5 bn in financial commitments reached in 2019 A strengthened international network A multi-sectoral and geographic expertise
Guide our clients toward more sustainable impacts
Double the impacts on development in terms of access to jobs and to essential services The climate issue at the heart of our mandate A much more heightened ambition in terms of gender equity Priority on financial inclusion and microenterprises/SMEs financing
Together, invent tomorrow’s actors and markets
Double the mobilization of private financing Foster the emergence of new private actors Become more involved in fragile areas, with a priority on Africa
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T H R E E A M B I T I O U S S T R AT E G I C O B J E C T I V E S OBJECTIVE 2
OBJECTIVE 3
DOUBLE THE DIRECT IMPACTS ON SUSTAINABLE DEVELOPMENT
DOUBLE THE MOBILIZATION OF PRIVATE FINANCE
FOSTER THE EMERGENCE OF TOMORROW’S PROJECTS AND ACTORS
Proparco is pursuing the ambition of its
Proparco aims to catalyze private actors
Beyond the objective of mobilization,
2017-2020 strategy: it aims to double its
by doubling the amounts mobilized
Proparco seeks to foster the emergence
impacts on employment and on improved
from the private sector for sustainable
of projects and actors in high-impact
access to essential goods or services in the
development investments (SDIs).
sectors.
OBJECTIVE
1
2020-2022 period relative to 2016-2018. To do so, it will seek to: consolidate its actions in the highest impact sectors;
This objective is part of AFD Group’s
This objective is in line with the main
ambition to become the French platform
aspect of Proparco’s mission: to support
of development policy, positioning itself
the emergence of projects and actors
as the entry point for providers of deve-
that contribute to sustainable econo-
lopment solutions. It will be achieved
mic development in their countries or
through two complementary actions:
regions. Thus, Proparco will strengthen
and maximize project impact, thanks
its positioning on the structuring of
to increased mobilization of conces-
rolling out a wide range of highly
financial markets, the financing of
sional resources and to strengthened
catalytic instruments such as equity
venture capital and the emergence of
support for clients in order to promote
investment and guarantees;
new sectors (off-grid energy, agribu-
adoption of best CSR practices on the
siness, etc.).
one hand, and to support their capacity
redirecting investment and financing
to innovate and implement transitions
flows toward projects which contribute
This ambition will rely on deliberate
on the other.
the most to sustainable transitions.
action in fragile areas where 80% of poverty will be found by 2030 and where
Proparco will rely on operational
This ambition will rely on the develop-
strategies which:
ment of asset management. Proparco was approved as an investment company in
favor green investments, thereby
2019 and plans to develop a strategy of
reinforcing its commitments to climate
asset management internally, to parti-
while directing market financing flows
cipate more directly in the reorientation
toward low-carbon investments;
of private capital toward the financing of the SDGs and transitions.
and stress financial inclusion and the financing of microenterprises/SMEs, the main actors in economic growth in Proparco’s areas of operation.
the private sector is often fragile.
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Our operating methods To provide greater support to private stakeholders toward more sustainable and inclusive development, Proparco is strengthening its own evaluation and impact measurement practices and is developing ever more effective support tools.
Measuring and analyzing project impacts As a development financial institution and for the purpose of accountability, Proparco eva-
An impact measurement integrated into the project cycle
luates and reports on the impact of its action through an approach which measures the results
Proparco’s framework for measuring results and
and impacts of its action. For this, Proparco
impacts is integrated into the different stages
has been constantly developing, adapting and
of the project cycle in order to help determine
strengthening its tools and procedures since
the results and impacts of Proparco’s financing,
2006, in line with international practices and
notably with regard to the three main strategic
its strategy.
objectives (see page 7).
The measuring of results and impacts aims to:
The expected impacts of each project are assessed
assist financing decisions by assessing, during
with regard to quantitative and qualitative
project examination, the expected impacts on
indicators obtained via project studies and dis-
sustainable development;
cussions with clients. The indicators, gathered
strengthen the impact of projects by identifying the drivers making it possible;
in a data base, produce an aggregated score which in theory allows the impacts of projects
act in helping to develop Proparco’s strategies;
to be compared with each other. The ex ante
improve knowledge and capitalize on know-how.
analysis of impacts, carried out by the Impact
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OUR KEY IMPACT INDICATORS
Number of direct and indirect jobs created/ maintained
Number of tons of CO2 equivalent avoided
Number of people who in theory will have improved access to an essential good or service
Measurement unit in conjunction with the project
accounted for in projects supported. Analysis is
team, is presented from the broader perspective
carried out systematically to identify potential
of project’s contribution to the SDGs.
inconsistencies between direct financing and investment by Proparco (excluding interme-
In 2019, the methods associated with the cal-
diation) and the Paris Agreement.
culation of the indicators related to the number of direct and indirect jobs created/maintained
To measure the real impact of funded projects,
and to the improved access to essential goods or
identify the most effective ways to support
services were refined, with a view to harmo-
impact objectives and respond to the growing
nizing practices across financial institutions.
challenges of accountability, Proparco also collects key indicators at the impact measurement
Regarding climate issues, the “100% Paris
monitoring stage. Furthermore, it carries out
Agreement” dimension was fully integrated
ex post evaluation studies of projects or cluster
into the project examination phase to ensure
projects for capitalization purposes.
that climate and sustainability issues are better
Amounts mobilized from the private sector for SDIs
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2020: strengthened international coordination for impact measurement
In 2019, Proparco carried out an impact evaluation of projects signed in 2015 and 2016, which had been in our portfolio for two or three years (see pages 48 to 52).
Proparco, which was very active in 2019 among EDFIs on the subject of the accounting of direct
Our good practices in impact management recognized
and indirect jobs as well as on climate, will pursue this work in 2020 in collaboration with the IFC, the African Development Bank (AfDB)
In April 2019, Proparco signed the Operating
and other special partners.
Principles for Impact Management (OPIM), a series of good practices whose development
Since May 2019, the EDFI secretariat has started
was overseen by the International Finance
working groups in order to harmonize member
Corporation (IFC) with the aim of granting
approaches to assessing the value of clients’
the investment impact sector the transparency
effects on employment, climate, the reduction
and the credibility which it needs. The nine
of gender inequality and the mobilization of
principles encourage investors to put impact
private finance. The Joint Impact Model (JIM)
management at the center of their activity,
is the result of efforts by FMO, CDC, BIO and
from the investment strategy design stage
Proparco, in collaboration with the AfDB and
to the management of the project’s exit. The
FinDev Canada, to model the impact effects
consulting firm EY verified that Proparco’s
of projects financed in our operation areas, in
impact management framework was in line
terms of indirect jobs and added value. Among
with the OPIMs in 2020.
other things, this modeling takes into account the trickle-down effect in economies.
IMPACT MEASUREMENT IN PROPARCO’S PROJECT CYCLE from identification to ex post evaluation
1 IDENTIFICATION
2 EXAMINATION
3 DECISION
4 MONITORING
5 EVALUATION
Pre-identification of impacts
Analysis of the contribution to impact objectives and to sustainable development
Presentation of the analysis of results to the project committee and the investment advisory committee
Annual reporting on the main results indicators
Ex post study of project results and impacts
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1 Define strategic impact objectives consistent with the
Strategic Intent
investment strategy.
2 Manage strategic impact and financial returns at portfolio level.
3 Establish the investor’s contribution to the
OPERATING PRINCIPLES FOR IMPACT MANAGEMENT ©
Origination & Structuring
achievement of impact.
4 Assess the expected impact of each investment, based on a systematic approach.
5 Assess, address, monitor and manage the potential
Portfolio Management
risks of negative effects of each investment.
6 Monitor the progress of each investment in achieving impact against expectations and respond appropriately.
Impact at Exit
A constantly improving impact measuring tool
7 Consider sustainability of impact when finalizing project exit. 8 Review, document and improve decisions and processes based on the achievement of impact and lessons learned.
Strengthen support prior to project examination To improve the prospective knowledge of impacts
In 2020, Proparco will work on strength-
by sector and by type of operation, notably in
ening the implementation of certain principles
bordering countries and in fragile areas where
following the 2019 signing of the Operating
it wishes to take action proactively, Proparco
Principles for Impact Management, for example
wants to draft sectoral analysis frameworks
in terms of impact monitoring, in a spirit of
and tools for project teams.
transparency and dialogue. This requires to improve data collection from clients over the life
Improve the tools and process
of projects in order to track their contributions
of evaluation and analysis
to the SDGs as well as their financial performance more closely. Beyond the strengthening
A certain number of rating tools have been
of monitoring of impacts achieved in projects,
developed by AFD and its counterpart DFIs to
Proparco is pursuing the improvement of its
support their strategies. Proparco is examining
tool measuring results and impacts in line with
them in order to align its own tools with them,
two objectives:
with the goal of harmonization.
9
Independent verification
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Taking environmental, social and governance risks into account and assisting our clients Development operations have risks by nature with
tenure, the guidelines relative to companies and
regard to the environment and to people. Proparco’s
to human rights as well as the resources of the
approach aims to master environmental and social
Corporate Governance Development Framework.
(E&S) risks as well as governance (G) risks. The goal?
This approach consists of evaluating the envi-
To avoid, mitigate or offset the negative impacts of
ronmental and social risks and impacts of each
projects financed.
project presented to Proparco’s decision-making
Our ESG approach
bodies. Based on internal or external expertise, we then propose to the financial beneficiaries’ actions to implement in order to manage these
Our approach, similar to that of AFD and to best
risks and to improve their environmental and
practices of international financial institutions, is
social practices. During the operation phase, we
based on the performance standards of the IFC, the
monitor the implementation of these actions and
norms of the International Labour Organization
we ensure that the project properly manages any
(ILO), the guidelines of the United Nations Food
risks and unforeseen negative environmental and/
and Agriculture Organization (FAO) on land
or social contigencies. Finally, if necessary, we can provide specific in-depth support for the client to strengthen their capacities in the management and implementation of their environmental, social
Environmental and social issues in projects financed by Proparco
and governance performances.
ESG: added value for every project
These are all subjects concerning or possibly having an impact on the
Common sense says that a project/client which
environment and people. Based on IFC performance norms, E&S issues
masters the full set of its ESG risks according to the
include the following main themes:
best standards is a financially more viable project/
A ssessment and management of E&S risks and impacts;
client. And this has now been proven by crosscutting
L abor force and working conditions;
studies on the consequences of applying the best
R ational use of resources and prevention of pollution;
environmental, social and governance practices in
H ealth, security and safety of communities;
enterprises. Beyond better risk management, the
A cquisition of land and involuntary resettling;
project creates additional value. This added value
Conservation of biodiversity and sustainable management of living
appears in the form of coherence in decisions,
natural resources;
access to new markets via certifications, greater
I ndigenous peoples;
attractiveness thanks to securing new financing,
C ultural heritage.
better productivity and competitiveness, and finally, a contribution to the improvement of
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Corporate governance in projects financed by Proparco Corporate governance refers to all the relations between the management of a company, its Board of Directors, its shareholders and the other stakeholders. It is also the framework in which the company’s objectives are set, the means to achieve them are determined and performance is monitored. Its evaluation is based on the analysis of five main components: The structure and operation of the Board of Directors; The control environment and procedures; The transparency and dissemination of information; Shareholders’ rights, conflicts of interest and related party transactions; The company’s commitment to good governance.
people’s living conditions and to protection of
team is involved in the appraisal and monitoring
the environment. By maximizing the integration
phases of all projects financed, according to
of ESG dimensions into the life of the enterprise/
the issues (risks and support) determined in a
project, the project/client becomes more resilient
standardized and shared approach.
when facing environmental and/or social crises in the coming years.
Monitoring ESG performance throughout the project life
Proparco is preparing specific tools adapted to sectors, types of enterprises and contexts with the IFC and other development finance institutions, notably EDFIs. These harmonized tools allow for better ownership of the standards of
Respecting best practices over the long term requires monitoring the implementation of ESG recommendations. Such monitoring is subject to indicator calculations, regularly produced and managed by Proparco teams. This way, it
reference by all.
The ESG risk management tools (screening, evaluation, monitoring, support)
makes it possible to identify trends in ESG performance and levels of residual risk for the life
Proparco has several tools at its disposal for client
of each project. In some cases, depending on the
assessment and support. Iterative research is
indicators and the relationship with the client,
carried out on the E&S situation, focusing on the
it can be decided to give specific support to the
activities of the project/client. This contextual
project. This support, whether E&S and/or G, is specific to each project, depends on each client, and may include technical assistance. In early 2020, Proparco strengthened its ESG division with a 16-person team focused on the proper implementation of ESG approaches. The
Proparco has several tools for client assessment and support.
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With Proparco’s support, the NEOEN company is carrying out a photovoltaic project of 200 MW at an altitude of 4,000 meters in Argentina (see page 15).
BIOSIDUS: good governance and gender promotion In 2018, Proparco invested in the capital of the company Biosidus, alongside FMO and the ACON IV fund. This Argentine family company develops, produces and distributes so-called biosimilar medicine, which is based on living matter, in thirty emerging and developing countries. On the basis of a detailed assessment of Biosidus carried out by Proparco and FMO experts, a governance action plan was formalized in 2019, with a focus on gender promotion at the level of the company’s board of directors. This plan has brought the governance of Biosidus closer to international standards, notably concerning its general assemblies, its board of directors and the appointment of independent administrators.
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research is based on external data bases as well as
To assess the company’s governance practices
Proparco’s local knowledge. The E&S assessment
and propose improvements, Proparco mainly
of project/client activities may be carried out
uses:
in the form of questionnaires and interviews
Rapid Risk Screening (a pre-analysis rating
or by subcontracting thorough due diligence studies. After financing and agreement on an E&S action plan for the project/client to carry
tool); t he progression matrix (a measure of the maturity of governance);
out, internal and/or external reporting is set
ad hoc questionnaires;
up between Proparco and the beneficiary of
a results matrix (a tool for rating diligence
the financing to monitor the evolution of E&S performance.
results);
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NEOEN: developing solar energy at high altitude In 2019, Proparco granted a 50-million-
a nd model documents targeting enterprises
dollar (USD) loan to
(company regulations for a board of directors,
the French company
for example).
NEOEN to carry out the photovoltaic project
A guide to good practices for entrepreneurs, among
Altiplano – La Puna
others, has also been written.
(200 MW) located 4,000 meters high in Argentina. In the
PROPARCO’S ESG RISK MANAGEMENT TOOLS Total project portfolio, sorted by their E&S ranking
Proparco supports the developer and builder
Projects signed in 2019, sorted by their E&S ranking
9%
IF-C
scope of this financing,
in the management of E&S issues, notably
16%
in improving the
IF-C
17%
practices of supervising
A
subcontractors or in
15% 28% IF-B
A
541 projects
38% 18%
IF-B
conditions, water
12% B+
IF-A
8% B
14%
management plans for road traffic, working
76 projects
B+
20%
determining detailed
5% B
IF-A
Note: Of the 593 portfolio projects in the information system on 31 January 2020, 52 projects are unranked (projects entered before 2012). The portfolio considered here thus consists of 541 projects.
resources and waste management.
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Samia Ragued, head of partnership management at Enda Tamweel “Proparco has contributed to the development of our activity by financing loans, through equity investment (€ 8 million contribution), and also by financing technical support in the scope of a Gender program.”
Engaging clients toward more positive impacts Along with its financing operations (debt,
more globally by Proparco experts as part of
guarantee or equity stake), Proparco offers its
their relations with these clients. This assistance
clients capacity-building services in order to
proves essential for enterprises which:
strenghten their expertise and know-how and
develop less common products or are at a very
to develop their practices. Thus, they adapt to
recent stage of development (venture capital/
a more and more competitive local and inter-
digital or start-up);
national environment and take on or deepen a
offer high social impact products or services
responsible approach from both a social and an environmental perspective.
A strengthened technical assistance offer
(social or inclusive enterprises); o perate in countries where the assistance ecosystem is particularly weak (priority poor countries or fragile countries). The Proparco TA offer is classified by sector and by type of actor. It acts as a catalyst to make
Technical assistance (TA) projects consist of
clients more competitive, responsible, green
providing external expertise to Proparco clients
and inclusive, and thus generate more positive
and are complementary to the support proposed
impacts.
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PROPARCO’S SUPPORT TO CLIENTS THROUGHOUT THE PROJECT LIFECYCLE Mobilization of expertise to design the project Governance - Identification of strengths and weaknesses
Advice/coordination - Advice to client
Support from Proparco experts
- Design of action plan - Capacity building
Proparco network Financing/Investment Divisions
External competence and expertise
Financing/Investment - Financial and sectoral expertise - Coordination of all Proparco’s internal expertise
nderstanding of need based U on partner’s nature and their stage of development
Environmental and social - Identification of project’s E&S risks
esearch and proposal of solutions R adapted to partner’s needs
- Coordination of required specialized external expertise - Design of an action plan
Project identification
Cofinancing of feasibility studies to better define market needs and adapted tools, prior to project
Due diligence
Mobilization of expertise in project’s execution phase
Formalization
- Participation in governing bodies - Coordination of internal expertise Governance - Support for setup of governance action plan Environmental and Social - Support for setup of E&S action plan
Implementation
Potential mobilization of technical assistance to accelerate positive impacts of client activities Support for the development of client strategies and practices Assistance for their commitment to innovation
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APPRAISAL CYCLE OF TECHNICAL ASSISTANCE PROJECTS
IDENTIFICATION
APPRAISAL
DECISION
MONITORING
Determining client’s need during appraisal or monitoring of financial operations
Clarification of the content of the technical assistance and of the most appropriate expertise to meet the need
Approval of the content of technical assistance and of the maximum amount covered by Proparco
Support in recruiting service provider, monitoring the quality of the service and of the impact the technical assistance has in the company
Propulse will provide greater visibility for Proparco’s technical assistance offer. Technical assistance: multifaceted support Technical assistance is either provided directly to Proparco clients or it is delegated to investment funds which Proparco finances. The assistance mechanism may take the form of: consultancy services; i mplementation of internal projects carried out by one or more experts;
Propulse: a brand dedicated to Proparco’s technical assistance offer
t raining (thematic workshops, university degree program, external training, etc.);
In 2019, after a decade of providing assistance, and
exchange visits between companies and practitioners;
following its capitalization exercise carried out in
studies (feasibility, market, products and diversification, audits,
2018, Proparco worked on promoting the technical
etc.);
assistance offer available to clients. This offer is
seminars and crosscutting events.
taking shape in the form of the dedicated brand
Often cofinanced by the beneficiary enterprise, these activities
“Propulse”, which will be launched in 2020.By
may be financed from Proparco’s operating budget or from French
showcasing its results and impacts, Propulse will
State resources or those of the European Union. Proparco has been
bring greater visibility to Proparco’s technical
accredited to mobilize European funds since 2015.
assistance offer.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
19
ENDA TAMWEEL: assisting a microfinance institute with its gender approach in Tunisia Since 2016, Proparco has been supporting the Enda Tamweel microfinance institute in the improvement of its gender approach. This assistance aims to develop a strategy on gender and to adapt the institutional offering of financial and non-financial services. Furthermore, it focuses on capacity building for its personnel, notably in its network, to contribute to defending women’s economic and social rights, thanks to the implementation of good practices and specific tools.
Enda Tamweel proposes academic support programs for children. Enda is a pioneer of microfinance in Tunisia. For 30 years, it has been showing that microcredit is a powerful tool for poverty reduction and economic development. Boosting female entrepreneurship is also at the heart of its mission.
20
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Concessional financing to scale up our clients’ impact and support their risk-taking To accelerate transitions, private sector and
institution, manager of international mandates)
investors’ access to concessional resources
and technical capacities (fiduciary, control,
is increasingly integrated into international
human and logistical) as well as its global,
donors’ strategies, and their resources devoted
thematic and geographical know-how.
to these activities are growing. For some years, Proparco has been mobilizing this opportunity: it has been using concessional resources
Proparco, partner of the Green Climate Fund
blended with market instruments. The goal is to diversify and adapt its instruments to
Furthermore, Proparco has been accredited since
project and company needs and risk levels that
2016 to mobilize funding from the GCF. Approved
it wishes to finance and support in the search
by Proparco’s board of directors on October 5,
for additional and transformational impacts.
2018, the partnership with the GCF was signed
Provided that they are well used and in com-
in the form of a Framework Agreement in April
pliance with the principles stated in the AFD
2019. This partnership is a strategic opportu-
Group positioning notes, concessional financing
nity for Proparco: it reinforces its capacity to
opens real opportunities of additionality in
support the private sector in its low-carbon
certain operations.
transition. Access to the GCF moreover opens
The management of four delegated funds, a sign of recognition for Proparco
possibilities for Proparco to manage grants or to become a manager of subsidized loans or capital investments with a risk profile. These tools are complementary and make it possible to round out the attractiveness of Proparco’s own
With the “7 pillars” accreditation, Proparco has been able to manage delegated European Commission funds since 2015. Today it manages 4 delegated funds, directly or in partnership
financing thanks to the mixing of resources.
Stronger links with its partners
with AFD and the EDFIs, in the form of facilities which can be used for several financial
In order to deepen the partnerships with these
operations. The accreditation received from
entities, in 2016 Proparco allocated specific
the European Commission is recognition of
resources to its TA unit, which—tasked with a new
Proparco’s work. It testifies to Proparco’s
role—became the “TA and Resource Blending”
capacities for appraisal, implementation and
unit. This new arrangement has facilitated the
effective management of EC financing for a wide
mobilization of funds via capitalization and
range of operations, instruments, risk-sharing
feedback on experience, and it has enabled better
and amounts. It also highlights the relevance
compliance with the stringent accountability
of its many institutional capacities (banking
demands imposed by these delegators.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
A regulated mobilization of concessional resources
21
Between 2020 and 2022, as part of its new strategy, Proparco is targeting an increase in its capacity to mobilize concessional resources.
Since 2019, Proparco has also been able to
These will be prioritized for:
mobilize French government funds: it uses
Reorientation of investment flows and
grants and subsidized interest rates to provide
financing toward the sectors, products and
differentiated financing to projects generating
services that are part of economic, social,
additional positive impacts. The operations
environmental, territorial and digital
using these concessional resources follow the
transitions. These flows will be backed up
usual appraisal and decision process of other
with bonuses and subsidies to reward the
financial operations, with a specific analysis
additional effort and impact carried out.
produced to justify their use for private actors.
S upport for our clients in the form of
The mobilization of these resources is regulated
technical assistance and support funds, to
by the positioning note on the use of conces-
assist with:
sionality approved by the AFD Group board of
- their evolution toward better social and
directors at the end of 2018. This positioning
environmental responsibility practices;
note complies with international principles and
- and their capacities to innovate, imple-
best practices in terms of resource blending
ment and support transitions.
as expressed by the OECD and the DFI and
Fostering the actors and solutions of tomor-
MDB Working Group on Blended Concessional
row (venture capital, social economy, etc.),
Finance.
particularly in fragile countries, where access to concessional resources would be more helpful for taking on the risk or innovative character of their operations.
PRINCIPLES OF THE PROPER USE OF CONCESSIONALITY GROUP
OECD-DAC has blended finance principles for unlocking commercial finance for the sustainable development goals
DFI enhanced principles for blended concessional finance in private sector projects
DATE OF CREATION
2017
2013 (principles) then 2017 (enhanced principles)
DEFINITION OF BLENDING
“Blended finance is the strategic use of development finance for the mobilization of additional finance towards the sustainable development goals (SDG) in developing countries”
“Combining concessional finance from donors or third parties alongside DFIs’ normal own-account finance and/or commercial finance from other investors, to develop private sector markets, address the SDGs, and mobilise private resources”
PRINCIPLES
Serve development Increase the mobilization of private finance Be adapted to the local context Strengthen transparency and impacts S trengthen partnerships between private actors and development actors
Additionality Minimum concessionality Business sustainability Markets strengthening High standards
22
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Main results in 2019 In 2019, Proparco demonstrated its ability to ensure an ambitious growth trajectory of its activities, with more than 2.5 billion euros in financial commitments, 1.7 billion euros in projects signed and increasing impacts on sustainable development.
The expected impacts of financed projects The impact of each project is evaluated on the basis
To improve our estimations, the calculation methods
of an ex ante analysis of its impacts using three
for indicators related to employment and impro-
key indicators: jobs created and/or maintained,
ved access to essential goods and services were
greenhouse gas emissions avoided and people’s
refined. The numbers presented in this chapter
improved access to essential goods and services. In
were estimated ex ante in compliance with these
2019, 72 projects were evaluated ex ante for impacts.
new methods.
PROJECTS ANALYZED EX ANTE RECORDED IN 2019
35
financial institutions
12
infrastructure projects
13
investment funds
12
corporate projects
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
23
IMPACTS EXPECTED FROM PROJECTS FINANCED BY PROPARCO IN 2017, 2018 AND 2019 Ex ante analysis based on new methods of calculating indicators (see pages 8 to 11)
JOBS directly and indirectly created and/or maintained 427,000 1,314,000 1,618,000
TONS of CO2 equivalent avoided
2017
2017
1,600,000
2018
2018
2019
2019
1,529,000 3,050,000
PEOPLE who will theoretically have improved access to an essential good or service 2017 2018 2019
3,503,000 14,655,000 11,778,000
24
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Objective: jobs and gender equality
TA RGETED IMPACT Number of direct and indirect jobs created and/or maintained
Ensuring the creation of quality jobs and access to
As these results sometimes depend on a few particu-
decent work for the entire working-age population
lar projects, an analysis excluding atypical projects
is a major challenge. Proparco stresses its role with
was therefore conducted. It shows, in terms of
regard to employment dynamics.
jobs, steady growth in line with the 2020 objective.
The evolution of results expected from projects
The results were estimated using new calculation
signed by Proparco in 2015, 2017, 2018 and 2019
methods of the number of direct and indirect jobs
in terms of direct and indirect jobs supported
created and/or maintained. To enable a relevant
is presented below, using both former and new
comparison, 2017 and 2018 results were updated
calculation methodologies (see pages 8 to 11).
using the new calculation methodology.
PROJECTS SIGNED IN 2015
PROJECTS SIGNED IN 2017
PROJECTS SIGNED IN 2018
PROJECTS SIGNED IN 2019*
Former method New method
1,619,000
1,405,000 896,000
1,618,000
OBJECTIVE IN 2020
1,700,000 1,588,000
1,314,000
560,000
* In 2019, one project contributed to 25% of total direct and indirect jobs created and/or maintained.
427,000
EVOLUTION OF EXPECTED RESULTS EXCLUDING ATYPICAL PROJECTS New method Atypical projects 2017 2018 2019 2020 Objective
396,000
+ 31,000 978,000 1,209,000
+ 336,000 + 410,000 1,588,000
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
25
In Bhagalpur, Rekha, 36 years old, benefited from a loan with Sonata in order to create a grocery shop. Proparco has been supporting Sonata since 2016 in its mission to provide poor women with microfinance services transparently, rapidly and effectively.
1. Support the creation and maintenance of direct and indirect jobs 41,700 direct jobs of which 10,000 created within five years by our clients in 2019 1,577,000 indirect jobs created and/or maintained in five years
Our actions in 2019 will enable the creation or
clients, which are included in the indicators. In
maintenance of more than 1,600,000 jobs among
this context, financial institutions accounted for
our clients within five years. This figure is up by
43% of indirect jobs in 2019, the total number of
23% compared to last year.
indirect jobs supported representing 38 times the number of direct jobs supported, a ratio far
More than two-thirds of direct jobs created and/
greater than that of 2018 (11). The ratio of the MAS
or maintained among our clients came from com-
sector, going from 5 in 2018 to 16 in 2019, is the
panies in the manufacturing, agribusiness and
main contributor to this rise. Indeed, companies
services sector (MAS), led by a few large agro-food
in the MAS sector contribute to 95% of total direct
companies. This year, a large share comes from the
jobs in 2018 and 71% in 2019, and to 47% of total
ETG group, an African agricultural products mer-
indirect jobs in 2018 and 30% in 2019. The ratio of
chant, and from Tereos Açùcar e Energia Brasil SA,
the energy, digital and infrastructure sector (ENI)
a Brazilian trader of sugar, ethanol and bioenergy,
was also a factor in the global increase, rising from
with an expectation of 9,000 and 8,000 direct jobs
17 to 37, whereas the ratios of other sectors dropped
supported respectively within 5 years. “Indirect”
in 2019 relative to 2018, all while remaining high
jobs refer to the jobs supported among Proparco’s
(359 for investment funds in 2019). The evolution
conterparties’ suppliers, sub-contractors and
of the ratio in the MAS sector is explained by the
26
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
stable number of indirect jobs supported in 2019
carried out in low income or lower middle income
relative to 2018, whereas the number of direct
countries: a growing number compared to the
jobs supported fell, declining from 86,000 in 2018
37% of 2018.
to 30,000 in 2019. This decline is explained by the fact that the SIFCA company, a West African
Proparco’s 2019 investments should moreover
agro-industrial actor, alone contributed half of
open the way for the creation of more than 385,000
direct jobs in 2018.
direct and indirect jobs by our counterparties and their value chain within five years, which would
Consistent with the positioning of Proparco, 53%
be 52% more than in 2018 (253,000 direct and
of direct and indirect jobs come from projects
indirect jobs).
2. Supporting equality and women’s economic empowerment Women will represent more than 50% of employees among 29% of our clients within 5 years 8,300 direct jobs created or maintained occupied by women within 5 years
Women’s employment is a key issue world-
That is why Proparco is participating in the
wide and even more so in Africa. Despite being
strengthening of women’s financial inclusion
dynamic and powerful economic agents, women
and access to job opportunities, as well as in
face numerous barriers to job access and to
the development of female entrepreneurship.
conditions equal to that which men enjoy.
Promoting decent work In the absence of a harmonized definition of decent work
from social protection for themselves and their families
across development finance institutions, Proparco assesses
that go beyond local legal requirements.
the quality of direct jobs created and/or maintained using
Non-discrimination policies are set up in 89% of banks
four social and working conditions criteria: the social
and in 75% of “corporate” projects and infrastructure
protection proposed to employees and their families, the
projects financed in 2019.
existence of a non-discrimination policy, the implemen-
P revention measures against infectious diseases are
tation of prevention measures against infectious diseases
implemented in 42% of “corporate” projects, in 33% of
(HIV, malaria, tuberculosis) and a pay level higher than the
infrastructure and in 26% of banks, in conjunction with
country’s legal minimum wage (or what is customary in the
the prevalence of diseases in the concerned countries.
area and activity sector concerned).
W ages are above market average in 63% of banks and
In 94% of financial institutions, 67% of MAS-sector comp-
50% of “corporate” projects and infrastructure projects
anies (“corporate” projects) and 33% of infrastructure
financed in 2019.
projects financed by Proparco in 2019, employees benefit
27
With the loan that Proparco granted in 2019 to the Imon International microfinance institution, around 23,000 additional people should be able to access quality microfinance products and services in Tajikistan.
In 2019, women account for the majority of
In 2019, the projects located in East Asia and
clients in microfinance institutions supported
the Pacific hired the most women, with 44%
by Proparco. Their financial inclusion is fostered
of direct jobs occupied by women. In those of
by the fact that a large majority of the supported
Sub-Saharan Africa, 32% of direct jobs were
institutions offer financial products or services
occupied by women. As for indirect jobs,
which are adapted to their needs.
three-quarters of jobs occupied by women are in the value chains of projects operating in low
In the investment funds supported by Proparco
income and lower middle income countries.
and their underlying assets, women account for 39% of direct and indirect jobs.
IMON INTERNATIONAL: responsible microfinance In 2019, Proparco renewed its support for IMON INTERNATIONAL, a major responsible microfinance actor in Tajikistan. The project was initially launched in 1999 by the National Association of Business Women of Tajikistan with the support of the NGO Mercy Corps. In 2019, IMON INTERNATIONAL served over 110,000 clients, 40% of whom are women who benefit from relevant products and services. Its leadership is majority female. In addition, women represent 38% of the 1,500 employees. For these reasons, this operation is eligible for the 2X Challenge initiative (see pages 28-29). Thanks to this loan of around 6 million dollars in local currency, the IMF will be able to develop its credit portfolio: about 23,000 additional people will gain access to microfinance products and services.
28
FOCUS
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
2X Challenge: mobilizing funds for gender equality entrepreneurs, employees and investors, from the angle of affirmative action. This initiative
At the G7 summit in Canada in 2018, Proparco and five other development finance institutions (DFIs) committed to the 2X Challenge initiative. The objective: invite the DFIs to mobilize funds and to unlock resources for gender equality.
aims to mobilize 3 billion dollars by 2020 for projects reducing gender equality. A year and a half after its launch, 2.47 billion dollars have already been committed and mobilized for gender equality. In 2019, six new DFIs became members, and a multilateral development bank supported the initiative. Proparco’s total contribution to 2X projects reached 504 million dollars at the end of 2019.
Common criteria for gender equality projects The 2X Challenge seeks to improve women’s access to leadership positions, quality jobs,
Criteria to identify investments which benefit
sources of financing for their company as well
women were also adopted in 2019. They contribute
as various goods and services. Participation in
to establishing a common language for DFIs and
the 2X Challenge is greater in some sectors, such
specialized organizations in determining indic-
as financial services. There is still much to do for
ators to qualify gender projects. This increasingly
the inclusion of women in companies or sectors
acknowledged framework of very specific criteria
where they are traditionally under-represented,
is useful in developing financing devoted to gender
such as renewable energies.
equality and in determining strategies.
3 billion dollars for gender equality
Invest2Impact, supporting women entrepreneurs on the ground
The approach of financiers participating in the
Since 2019, Proparco has been participating
initiative is now two-fold. It consists on the one
in the Invest2Impact initiative, which is a
hand of taking into account gender inequalities
business plan competition designed specifi-
in the projects they finance and to minimize the
cally for women-owned SMEs and which aims
risks of maintaining or strengthening them.
to identify and support the development of
Additionally, it makes conscious efforts to
high-potential, women-owned SMEs in certain
increase the share of financing favoring women
Sub-Saharan African countries. Supported
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
by FinDev Canada, Proparco, OPIC, CDC and
In October 2019, the program selected, from
Mastercard, this initiative falls squarely within
among 800 candidacies, 100 companies belon-
the 2X Challenge initiative.
ging to women in East Africa (Kenya, Uganda, Tanzania, Rwanda and Ethiopia), where the first
Invest2Impact targets women-owned businesses
phase of the program is taking place. This selection
at the growth stage. It provides them with deve-
was confirmed at the Global Gender Summit in
lopment support for their strategy and investment
Kigali the following month with the awarding
as well as post-financing mentoring. It also serves
of prizes. The continuation of this program, also
to rally and mobilize a wide range of impactful
supported by Proparco, will consist of assisting
investors and development financiers involved in
these 100 companies in capacity building to meet
Africa, beyond DFIs, to give participating SMEs
the main challenges which women entrepreneurs
increased visibility and greater financing options.
face. Proparco mobilized 150,000 dollars for the structuring of the initiative. Recently, it approved a grant of an additional 500,000 dollars to finance support activities.
CAPITAL BANK: encouraging women’s entrepreneurship in Panama
Strategy 2020-2022: new ambitions for equality
29
The categories of 2X eligibility criteria women’s entrepreneurship women’s leadership women’s employment offer of goods and services designed to benefit women specifically criteria devoted to clients or assets for intermediated financing
In line with the AFD Group’s strategic orientation plan, Proparco’s new strategy for 2020-2022 confirms the implementation of a new gender
Proparco, at the end of 2019, approved a
indicator corresponding to the 2X Challenge
Read the Private Sector
20-million-dollar loan to Capital Bank to
criteria. Its main objectives are to:
& Development issue
support growth in its SME portfolio and to
Support the growth of Proparco’s financial
on gender inequality: :
encourage women’s entrepreneurship in
commitments to reach 25% of yearly signa-
English: bit.ly/SPD-VA
Panama. 30% of the credit line will be dedicated
tures labeled “gender”.
French: bit.ly/SPD-VF
to SME financing managed or held by women
Increase the visibility of Proparco’s activities
according to the 2X Challenge criteria. The
on the subject both internally and externally.
bank has committed to financing transactions
A nd thus develop our partnerships and
which respond to at least one of the four criteria
influence.
concerning entrepreneurship, leadership, employment or consumption. As a complement
2019 was the opportunity to reflect upon the
to the loan, Proparco will deploy a technical
importance of the private sector in the reduction
assistance program in order to create financial
of gender inequalities through producing the
and non-financial products aimed at promoting
magazine SP&D.
access to company financing where women play a predominant role.
30
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Objective: fight against climate change TA RGETED IMPACT
Number of tons of CO2 equivalent avoided
PROJECTS SIGNED IN 2015
PROJECTS SIGNED IN 2017
PROJECTS SIGNED IN 2018
OBJECTIVE IN 2020
5,000,000 3,050,000 1,650,000
1,600,000
1,529,000
Proparco puts the promotion of low carbon
SCALING SOLAR: two new solar power stations in Senegal
PROJECTS SIGNED IN 2019
of co-benefits):
growth at the heart of its strategy: in 2019, the
• one fund devoted to financing companies
number of projects with climate co-benefits
active in the fields of energy efficiency,
signed increased by 20% over 2018. On average,
clean energy and optimization of natural
more than 3 million tons of CO2 equivalent will
resources, mainly in India;
be avoided each year over the life of the 19 “cli-
• and one Africa investment fund in the
mate” projects signed by Proparco, representing
fields of renewable energies and energy
434 million euros of co-benefits:
efficiency.
Eleven renewable energy infrastructure proIn Senegal, as part
jects in Senegal, Nigeria, Guinea, Argentina,
In terms of authorizations, 32 projects with
of the Scaling Solar
Guatemala, Mexico, Brazil, India, Nepal and
climate co-benefits were approved in 2019
initiative, Proparco
Ukraine (252 million euros of co-benefits).
(23 mitigation and/or adaptation projects in
participated in the
Four dedicated or partially dedicated climate
infrastructure, energy efficiency, construc-
financing of two
lines in financial institutions in Nigeria, Ecuador,
tion and agriculture, 2 investment funds and
solar power stations
Paraguay and Turkey (121 million euros of
7 dedicated lines) for 717 million euros, which
in Kahone and
co-benefits).
increased compared to 2018 (536 million euros).
Touba. These power
Two “corporate” projects in the field of renewable
stations produce the
energy and biomass production, notably in
equivalent of the
Brazil (38 million euros of co-benefits).
annual consumption
Two investment fund projects (22 million euros
of 595,000 people theoretically and make it possible to avoid 86,800 tCO2-eq per year on average for 25 years.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
31
In Senegal, two solar power plants were financed with Proparco’s support. 86,800 tCO2-eq per year on average can thus be avoided for 25 years.
Supporting adaptation and mitigation strategies Proparco’s 2019 investments will annually avoid the emission of 3.05 million tCO2 equivalent (+99% relative to 2018) A renewable energy installed power capacity of 1 ,896 MW (886 MW in 2018) once the projects are operational
The projects with climate co-benefits financed
power capacity of 1,896 MW (886 MW in 2018)
by Proparco are expected to avoid the emission
and an expected annual energy production of
of nearly 3.05 million tons of CO2 equiva-
6,971 GWh, versus 3,870 GWh in 2018.
lent on average each year during the life of the projects. To calculate this estimation,
In 2019, Proparco also approved three climate
Proparco uses the AFD Group procedure
change adaptation projects:
and tools, the latter being aligned with the
In Egypt, Proparco granted an 18-million-euro
international standards used by the majority
loan to the T&C Garments SAE company, a
of international financial institutions in the
jeans production factory, with the objective
transport, renewable energy and energy
of recycling 90% of its waste water.
efficiency sectors.
In Zimbabwe, Proparco granted a 25-million-euro loan to Seed Co Ltd, the leading
The climate change mitigation projects are
African seed supplier, in order to develop
essentially renewable energy efficiency pro-
hybrid seeds that are more resistant to climate
jects. Proparco supports the energy transition
vagaries and to limit harvest losses through the
while also improving access to businesses and
use of corn driers.
local populations. The 11 renewable energy
In Kenya, the Kenya Nut Company was granted
infrastructure projects signed by Proparco in
a 17-million-dollar loan, 4 million of which is
2019 involve solar, hydroelectric and wind power
for setting up a drip irrigation system which
installations. They account for a future installed
will help save water.
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Objective: improved access to essential goods and services
TA RGETED IMPACT Number of people who theoretically will have improved access to an essential good or service
By supporting projects which improve people’s
2017, 2018 and 2019 in terms of improved access
access to essential goods and services, Proparco
to an essential good or service is presented
works toward the reduction of inequalities in
below based on both former and new calculation
emerging and developing countries. The projects
methods (see pages 8 to 11). Since these results
signed in 2019 are being deployed in the health,
sometimes depend on a few particular projects,
education, energy infrastructure and financial
an analysis excluding atypical projects was
inclusion sectors. The evolution of expected
therefore conducted. It shows steady growth in
results of projects signed by Proparco in 2015,
access, in line with the 2020 objective.
PROJECTS SIGNED IN 2015
PROJECTS SIGNED IN 2017
PROJECTS SIGNED IN 2018*
22,638,000
PROJECTS SIGNED IN 2019**
OBJECTIVE IN 2020
22,370,000
Former method New method
12,000,000 14,655,000 5,156,000
4,100,000
3,503,000
11,800,000
5,780,000
* One project in 2018 contributed to 68% of results. ** One project in 2019 contributed to 40% of results, and a second project 20% of results.
EVOLUTION OF EXPECTED RESULTS EXCLUDING ATYPICAL PROJECTS
New method
Atypical projects 2017 2018 2019 2020 Objective
1,303,000 + 2,200,000 + 10,000,000
4,655,000 + 6,909,000
4,870,000 5,780,000
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
In 2019, 24 projects were signed in order to
According to the impact calculation methods
improve people’s access to essential goods and
revised in 2019, these projects should ensure
services. The beneficiaries include:Â
improved access to 11.8 million people within five
Two blood testing services for 666,000
years, of whom 70% of the beneficiaries are in low
additional consultations by 2024: analysis
income and lower middle income countries. The
laboratories in the MENA region and one
total number of beneficiaries of improved access
company whose activities are related to the
to an essential good or service for projects signed
collection of blood, serological exams and
in 2019 is 20% lower than in 2018 because the
blood transfusion in Brazil.
China Water operation in the field of water and
One producer of generic pharmaceutical
sanitation contributed very significantly to results.
products targeting patients in Ivory Coast,
Thanks to projects signed in 2019, 8.5 million
Ethiopia, Cameroon, Burkina Faso, Botswana
people should be able to benefit from improved
and Namibia.
access to electricity within five years, which is
Twelve energy infrastructure projects in Nigeria,
four times more than for projects signed in 2018.
Ivory Coast, Senegal, Mozambique, Kenya,
This year, three-quarters of the contribution
Ukraine, India, Nepal, Argentina and Guatemala.
comes from two projects:
Seven microfinance institutions in Cambodia,
The construction of a hydroelectric power
Myanmar, Tajikistan, Pakistan, Georgia and
station by the Nepal Water and Energy
Haiti, and one multi-country fund (Accion
Development Company.
Venture Lab), to support the emergence
And the extension of a thermal power station
of fintech firms that will help structure
in Ivory Coast.
the development of financial inclusion for individuals.
As for financial inclusion, we estimate that
One education project in Sub-Saharan Africa
230,000 people should benefit from a micro-
(Zambia, Uganda, Kenya, Mozambique,
loan from a microfinance institution thanks to
Senegal and Mali) benefiting around 21,000
projects supported by Proparco in 2019, versus
students in the next five years.
95,000 for projects signed in 2018.
RENSOURCE HOLDINGS: affordable off-grid energy In 2019, Proparco signed an agreement to acquire 3 million dollars in equity stake in the Rensource Holdings company, an innovative actor proposing the production of off-grid solar energy in Nigeria. By 2024, 250,000 SMEs and merchants should be connected to more affordable, reliable and clean electricity via more than 100 new mini networks installed at markets. In terms of climate, the project falls entirely within the 100% Paris Agreement mandate with an expected effect of 30,000 tCO2-eq avoided per year compared to pre-existing diesel generators.
33
34
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
In addition to microfinance institutions,
via cellphone. With this agreement, the number
Proparco signed an equity-stake agreement in
of beneficiaries of a financial inclusion service
2018 with JUMO World Limited, a South African
reached 1,470,000, with the fintech firm alone
fintech firm which proposes real-time financial
contributing to 1,343,000 beneficiaries.
products to unbanked people, mainly nano-loans
BENEFICIARIES OF IMPROVED ACCESS TO AN ESSENTIAL GOOD OR SERVICE IN 2017, 2018 AND 2019 Expected number of beneficiaries, in thousands Health 2017 2018 2019
Education
2,200 680 1,160
2,020
Energy
Financial inclusion
Ex ante analysis based on indicator calculation methods revised in 2019 (see pages 8 to 11)
Water and sanitation
620 1 ,470
2,990 20
10,000 8,540
230
AFRICURE: local medicine production in Africa Painkillers... treatments against malaria, gastro-intestinal illnesses, diabetes... antiretrovirals and vaccines‌ The 10-million-dollar loan granted to the Africure Pharmaceuticals company will enable the development of two new generic medicine production units in Ivory Coast and Ethiopia. Il will also help increase current production capacities in Cameroon, Burkina Faso, Botswana and Namibia. Thanks to this project, more than 2 million additional patients will have access to generic medicine in Cameroon, Ethiopia and Ivory Coast. Proparco backed up this loan with a technical assistance project aiming at supporting the company in its efforts to comply with the World Health Organization’s principles of good manufacturing and distribution practices.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Our impact on the transformation of actors 120 clients have benefited from environmental, social and/or governance support (ESG) from Proparco since 2017 (38 out of 51 clients supported in 2019), in the form of an ESG assessment, a corporate governance action plan (CGAP), an Environmental and Social Action Plan (ESAP), and/or negotiated E&S clauses.
Since 2017, Proparco has set a strategic objective
not yet fully available in many infrastructure
of strengthening its clients’ CSR, their gover-
and energy projects.
nance capability as well as their capacities to
The negotiation and monitoring of an E&S
innovate, implement and support transitions.
action plan for nearly 200 projects in portfolio
Our experts’ support for our clients’ CSR
(37% of projects in portfolio). The monitoring of the effective implementation of these action plans: around one project in two with an E&S action plan has at this
The implementation of sustainable patterns of
time implemented more than 50% of their
consumption and production is a real opportu-
plans’ actions.
nity for companies. It allows them to respond
Of the projects signed in 2019, 51 (representing
to investors’ expectations, gain access to inter-
68% of projects signed in 2019) were sup-
national markets and to be more competitive.
ported, notably through the implementation
At the same time, they can maintain decent
of a specific E&S action plan.
working conditions and establish positive relations with local communities, all the while
Taking into account the above considerations,
limiting their impact on the environment. It is
Proparco supports the implementation of ESAPs
in this perspective that Proparco supports its
and the achievement of better results in the field
clients in improving their environmental and
by supplying its clients with advice, networking
social practices and that in 2014 it implemented
possibilities, tools…
dedicated performance indicators. In analyzing these indicators, in general we note: A significant improvement of means imple-
Our experts’ support for our clients’ governance
mented by our clients, especially in the first three years of financing.
Proparco assesses corporate governance for
An E&S organization and management system
some of its clients, negotiates action plans and
which is comparatively better in equity stake
monitors the implementation of contractua-
projects (principally investment funds).
lized improvement measures. This process
E&S management systems of infrastructure
goes beyond a risk-based approach: it is in line
and energy projects which are less mature at
with Proparco’s search for added value for its
signature than those of other sectors. This is
clients in that it offers them an assessment and
explained by the greenfield situation Proparco
personalized support which may be paired with
finds itself in upon arrival, where procedures are
technical assistance.
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36
DATA
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
EVOLUTION OF E&S ORGANIZATION At signing
MAS: manufacturing, agribusiness and services
22% 45%
16%
26%
37%
Excellent
44%
41%
36%
50%
Weak
28% 19%
28%
45%
57%
Moderate
38% 33%
and infrastructure
5%
18%
17%
MAS
ENI
Banks
Equity: investment funds
38%
Good
ENI: energy, digital
Banks
Best date
39% 38%
23% 21% 7% Equity
MAS
9%
8% 7%
4%
ENI
Banks
Equity
EVOLUTION OF E&S MANAGEMENT SYSTEMS At signing 13% 28%
9% 27%
26%
Best date 36%
31%
21%
48%
60%
Good Moderate
40% 48%
Excellent
55%
36%
Weak
64% 51% 37%
17% 10%
9%
MAS
ENI
17% Banks
36% 15% 13% Equity
1%
18%
15%
14%
4%
MAS
ENI
Banks
Equity
IMPLEMENTATION OF E&S ACTION PLANS (ESAP) IN THE TOTAL PORTFOLIO OF PROPARCO (202 PROJECTS)*
29%
47%
IMPLEMENTATION < 50%
IMPLEMENTATION > 50%
* 18 projects for which an ESAP was negotiated have to be updated in the information system,
24%
IMPLEMENTATION 100% COMPLETED
representing a total of 220 ESAP in the portfolio on January 31, 2020
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
37
FOCUS The E&S indicators in the Proparco project cycle Some indicators are designed to assess E&S
The indicator uses scores from 0 (weak) to 3
project risks.
(excellent).
Th e E&S classification measures potential risk
E&S management system (ESMS) assesses the
upon project appraisal. The risk level which is
management system’s maturity of monitored
set upon appraisal is not reviewed afterwards.
project. The indicator uses scores from 0 (weak)
The classification goes from A (high risk) to C
to 3 (excellent).
ENGIE: an evaluation and E&Senhanced risk management As part of the
(low risk), to which the prefix IF is added for
E&S implementation performance measures the
Financial Intermediaries. The projects rated IF-A,
evolution of the compliance of projects with IFC
renewable energy
A, B+ as well as investment funds classified IF-B
standards and Proparco requirements. A score
platform in Mexico,
are subject to more detailed due diligence. An
of 0 (weak) to 3 (excellent) is calculated using
Engie developed and
an Excel form.
implemented an E&S
environmental and social action plan is usually negotiated with the client and its implementation
E&S effectiveness is a combination of the
development of a
management system
previous three indicators. It is calculated using
to facilitate a proactive
Th e residual risk evaluates the E&S risk to date,
the following formula: E&S effectiveness = E&S
approach in the
crossing the effectiveness rating (see below)
performance x (E&S organization + ESMS). The
identification, evaluation
with risk potential. It is classified into four
result is then adjusted for classification on a
and management
categories for direct projects: very high (0),
0-to-3 scale.
of E&S risks of each
is monitored by the ESG division.
project (two wind
high (1), moderate (2) and low (3). It is updated annually or biennially depending on the level of
When an unforeseen event occurs involving signif-
projects and four solar
monitoring assigned to the project (moderate
icant negative ESG impacts for a project, or when
projects). In line with
or sustained/reinforced).
a project lags significantly behind its E&S action
international standards,
plan, it is in “ESG alert”.
this approach resulted
The E&S performance indicators measure the
in the design of specific
evolution of the performance of the means implemented by the client and the results obtained.
The monitoring of these risks is carried out as part
operational procedures
Their characterization varies depending on the
of projects E&S monitoring and as part of active
for each project with,
type of counterparty (FI, non-FI). An initial state is
supervision conducted thanks to screening tools.
inter alia, heightened
realized upon the signature of the project (t0) then
When identified, these risks may generate an est-
monitoring of
they are updated annually or biennially depending
ablished non-compliance with commitments made
biodiversity impacts and
on the level of monitoring assigned to the project
by Proparco in its sustainable development strategy,
a strong commitment to
(moderate or sustained/reinforced):
the deterioration of the financial health of the pro-
communities.
E&S organization, measures the maturity of the
ject, or an external reaction by the media or NGOs
E&S organization of the monitored companies.
which can potentially harm Proparco’s reputation.
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Since Proparco ratified the Corporate Governance
agreement. Moreover, the implementation of
Development Framework (CGDF) in 2011, it has
ten action plans for portfolio project gover-
been committed to this approach
nance is being monitored by Proparco. The key
along with 33 banks and develop-
highlights of the assessment and monitoring
ment finance institutions. This
carried out are as follows:
40
framework agreement strives for
Concerning family companies, issues of
the implementation of a common
succession and family terms of employment
policy and methodology for good
are recurrent.
governance, inspired in large
Board of administration committees (audit,
part by the work of the IFC on its
risk, appointments and remuneration, and
performance standards.
E&S) are not always created.
In 2019, 40 projects underwent
without internal regulations, without a
corporate governance evaluation.
secretary to the board and nearly always
Among the projects signed this
without a self-evaluation procedure.
year, four have seen a specific governance
Internal control is often undersized.
PROJECTS EVALUATED on corporate governance in 2019
Boards of administration often function
plan of action annexed to the commitment
Good governance as the operating framework of the company Corporate governance provides the decision-making framework within which company objectives, the means to reach them and performance monitoring are set. Today, good corporate governance is also understood as the respect of business ethics and E&S commitments. It also contributes to strengthening and rationalizing the exercising of power in the company and thus acts as an instrument to limit risk and drive growth. Additionally, it promotes transparency and aims to establish an atmosphere of trust, which is vital to attracting investors and lenders. Good governance is therefore a key factor in improving access to financing. It is essential to the creation of wealth and the development of employment.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
AL AMANA: the Moroccan MFI expands its product range In 2019, the microfinance institution Al Amana developed a new activity with support from Proparco: mesofinance. In the context of the regulatory evolution of microfinance in Morocco, the goal of this support is to adapt the MFI’s service offering and to position it on a new segment of clientele: micro and small enterprises. An expert mission is planned to support Al Amana in the design of a financial and non-financial services offering and, during a pilot phase, in the uptake of this new offer.
Results of financing our clients’ technical assistance With its technical assistance offer, Proparco leads its clients toward more positive impacts by providing them with adapted expertise and know-how. It supports the evolution of their strategies and practices as well as their drive to innovate. Since 2010, Proparco has financed
€3.3m
since 2010 for technical assistance
61 technical assistance projects for a total of 3.3 million euros on its own budget. Half of these focus on improving ESG practices and complement the expertise brought by Proparco during the appraisal and monitoring phases of projects.
Growth and diversification of technical assistance financing
In the context of its 2017-2020 strategy, Proparco has allocated 3 million euros from
With the goal of accelerating impacts and
its own resources over four years to ensure the
promoting a transformation of clients in line
deployment of technical assistance. In 2019,
with their needs and our ambitions, Proparco is
483,000 euros were disbursed to cofinance
seeking to increase the frequency and amounts
outsourced services and capacity- building
of its technical assistance projects. In 2019, it
activities for 19 clients. Ten new techni-
thus pursued its efforts to mobilize additional
cal assistance projects were also signed in
financing from its own budget and from FISEA
2019 for a total amount of 659,000 euros.
funds available since 2010. As of the end of 2019, it has several financial packages at its disposal to support target clients on specific topics:
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40
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
659,000 EUROS OF NEW TA PROJECTS FROM OWN RESOURCES IN 2019 COUNTRY
CLIENT
TYPE OF SUPPORT
Morocco
Al Amana
Impact
Multi-country
Africure
Performance
Sri Lanka
Several domestic MFIs
Impact
Mali
Baobab Mali
Performance
Georgia
CREDO
Performance
Multi-country
Enko
Impact
Cambodia
GRC
Impact
Multi-country Africa
SIFCA
Impact
Niger
Sonibank
Performance
Morocco
TGCC
Performance
ARE Scale Up Facility: 700,000 euros have been made available by the European Union to support African companies in the energy sector. The first TA projects to be provided to companies in which Proparco invested were
GOLDEN RICE: a responsible Cambodian rice
identified in 2019. Financial inclusion: Proparco can use two
Golden Rice is one of the main Cambodian
financial packages from the European
rice exporters, specialized in processing,
Commission to strengthen capacities of
milling and sale, notably of jasmine rice.
banks or MFIs that wish to increase their
Recognized for the quality of its rice, the
SME financing and support these clients
company received the prize for the worldâ&#x20AC;&#x2122;s
to become more attractive in the eyes of a
best rice for two consecutive years. To help
financier. These funds, which will be deployed
Golden Rice diversify its offering while
at the same time as guarantees granted to
making its supply chain more sustainable
financial institutions, are available in Africa
and responsible, Proparco implemented a
(3.5 million euros) and in the MENA area (2
technical assistance project. Thanks to the mapping of Golden Riceâ&#x20AC;&#x2122;s supply chain, concrete solutions were proposed to improve sourcing practices from rice growers and to better master E&S risks, notably in the areas of deforestation and child labor.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
41
Organic rice producers in the province of Preah Vihear, in the north of Cambodia. The Golden Rice company benefits from Proparcoâ&#x20AC;&#x2122;s technical assistance to improve its supply chain and to better master E&S risks.
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Our impact on mobilizing financing flows and on unlocking investment in countries To simulate the reorientation of investment toward transitions, Proparco aims to increase its effect on private sector mobilization and to support innovation to unlock investments.
Our effect on the mobilization of private finance In 2019, 2.39 billion euros of private finance was mobilized by Proparco (OECD method). The volume of projects authorized by Proparco and eligible for the calculation of the mobilization from the private sector was 2.36 billion euros, making a mobilization ratio of 1.01.
In the scope of its 2020-2022 strategy, Proparco’s
level associated with the finance mobilized.
ambition is to expand its role as catalyzer of
The methodology consists of identifying the
private actors in aiming to double the mobili-
private flows mobilized and allocating them
zation of private financing flows.
consistently among the DFIs while avoiding any double counting among the DFIs co-
The concern is more largely to channel private
financing a project.
financial flows toward sustainable development investments (SDIs). Proparco would thus like
In 2019, the global estimate of amounts mobilized
to strengthen the contribution of other private
by Proparco was 2.39 billion euros. In contrast,
actors in sustainable transitions and, in so
project volume authorized and eligible for the
doing, better respond to the issues raised in
calculation of private sector mobilization was
financing the SDGs.
2.36 billion euros.
A rising mobilization ratio since 2017
Africa, the top continent in mobilizing private finance
In order to measure its spillover effect on pri-
The volume of Proparco’s 2017 and 2018
vate financing, Proparco uses a mobilization
private sector mobilization was calculated
ratio whose methodology, developed by the
based on the amounts of signed projects. The
OECD along with development finance insti-
graph entitled “Evolution of the amounts
tutions (DFIs), is recognized worldwide. This
mobilised from the private sector from 2017
ratio makes it possible to measure the amounts
to 2019” therefore shows the 2019 data with
mobilized from the private sector by Proparco’s
regard to projects signed in 2019. In 2019, the
financing, by emphasizing a multiplier effect
mobilization ratio reaches 1.34, indicating an
resulting from both instrument type and risk
upward trajectory since 2017.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
EVOLUTION OF THE AMOUNTS MOBILISED FROM THE PRIVATE SECTOR FROM 2017 TO 2019
DATA 2,022
Amounts signed over the year (€M) mounts of private finance mobilized A by Proparco (€M)
1,503
1,504
1,276
1,033
1,026
1.34
1.18
1.01
2017
2018
MOBILIZATION OF PRIVATE FINANCE BY INSTRUMENT IN 2019 (%)
20%
LOANS
2019
COEFFICIENT MULTIPLIER BY INSTRUMENT IN 2019 EQUITY – DIRECT
8%
BANK CREDIT LINES
1.37
EQUITY – FUNDS
EQUITY – DIRECT
51%
1.27
BONDS
9%
BONDS
1.02 1.49
GUARANTEES
8%
EQUITY – FUNDS
BANK LINES OF CREDIT
5%
LOANS
GUARANTEES
1.35 0.53
MOBILIZATION OF PRIVATE FINANCE BY GEOGRAPHIC AREA IN 2019 (€M)
Europe
30.2
Middle East Latin America and Caribbean
475.4
101.6 Africa
1,158.7
43
Multiregional
247.3
Asia
373.2
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
ACCION VENTURE LAB: the fintech firm promoting financial inclusion In 2019, Proparco invested in the Accion Venture Lab (AVL) fund, one of the best fintech specialists in Africa, Asia and Latin America. The Accion Venture Lab fund aims at supporting the emergence of structuring startups for the financial inclusion of individuals. Proparco participated in the second closing with an amount of 1.8 million euros, alongside private investors mostly. For both successive closings, the private amount mobilized reached 7.1 million euros, self-financing was 8.9 million euros and public cofinancing was 24.9 million euros (FMO, the Dutch counterpart of Proparco and foundations). The FMO and Proparco invested in the riskiest financing tranche of the investment vehicle. According to the OECDâ&#x20AC;&#x2122;s calculation method, Proparco can attribute itself 50% of the private finance mobilized in equal proportions with the FMO, a public co-financier which participated in the riskiest tranche of the CIV, and 50% of the private finance to the prorata of participation of public cofinanciers, amounting to 4.5 million euros. The mobilization ratio is thus 2.5.
In 2019, Proparco invested in the Accion Venture Lab fund (AVL), a fintech specialist in Africa, Asia and Latin America. The fund will support the emergence of structuring startups for the financial inclusion of individuals.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
Among the different instruments used in 2019,
(guarantee tools and technical assistance
loans contributed the most to mobilized private
envelope ARE Scale Up).
finance (71%) due to their significant weight in
Contribute to the stability and resilience
the total amount of 2019 authorizations (76%).
of renewable energy projects in countries
Guarantees play a particularly important role
which may have non-convertibility risk or
in mobilization, as the multiplier coefficient of
non-transferability of local currency into
this instrument is 1.49.
foreign currency (risk-sharing tools from the T&C Facility).
Consistent with Proparcoâ&#x20AC;&#x2122;s positioning, Africa is the top continent for Proparcoâ&#x20AC;&#x2122;s mobilization
In 2019, as part of its new initiative CreatiFI,
of private finance, with 1.2 billion euros of
the European Union granted Proparco funds in
private finance mobilized in 2019, 49% of total
the form of guarantee and technical assistance
mobilization in 2019. 34% of private finance
to facilitate access to finance for cultural and
is mobilized in climate co-benefit projects,
creative industries (CCI): the new CREA Fund
amounting to 801 million euros.
facility.
Our results in the deployment of blending instruments
Three programs for private financial institutions
Since its European Union accreditation in 2016,
Furthermore, Proparco is responsible for acti-
Proparco has been granted two delegated finan-
vities deployed to private financial institutions
cing allocations which Proparco dedicated to:
in three programs which use funds initially
Increase its investments in companies developing solutions for access to energy in Africa
delegated to AFD: The EURIZ mechanism signed in April 2019
CREA FUND: facilitate the financing of cultural and creative industries The CREA Fund initiative is designed for financial intermediaries seeking to explore opportunities in the cultural and creative industries (CCI) in Africa and the Caribbean. A technical assistance package of 1.4 million euros has been allocated for carrying out market studies and for capacity building of financial intermediaries and SMEs. A guarantee of 5 million euros will also be deployed to encourage investment funds to take an equity share in companies in the sector. The facility was granted in December 2019 as part of the CreatiFI initiative, launched by the European Commission. Formalization of the contract is underway, and the initiative should begin in the second semester of 2020.
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
With a 65-million-euro financing, Proparco supports the modernization and expansion of the French Lay Mission network, notably in non-Frenchspeaking countries such as Ethiopia and Egypt. Over 60,000 students are enrolled in 39 countries.
THE MISSION LAÏQUE FRANCAISE is modernizing Proparco is supporting the Mission Laïque Française (MLF) with a senior loan at market conditions totaling 60 million euros and a grant of 5 million euros. This financing will enable MLF to modernize and expand its network, notably in Africa and the Middle East, to enroll 1,500 new schoolchildren and to cope with the competition. The loan will finance infrastructure, whereas the grant will support two high-impact operations seeking to create two regional training centers for teachers and an energy efficiency program.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
with the European Union (EU) and the Africa, Caribbean and Pacific (ACP) group of States. It is composed of a financial instrument which partially covers the credit risk (19 million euros) and a technical assistance grant (6.8 million euros) to support financial institutions and micro-enterprises targeted by the program. The EURIZ mechanism targets so-called “priority” SMEs, located in ACP countries, which have difficulty gaining access to sources of financing due to their risk profile. Five portfolio and individual guarantee projects were signed in 2019. The MENA SME Facility consists of an enve-
An investment from Proparco or the provision of a guarantee generates a spillover effect on the mobilization of private finance in favor of the SDGs. A reinforced ambition for the mobilization of delegated funds
lope of 24 million euros of European funds to improve SME access to finance in seven
Proparco’s 2020-2022 strategy reaffirms its
countries in the MENA region. Proparco is
ambitions in terms of mobilizing delegated funds.
in charge of deploying two financial instru-
It aims to increase the volume of new funds
ments: credit lines and portfolio guarantees.
mobilized each year, in line with the strategic
These instruments are complemented by a
objectives of fund delegators (EU and GCF).
rate-subsidy scheme, impact-based incen-
All these projects have an effect on the mobiliza-
tives, a first-loss guarantee mechanism and
tion of private finance for the SDGs, beyond the
technical assistance. The facility should be
acceleration of positive impacts and innovation
operational in 2020.
enabled by concessional financing. In investing
The TFSC program, approved by the Green
or providing a guarantee, Proparco produces
Climate Fund in 2018, aims to support the
a spillover effect on the mobilization of private
evolution of practices in both public and pri-
actors, an effect which is strengthened by the
vate bank and non-bank financial institutions,
transformation generated by technical assistance
in 16 African countries and in Ecuador. The
projects. These projects could not have been
objective is to reorient financial flows toward
implemented without the support of the European
climate mitigation and adaptation projects.
Union or the Green Climate Fund, which are
Proparco proposes credit lines accompanied
genuine allies for Proparco in this approach.
by incentives, which are made available according to criteria drawn up for a climate
In 2019, Proparco also mobilized nearly 50 mil-
financing offering. It also offers technical
lion euros of national resources (grant and rate
assistance to support the identification of eli-
subsidies) for blended operations in line with its
gible and profitable projects and the design and
thematic priorities (climate, financial inclusion,
implementation of climate strategies, gender
entrepreneurship, social sectors) and geographic
equality policies, E&S risk management, and
priorities (Africa and fragile countries). These
marketing and communication activities. The
national resources have been used for technical
overall budget of this program is 653 million
assistance, investment subsidies, rate subsidies,
euros, of which 240 million euros has been
grants with back-to-back loans, project pre-
granted by the Green Climate Fund (GFC).
paration (FAPS) and partial risk guarantee.
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
THEMATIC FOCUS
Impact monitoring of projects signed in 2015 and 2016 In 2019, Proparco carried out an evaluation of the impacts achieved by projects signed in 2015 and 2016, thus after two to three years in portfolio. The study especially focused on jobs created and maintained, CO2 equivalent emissions avoided as well as improved access to essential goods and services.
The monitoring of impacts, a strategic work-in-progress
commitments to its partners and board of directors. Lastly, it contributed to the common endeavour of EDFIs to monitor more closely
Proparco seeks to strengthen the monitoring
the effective achievement of project impacts.
and evaluation of impacts to better understand the results reached by the projects it finances.
In order to carry out this monitoring, Proparco
This first exercise conducted in 2019 by the
used data from the regular contractual
unit in charge of the measurement of impacts
reporting of impact results, E&S reporting,
compared the results achieved by the 96 pro-
operational documents, reporting from other
jects signed in 2015 and 2016 as of December
DFIs as well as data publicly released by the
31st, 2018 with ex ante impact estimates made
projects. It was possible to collect 58% of the
upon appraisal. This monitoring and evalua-
necessary data. This first exercise required
tion work aimed at collecting the number
a particular upgrading effort but remained
of jobs created or maintained, the number
incomplete despite all efforts made.
of beneficiaries of an improved access to an essential good or service and the greenhouse
It represents the start of more regular moni-
gas emissions avoided by the projects. It thus
toring which will be facilitated by particular
enabled the comparison of results reached
attention given to the effective collection of
with estimated forecasts based on a scope of
contractual impact reporting. To simplify
projects which is large enough to be repre-
that, a limited number of strategic indicators
sentative and further monitored on a regular
will be collected, and collaboration between
basis. This exercise was carried out as part of
operational and expertise teams will be
Proparcoâ&#x20AC;&#x2122;s accountability and transparency
intensified.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
The impact on jobs Proparco measures jobs direc-
of 2018. This is why Proparco, in
tly supported among clients
its 2020-2022 strategy, aims to
and projects financed as well
devote 25% of its commitments
as jobs indirectly supported
to projects supporting gender
by these projects. At the end of 2018, we counted nearly 200,000 direct jobs and 270,000 indirect jobs supported by clients and projects signed by Proparco in 2015 and 2016. In all, 467,000 jobs were supported around the world, compared to 461,000 jobs estimated ex ante.
467,000
equality.
jobs in developing and emerging countries supported thanks to projects signed in 2015 and 2016, in line with ex ante estimates
Nearly 198,000 direct jobs supported
270,000 indirect jobs supported The projects signed in 2015 and 2016 supported nearly 270,000 indirect jobs in 2018, which is 105% of ex ante estimates (255,000 jobs). These figures were calculated based on 30 projects signed in 2015 and 2016,
representing 31% of the projects under study. Monitoring data was collected for 2018, or
Regarding direct jobs, the projects signed in
the most recent available date. The impact on
2015 and 2016 created more than 20,000 direct
indirect jobs varies depending on the sector.
jobs which can be added to over 177,000 jobs
Banks and multi-sector investment funds are
maintained since the signature date. These results
the largest contributors. Currently, Proparco
are close to the ex ante forecasts.
is investing in an evolution of the methodology
Nearly 70% of projects signed by Proparco in 2015 and 2016 directly create jobs. On average, companies create 399 direct jobs per project,
DIRECT JOBS SUPPORTED BY PROPARCO
financial institutions 375 and infrastructure 78.
+ 20,630
Infrastructure and companies supported more jobs
direct jobs
than expected, whereas financial institutions are slightly below forecasts. For investment funds, most of the jobs created are counted as indirect,
177,432
206,192
197,578
Ex ante*
2018 Monitoring
as they are created in the fund’s assets. The projects also supported 55,000 direct women’s jobs, which correspond to 28% of overall direct jobs supported. The growth of women’s employment is less vigorous than that
T-0
of men’s. Women held 39% of direct jobs created
* Monitoring carried out on 68 projects, correspon-
by projects signed in 2015 and 2016 at the end
ding to 71% of projects signed in 2015 and 2016.
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P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
to calculate indirect jobs with other EDFIs. The
the multi-sector investment fund assets, the
objective is in particular to take better account of
three most important sectors for indirect jobs
the indirect effects of the agro-business, manu-
are the social (26%), trade (17%) and industry
facturing and infrastructure sectors. Among
and manufacturing (14%) sectors.
GEOGRAPHIC DISTRIBUTION OF JOBS SUPPORTED BY PROJECTS SIGNED IN 2015 AND 2016
0-500 jobs created 501-2,000 jobs created 2,001-5,000 jobs created 5,001-10,000 jobs created 10,001-30,000 jobs created
EVEX HOSPITALS: support for scaling-up Since 2014, Evex Hospitals, which is part of the Georgia Healthcare Group, has been growing strongly: there have been rapid increases in number of beds, in income and in staff. To support the substantial increase in the social impact of the project, Proparco has invested in the scaling-up of Evex. The number of employees increased from 9,410 in 2015 to 11,544 at the end of 2018. Nearly 80% are women. As for beds, the number has risen by 297. The project reached 99% of its estimated ex ante objective.
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
51
1.8 M t CO2-eq were avoided thanks to renewable energy projects signed in 2015 and 2016, 50% more than ex ante forecasts.
Impact on CO2 emissions Proparco supports projects contributing to
Renewable energy projects well exceeded ex ante
low-carbon development trajectories, in par-
estimations. While it was foreseen that the projects
ticular renewable energy projects. For each of
would avoid the emission of 1.2 million tons of
them, a carbon audit is conducted using the
CO2-eq per year, monitoring showed a result of
carbon footprint estimation tool developed by
1.8 million tons of CO2-eq avoided, nearly 604,000
AFD. This tool provides an estimate of CO2 and
additional tons of CO2-eq and the equivalent of the
other greenhouse gas emissions avoided by the
annual consumption of 271,000 French people.
project each year and during the entire life of
This result is mostly due to the increase in capacity
the infrastructure.
of certain renewable energy sites.
In 2015 and 2016, 17% of Proparcoâ&#x20AC;&#x2122;s commit-
The renewable energy projects supported by
ments were devoted to the fight against climate
Proparco are located in seven countries which
change through renewable energy infrastructure
are 41% to 74% dependent on coal or oil products
projects. Most of the projects were wind farms
for their energy consumption. Proparco supports
or solar energy production sites.
their energy transition and demonstrates the feasibility of implementing green solutions in these countries.
TONS OF CO2-EQ AVOIDED Monitoring 2018
Ex ante
1,805,245 1,201,380
52
P R O P A R C O - SUS TAINABLE DE VELOPMENT REPORT
1.4 million people have improved access to health services thanks to projects signed by Proparco in 2015 and 2016.
The impact on improved access to essential goods and services In 2015 and 2016, Proparco signed 35 projects
Energy projects reached fewer beneficiaries
which targeted improved access to essential
because the average energy use in the countries
goods and services for 527 million euros, repre-
rose during the period of the projects. Each
senting 31% of the amounts signed during the
project, while producing the volume of energy
period. In total, 5.8 million people had access
forecasted, was unable to satisfy the energy needs
to essential goods or services thanks to projects
of the ex ante estimated number of people. Nine
financed by Proparco, which corresponds to 97%
projects signed in 2015 and 2016 now produce
of ex ante forecasts. Although energy access and
2,254 GWh per year. This energy meets the basic
education performed below ex ante forecasts,
needs in electricity of 2,551,000 people per year.
access to finance far exceeded the estimates. The six financial inclusion projects signed in 2015 and 2016 enabled an increase in the number of
THEORETICAL BENEFICIARIES OF IMPROVED ACCESS TO AN ESSENTIAL GOOD OR SERVICE (IN THOUSANDS) 4,523 4,402
Monitoring 2018
whom are women. More than one million of projects supported by Proparco. Two financial institutions in Cambodia, AMK and Amret, lost clients following the introduction of stricter
2,551 1,576
regulation in 2017.
1,831
Over the 2015-2016 period, Proparco signed
29 Energy
for a total of 1.8 million in 2018, a majority of them have had access to microcredit thanks to
Ex ante
2,918
active microfinance clients from 156,500 clients
Finance
three education projects in order to strengthen
20
Education
access to quality education for more than 20,000 Total
pupils and students.
Proparco coordination: Valérie Blanchard, Anne-Gaël Chapuis Writing: Proparco Editorial and graphic design, drafting, creation and printing: Iconographic credits:
Cover: Backdrop Agency Inside front cover, p. 16, 19, 25: Oriane Zerah P. 2: Fabien Dubessay P. 3: Alain Goulard P. 14: Thomas Bonnisseau P. 27: Gennadiy Ratushenko
P. 31: Félix Vigné P. 41: Nicolas Axelrod P. 44: Chiara Frisone P. 46: Mission laïque française P. 51: Marc Le Chélard P. 52: Marie Tihon
Printed in France PEFC certification of paper provides traceability from the tree to the paper, as well as the guarantee that the wood used to produce paper fibers does not contribute to deforestation and respects the environmental and social functions of the forest. ISSN: 2677-8068 Copyright: September 2020
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