The successful 300 million euro capital increase of PROPARCO, Agence Française de Développement’s (AFD) private sector financing arm, was noted during the 23 May 2008 Board of Directors meeting. PROPARCO will consequently be able to triple its financings for the sustainable development of the private sector in South countries.

The success of the operation confirms the interest of an economic model which focuses on sustainable investments in South countries.
This success is particularly interesting in view of PROPARCO’s unique economic model based on:

    * a portfolio of projects selected first for their social, environmental and economic impacts;
    * a unique approach to time and risk which means PROPARCO focuses exclusively on long-term financing in geographical areas or on counterparties considered too risky by commercial banks;
    * a governance model which is unique among its European partners with its capital and Board of Directors open to public and private partners from both the North and the South.

As an example of this selection based on impacts, between 2005 and 2007, thanks to PROPARCO’s activities:
• 160 000 people gained access to microfinance services;
• 675 enterprises and 107 000 jobs were created;
• 28.9 million new subscribers were connected to phone networks;
• 1 667 Mw of electricity generation capacities were created saving 5.7 Mt of CO2 and providing 750 000 households with access to modern energy.

A capital increase predominantly subscribed by public and private partners from the North and the South

The capital increase was predominantly subscribed by partners outside AFD Group and consolidates the governance of PROPARCO which is open to private and public shareholders from the North and the South.
The main French financial institutions which support its mission of sustainable development in South countries are CDC Entreprises, Caisse d’Epargne Group via Financière OCEOR, Crédit Agricole SA, Banque Fédérale des Banques Populaires, Natixis, BNP Paribas and COFACE.

Several partners from the South also expressed their will to strengthen their partnership with PROPARCO: the Development Bank of Southern Africa, the Banque Marocaine du Commerce Extérieur, Bank of Africa Group and development institutions (West African Development Bank and the Aga Khan Group via AKFED).

Finally, this operation provided the opportunity to strengthen the role of global players in the environment sector with Suez and Veolia and industrial partners such as Bouygues and Somdiaa.

It also reaffirmed the strategic partnership between PROPARCO and its German counterpart DEG and brought a first representative of French ethical and solidarity investment, Natixis Asset Management, into its capital.

Thanks to this operation PROPARCO will be able to allocate almost 4 billion euros of investments in South countries in five years.

PROPARCO’s partners have reaffirmed their confidence and will make it possible to allocate almost 4 billion euros in five years. PROPARCO’s financial stability will also be strengthened within the context of extending its activity to emerging countries which are by nature more volatile.
PROPARCO will strive to provide financial solutions for innovative projects which catalyze investments from private financiers and will consequently strengthen its arrangement and syndication capacities.

According to Mr. Luc RIGOUZZO, CEO of PROPARCO: “PROPARCO’s North-South shareholding platform is a recognition of the increasingly important role of South institutions in development aid and will be a trump card for PROPARCO’s growth strategy which is based on its activities and historical competencies: expertise in Africa, private equity investment in the Mediterranean and combating climate change in Asia.”

PROPARCO is a Development Finance Institution jointly held by Agence Française de Développement (AFD) and by private shareholders from the North and South. Its mission is to promote private investment in emerging and developing countries in support of growth, sustainable development and reaching the Millennium Development Goals (MDGs). Proparco finances operations which are economically viable, socially equitable, environmentally sustainable and financially profitable. Its sectoral strategy is tailored to the level of development of countries and focuses on productive sectors, financial systems, infrastructure and equity investment. PROPARCO invests in a geographical area encompassing major emerging countries and the poorest countries, Africa in particular, and has extremely high requirements in terms of Social and Environmental Responsibility. In 2007 PROPARCO allocated 600 million euros for more than fifty projects in over thirty countries.

Agence Française de Développement (AFD), a public institution, has been combating poverty and promoting the development of South countries within the framework of France’s official development assistance for over 60 years. AFD is active in the field in over 70 countries and Overseas France and finances and supports projects which improve living conditions for populations, stimulate economic growth and protect the planet:
schooling for children, support to farmers, support to small enterprises, water supply, preserving tropical forests, combating climate change… In 2007 AFD pledged 3.5 billion euros to finance actions in South countries and Overseas France. Thanks to this financing 5.8 million children received schooling and 4 million people received water supply. Energy efficiency projects for the same year will reduce CO2 by 2.7 million tons annually.

AFD press relations

Guillaume de Saint-Phalle, desaintphalleg@afd.fr- Tel.: 33 (0)1.53.44.36.64 - Laure Weisgerber, weisgerberl@afd.fr – Tel.: 33 (0)1.53.44.30.57
PROPARCO
Benoît Verdeaux, verdeauxb@afd.fr – Tel.: 33 (0)1.53.44.37.50