Agence français de développement

AFD started its operations in Ghana in 1985, marking the opening of the first AFD representation in an English speaking country. Since 1986, AFD has concentrated its operations on major economic infrastructure development projects in the country, mainly in the telecommunications, transport and energy sectors. AFD has also intervened to a large extent in agriculture and rural development, particularly in rural water supply, perennial crops sector (rubber, oil palm), as well as food crops (rice).

  1. 2. French Development Agency tools

AFD Group’s investments in Ghana can be channelled through various instruments:

  • Concessional loans to the State of Ghana (AFD);
  • AFD grants to finance development programs or technical assistance, including grants from the French Global Environment Fund (FFEM) or within the Trade Capacity Building Program (PRCC);
  • Medium or long-term loans to public companies without any guarantee from the State (AFD), as well as medium or long-term loans to private companies or public-private partnerships (through Proparco, AFD’s subsidiary dedicated to the private sector);
  • Loan guarantee in local currency by AFD (ARIZ individual or portfolio risk-sharing mechanism) or Proparco;
  • Investments in equity or quasi-equity (Proparco or FISEA);
  • Training activities through AFD’s training center based in Marseille (south of France), the CEFEB (Center for Financial, Economic and Banking Studies): professional master degree courses, short term seminars or specific training sessions and workshops;
  • Implementation of studies and strategic sector reflexions (AFD).

Besides these financial tools, AFD is also in charge of implementing the Debt Reduction and Development Contract (C2D) on behalf of the French State, within the framework of France’s additional effort towards debt reduction for Heavily Indebted Poor Countries (HIPC Initiative) of which Ghana reached the completion point in July 2004. The C2D mechanism proposes to convert into grants debts from French Official Development Assistance (ODA) loans.

  1. 3. AFD Group commitments in Ghana since 2004

Ghana has become one of the main beneficiaries of AFD Group’s commitments in West Africa since 2004, date of Ghana’s achievement of the HIPC Initiative completion point. On a cumulative basis, total commitments of the Group since 2004 amount to € 399,30 M, among which € 319,45 M with loans, € 73,76 M with grants (including C2D) and € 6,09 M with guarantees. See the table below for more details:

Tool/year (in M€) 2004 2005 2006 2007 2008 2009 2010 Total
Grants
AFD 2,00 1,80 1,60 0,90 0,75 0,79 7,84
C2D 21,00 20,99 21,69 63,68
FFEM 1,20 0,04 1,24
PRCC 1,00 1,00
Sub-total grants 1,00 23,00 3,00 1,60 21,89 0,75 22,52 73,76
Loans
AFD to the State 33,00 42,40 42,50 37,00 50,00 40,00 244,90
AFD to Public Cies 14,00 14,00
Proparco 7,74 44,50 8,31 60,55
Sub-total loans 33,00 42,40 50,24 81,50 50,00 0,00 62,31 319,45
ARIZ guarantees 0,80 0,18 0,15 4,96 6,09
Total 34,00 65,40 54,04 83,28 71,89 0,90 89,79 399,30

The breakdown of the commitments from 2004 to 2010 per sector (€ 399.30 M, ie around € 57 M/year) is as follows:

(1) Agriculture and Rural Development, including Environment (11%)
(2) Infrastructure, including Roads (45%) and Support to Metropolitan, Municipal and Districts Assemblies (55%) 
  1. 1. Ongoing projects

Since the end of 2004, AFD has focused its activities on three main sectors: Agriculture & Rural Development, Urban Development and Support to local Governments, including Urban Transports, and Water & Sanitation. The current portfolio of 17 ongoing projects amounts to about € 256 million. They include, by sector (if not specified, the aid modality is concessional loan to the State):

  • Agriculture and rural development
    • Perennial Crops (rubber and oil palm) Development Project, 2006-2012, € 19,4M (includes a grant of € 2 M)
    • Rice Sector Support Project, 2009-2013, € 13,8 M (includes a grant of € 1,3 M)
    • Natural Resources and Environmental Governance Budget Support, 2008-2012, € 5 M
    • Rubber Outgrowers Plantations Project IV, 2010-2014, € 14 M (concessional loan to Agricultural Development Bank)
    • Amansuri Estuary/Mangrove Swamp Forest Conservation, 2010-2012, € 44.000 (FFEM grant to Ghana Wildlife Society)
  • Urban development and support to local governments
    • Kumasi by-pass Project, 2005-2011, € 23 M
    • Urban Environmental & Sanitation Project II, 2006-2011, € 25 M
    • Urban Transport Project, 2008-2013, € 20 M
    • District Development Facility, 2010-2012, € 15 M
    • Awoshie-Pokuase Road and Community Development Project, 2010-1014, € 30 M
    • Ghana Urban Management Pilot Project, 2011-2015, € 40,5 M (includes a grant of € 0,5 M)
  • Water and Sanitation
    • Water Supply and Sanitation Project in the Brong Ahafo region, 2008-2012, € 18,6 M (includes a grant of € 1,6 M)
  • Private sector
    • ARIZ individual and portfolio risk-sharing guarantees with SG-SSB bank, € 5.000.000
    • Upscaling to Mesofinance Project, 2009-2012, € 900.000 (grant to a financial institution, Procredit SLC)
    • Downscaling to Mesofinance, 2011-2013, € 250.000 (grant to the bank SG-SSB)
    • Business French Training Project, 2008-2011, € 1 M (PRCC grant to the State)
  • Budget support
    • Contribution to the Multi-Donor Budget Support (MDBS), 2011-2013, € 21,69 M (grant under the C2D)

Besides these projects, AFD finances funds for expert services and capacity strengthening, whose purpose is to finance project preparation studies and strategic reflexions (€ 1.25 M).

  1. 2. Strategy and perspectives

AFD’s ongoing activities are in line with:

– The Ghanaian government strategy as defined in the Ghana Shared Growth and Development Agenda (GSGDA), for the period 2010-2013,

– France’s strategy in Ghana (also based on GPRS II 2006-2009, the former GSGDA) as defined in the Partnership Framework Document (DCP) signed in 2006 for 2006-2010.

In the future, AFD’s strategy in Ghana will focus on:

– With regards to sectors : agriculture, urban development/support to local governments (including water and sanitation) and energy (new sector considering the importance for Ghanaian economy and the AFD Group’s financial instruments available),

– With regards to aid modalities, carrying on with concessional loans to the State and developing direct loans to public and private companies, notably supporting public-private partnerships.