PROPARCO: a year of growth in favour of a sustainable private sector

Paris, 31 May 2011. For the release of its 2010 annual report, PROPARCO, the French Development Agency (AFD) subsidiary dedicated to the private sector, announces record activity levels with nearly a billion euros in signatures. This further 6% activity growth over 2009 also comes at a time of good financial performance and strong developmental impact.

2010: a 5th consecutive year of growth
During the course of 2010, PROPARCO achieved €944m in signatures as against €893m in 2009. On 31 December 2010, its portfolio stood at €2.1 billion, 31% more than on 31 December 2009. This growth took place in a context of strong risk management, with a particularly low doubtful debt level of 1.6% (as against 2.6% in 2009). The balance sheet rose from €1.9 billion in 2009 to €2.6 billion in 2010.

"This success clearly shows that our economic model as a patient and responsible investor is the right one. Tying our activities in with those of AFD, contributions from our shareholders in the North and the South, our solid financial structure and our extensive network of partners all help to explain this success", says Etienne Viard, CEO of PROPARCO.

A very African year
In 2010, Sub-Saharan Africa accounted for 45% of PROPARCO financing. With €420m, signatures are 60% up on 2009, making PROPARCO the leading bilateral development finance institution in Africa. It concentrated its financing on small and medium enterprises, as well as on energy, telecoms and infrastructures. For example, PROPARCO financed extension of the port of Dakar in Senegal and the densification and extension of a mobile phone network in Chad. The Investment and Support Fund for Businesses in Africa (FISEA), owned by the AFD and managed by PROPARCO, enabled €48m to be invested in 14 projects in 2010.

With €137m of investments, PROPARCO has maintained a strong presence in the Mediterranean and Middle East.

"In 2010, PROPARCO became a stable equity partner for major Mediterranean operators, such as Byblos Bank, the BMCE or the Tunisian UNIMED pharmaceutical laboratories. Against the backdrop of the historical events being played out in the southern Mediterranean, PROPARCO is determined to continue its efforts in 2011 in this region, which remains one of its priorities", continues Etienne Viard.

A successful start in Latin America
2010 was also marked by a successful start in Latin America and the Caribbean, which accounted for 27% of signatures. Two years after extending its geographical coverage to all developing countries, PROPARCO invested €256m in this region. It focused its efforts on green and equitable growth, with particular support for renewable energy projects, such as a wind farm in Mexico and the extension of a geothermal power plant in Nicaragua.

The growth of its acquisitions activity
2010 was marked by considerable growth of private equity activity with €204m of investments– up 123% over 2009.

"With this exceptional level of private equity activity, PROPARCO can once again concentrate on its initial vocation, that for which it was created 33 years ago: to provide long-term, on-the-spot support to help Southern entrepreneurs develop", adds Etienne Viard.

In 2010, PROPARCO carried out sixteen direct investment operations, two of which were on a significant scale, involving a reference Lebanese bank (US$30m) and an African cement works holding company (US$35m). To leverage the impact of its actions on employment and growth, PROPARCO invested €120m in 17 investment funds, such as the pan-African Aureos Health Fund which specialises in SMEs in the health sector.

Strong support for banks
PROPARCO provided unprecedented support for financial establishments. This activity, which represented 55% of the business volume in 2010, helps encourage long-term investment in companies, in particular small and medium enterprises in Africa. PROPARCO also supported numerous projects to promote energy efficiency and renewable energies. At the same time, it assists its customers in improving the environmental and social quality of their projects.

An activity with a strong developmental impact
In 2010, PROPARCO financing and co-financing helped:

• connect 1.7 million people to a telecommunications network,
• improve the environmental and social performance of 20 projects
• boost State revenues by €210m per year
• create or maintain 115,000 direct jobs and 170,000 indirect jobs
• reduce greenhouse gas emissions by 1.7 million tons of CO2 equivalent per year
• 300,000 people gain access to microcredits.

2011: consolidation of the business model
In 2011, PROPARCO will aim to pursue its private sector financing role, with greater emphasis on sub-Saharan Africa and the Mediterranean region. It will also be entering the carbon finance market in order to fill out its range of financing products and offer its clients a broader and more innovative approach to combating climate change. It will also aim to strengthen partnerships with development finance institutions to provide solutions more closely tailored to the needs of its clients.

"This fifth consecutive year of growth confirms our place among the world's leading bilateral financing institutions. To consolidate our role as a catalyst for private investment in the southern countries, we must maintain our level of activity and strengthen our subsidiarity on the markets. The primary goal of this coming year will be to consolidate our model", explains Etienne Viard.

About

PROPARCO, the French Development Financial Institution is partly owned by Agence Française de Développement (AFD), with private shareholders from North and South. PROPARCO’s mission is to be a catalyst for private investment in developing countries which targets growth, sustainable development and reaching the Millennium Development Goals. PROPARCO is one of the largest bilateral private sector development banks worldwide. PROPARCO invests in a geographical area ranging from major emerging countries to the poorest countries, in particular in Africa, and has high-level requirements in terms of Social and Environmental Responsibility.  For more information, visit www.proparco.fr


► Download annual report 2010 (pdf)