How Proparco is supporting French strategy in the Indo-Pacific region

The Indo-Pacific region - home to two-thirds of the world's population and 40% of its GDP - is becoming the world's new strategic hub. The region’s size means that it has the essential scale needed for dealing with global challenges, especially social, climate and environmental ones. These challenges lie at the heart of Proparco's mission in the region.

The Indo-Pacific region - which extends over some forty countries, from the coast of East Africa to the Eastern Pacific - is currently witnessing wholesale strategic changes. This is the conclusion of the Ministry for Europe and Foreign Affairs in a recent report on French strategy in the Indo-Pacific region. The global economic centre of gravity has shifted to this region, which comprises six G20 members (Australia, China, South Korea, India, Indonesia and Japan). According to the IMF, it could account for over 50% of global GDP, and its markets 40% of global consumption by 2040.

A geographic and strategic region

The Indo-Pacific region is also subject to significant environmental and climatic vulnerability. In an article published in Le Monde at the end of 2022, Antoine Bondaz, a political scientist, and Philippe Orliange, Executive Director of Geographies at Agence Française de Développement, pointed out that “nearly half of the world's greenhouse gas emissions are generated in this region. The very existence of the many island states in the region is directly threatened by climate change.

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The Indo-Pacific region in numbers

Around forty countries, including India and China, the two most populous countries on the planet.
65% of the world’s population
50% of global GDP by 2040
Nearly 40% of the world’s poorest populations
Nearly 50% of global greenhouse gas emissions

PROPARCO IS WORKING AT THE HEART OF FRANCO-INDIAN COOPERATION IN THE INDO-PACIFIC REGION

India, the world’s most populous nation, and its neighbour China, lie at the heart of this geographic and strategic area. In an interview she gave to Proparco, Chrysoula Zacharopoulou, Secretary of State for development, Francophonie and international partnerships, reflected that with the 6th largest global GDP, this sub-continent, which has held the presidency of G20 since December 2022, "lies at the crossroads of the Indian and Pacific Oceans".

She adds that “France and India are partners and allies in defending all global commons", considering that France and India have so much to do together and that Proparco plays a key role in this relationship. “[In India], Proparco plays a dual role by directly financing the private sector to support companies committed to the climate, health and the environment, and also as a catalyst for private investment.”

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INTERVIEW

“We need to involve the private sector. This is why Proparco’s role in India is so important”

Chrysoula Zacharopoulou, Secretary of State for development, Francophonie and international partnerships

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In the view of Emmanuel Lenain, France’s Ambassador to India, Franco-Indian cooperation in the Indo-Pacific is increasingly focused on finding solutions to major global issues - global warming, biodiversity conservation and the blue economy - and throughout the Indo-Pacific region "through powerful stakeholders and instruments such as Agence Française de Développement. Proparco not only finances private businesses but, more importantly, it encourages them to focus on operations and projects that have a positive impact on protecting the planet, gender equality and meeting Sustainable Development Goals.”

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INTERVIEW

“Proparco plays a major role in a country like India where it has been present for the past 14 years.“

Emmanuel Lenain, France’s Ambassador to India

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AN APPROACH BASED ON INVESTMENT FUNDS

Proparco is active in South and Southeast Asia where it helps local investors throughout the Indo-Pacific region to meet sustainable development goals in a more effective manner.

Proparco is supporting Indian investors in the energy sector (BHEL in Chad) and pharmaceuticals (Africure, Strides Pharma) as well as investment funds (Aavishkaar Frontier Fund, Quadria Capital, Kaizen, SAGF II, Circulate Capital) active in the health, education, agriculture and environment sectors.

As Jérémie Ceyrac, Head of Equity at Proparco explains “over the past five years, Proparco has invested nearly €200 million in long-term financing of SMEs in the region that wish to strengthen their equity. The Indo-Pacific corridor is an essential platform for cooperation between southern countries, facilitating cross-border exchanges of expertise. This is aptly demonstrated by the Kaizen and Quadria Capital investment funds, based in India but with a foothold throughout South-East Asia, and by d.Light, a global leader in solar products and systems which has been active in India as well as in East Africa since it was set up.”

These investments showcase the commitment of Indian stakeholders to achieving Sustainable Development Goals as well as providing opportunities for working with the private sector.

Diane Jegam, Proparco Regional Head in Southeast Asia, goes on to explain how Proparco’s approach based on investment funds allows it to have a greater impact on a regional scale and to directly support innovative projects spearheaded by the private sector in the various Indo-Pacific countries: "Tackling climate change and supporting social sectors of the economy lies at the heart of Proparco's mission in India. Thanks to the range of available solutions, Proparco is able to promote and finance projects headed up by Indian actors with a development mandate outside of India.”

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INTERVIEW

“These are concrete developments that Proparco is using to support French strategy in the Indo-Pacific region”

Diane Jegam, Proparco Regional Head for Southeast Asia

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Jérémie Ceyrac goes on to say that “Proparco will give fresh impetus to our operations in the sub-continent thanks to an even more assertive approach to preserving the planet and reducing inequalities (including socio-economic, territorial and gender inequality). We will also continue to support French expertise in these two areas, as we did recently by partnering a subsidiary of solar roof specialist GreenYellow in Thailand and Vietnam.”