Since the beginning of the crisis and wherever it intervenes, Proparco has been mobilized alongside its clients affected by the Covid-19 pandemic via a global response plan
Proparco has set up a rapid, comprehensive and targeted response to the economic and health crisis related to the COVID-19 pandemic
As early as March, Proparco provided an immediate response to address the needs of its clients affected by the crisis, including deferred repayments in almost 20 countries
Since March, Proparco has been actively participating in the "Covid 19 - Health in common" initiative implemented by AFD Group: a €1.2 billion initiative in response to the worldwide public health crisis
To support the long term economic recovery : an increased financial commitment and the implementation of new and targeted tools. In particular, Proparco added to the €2.5 billion Choose Africa initiative an additional €1 billion "Resilience " component.
Proparco provided an immediate response to support the most affected private players through emergency measures :
Additional equity investments ;
Authorisations to allow the reallocation of funds according to their needs ;
Deferred repayments : in almost 20 countries (Uganda, Niger, Kenya, Côte d’Ivoire…), Proparco postponed deadlines for its most affected clients (especially in the tourism and transport sectors), with a risk exposure of more than to EUR 225 million. For instance:
- In Egypt: Proparco postponed two deadlines for a NBFI (Non-banking Financial Institution) client: the April 2020 deadline moved to October and the October one moved to April 2021 – i.e. an extension of the initial schedule by 6 months. The aim is to allow the client to weather the crisis, while the NBFI itself has granted moratoriums to its clients affected by the impact of the Covid19 pandemic.
- Similarly in South Africa, for a NBFI client in the transport sector: Proparco postponed the June 2020 deadline. As the NBFI's clients were impacted by the crisis, moratoriums were granted to them. The NBFI asked its lenders for their support through this temporary difficulty.
Proparco provides targeted assistance to health stakeholders in Africa – networks of hospitals and clinics, producers of essential drugs or protection equipment – to address the Covid-19 pandemic.
Grants were allocated to Proparco's clients in the health sector. The purpose is to ensure the protection of front-line employees and to strengthen the capacity to supply equipment and consumables to care for COVID19 patients. For example, Proparco has allocated grants to two major healthcare companies in Morocco: the Oncology and Diagnostics Group of Morocco (ODM) and Amanys Pharma (formerly Saham Pharma).
Subsidies were also allocated to ensure good working conditions for employees and to guarantee access to essential products. For example, the Bigot Flowers Kenya horticultural farm has received emergency support from Proparco to mitigate social and health impacts:
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Targeted support: for example, Proparco enabled companies or funds benefiting from technical assistance to change the purpose of this assistance in order to meet urgent needs related to the protection of employees and communities.
Support the long term economic recovery
To support the long term economic recovery : an increased financial commitment and the implementation of new and targeted tools
In addition to emergency measures, Proparco has also deployed a financial response to support affected private companies in the longer run:
Dedicated credit lines in Africa, Proparco granted in 2020 nearly €450 million to local financial institutions to mainly encourage them to maintain and strengthen their support to SMEs.For example :
In May, Proparco and Cofina signed a EUR 10m loan agreement that will facilitate access to credit for Ivorian and Senegalese microenterprises and SMEs and help them play their key role in the economy in these difficult times.
In October, Proparco granted a US$100 million loan to Equity Bank to support Kenyan SMEs. This operation illustrates Proparco’s firm commitment to the Kenyan private sector amid current COVID-19 crisis and economic turmoil, with a particular focus on job-creating SMEs.
“Choose Africa Resilience”: an additional €1 billion to support affected SMEs in Africa
AFD Group stepped up Choose Africa, the French initiative to support MSMEs in Africa. The new component of the Choose Africa initiative, Resilience, is implemented by Proparco and includes a set of tailor-made solutions to address the needs of African MSMEs that have been severely hit by the health and economic crises related to the Covid-19 pandemic. The Choose Africa initiative was initially set at EUR 2.5bn for 2018-2022 and now stands at EUR 3.5bn.
"Bridge by Digital Africa" fund: a new €5 million financial instrument dedicated to start-ups to help mitigate the economic crisis.
Promoted by Digital Africa and deployed by Proparco, the Bridge Fund by Digital Africa intends to provide specific responses to the challenges young innovative African companies face due to the economic impact of the Covid-19 pandemic.It aims to offer a bridging loan, over a maximum period of 24 months, to companies which fundraising process has been cancelled or delayed due to the global economic crisis and the contraction of the investment market. The budget of the fund amounts to €5 million.
Beyond the African continent, Proparco is supporting the private sector wherever it intervenes, especially in the most fragile countries.
Choose Africa Resilience is a key component to mitigate the impacts of the economic crisis in Africa, but Proparco’s response is obviously not limited to the African continent. Proparco is supporting the private sector wherever it intervenes.
For example, in Costa Rica: Proparco has recently reaffirmed its commitment to SMEs. To support Banco Promerica during this crisis, Proparco has renewed its partnership by granting it a USD 45 million credit line dedicated to its recovery plan for its SME clients.
Through a new USD 5 million commitment to the LOK III fund, Proparco supports companies in the financial inclusion sector impacted by the Covid-19 crisis and helps them to reinforce access to credit for MSMEs and the most fragile populations in India. Read the press release
A USD 65m loan has been signed between Proparco, its German counterpart DEG and Mauritius Commercial Bank Limited (MCB). The objective is to support Mauritian businesses affected by the crisis Read the press release
Proparco provides Evex Hospitals with a grant to support its operations against covid19. This grant will finance exceptional protective equipment costs caused by the pandemic. It recognizes the key role the private sector is currently playing to overcome the health and economic crisis and illustrates Proparco’s sustained commitment to its clients. Find out more
In Peru, PROPARCO is supporting BanBif, an historic partner, during the health and economic crises. During the health and economic crises which have seriously affected Peru, PROPARCO is renewing its support to BanBif via a USD 50m loan to support its financing activities to SMEs. Read the press release
In Costa Rica, PROPARCO has reaffirmed its commitment to SMEs to support them during the Covid-19 crisis. To support Banco Promerica during this crisis, PROPARCO has renewed its partnership by granting it a new credit line to finance SMEs, which account for the bulk of the economic fabric in Costa Rica and are facing new difficulties.Find out more
Proparco grants a $5 million loan to Credo Bank in Georgia. The facility is aimed to support short term needs of the bank’s customers and to weather challenges caused by the COVID-19 pandemic to micro, small and medium sized enterprises in Georgia. Read the presse release
European bilateral DFIs and EIB launch €280M financing initiative to support Covid-19 impacted businesses. EIB and EDFI members expand existing - European Financing Partners (EFP) - financing scheme to reduce the economic impact of the Covid-19 pandemic on private sector companies in developing countries. Read the press release
Joint EDFI statements on COVID-19
Joint communiqué of development finance institutions:
Development finance institutions join forces to help alleviate impact of COVID-19 in developing countries
The Development Finance Institutions (DFIs) of 16 OECD countries, grouped under the DFI Alliance, issued a joint statement where they commit to find solutions that will reduce the impact of COVID-19 in developing countries, especially on essential business activities, and help in the recovery. The group will work collaboratively to identify mechanisms designed to bring liquidity to the market, sustain companies, return them to full production, and restore employment opportunities.
2X Challenge and Gender Finance Collaborative response to the COVID-19 pandemic
The COVID-19 pandemic is disrupting global health, economic and financial systems at remarkable speed. Emerging markets are expected to be especially hard hit by the qapandemic and its aftermath, and development finance institutions (DFIs) are coming together to identify common solutions to help the private sector in these markets weather the crisis.
As DFI-led initiatives with expertise in gender lens investing, the 2X Challenge and the Gender Finance Collaborative (GFC) stress that the COVID-19 pandemic has and will continue to disproportionately affect women and girls, and our response to it should take these differences into account. We are therefore calling for a gender-sensitive response to the crisis by investors, including our peer DFIs, by providing a set of practical recommendations to incorporate in to COVID-19 relief strategies.
Scaling up cooperation among Development Finance Institutions in response to COVID-19
Today, we are facing a health and economic crisis unprecedented in its size and complexity – affecting both supply and demand, developed and developing countries – and disrupting markets, trade, investment-led growth and job creation. The IMF anticipates a global economic contraction of 3% while the World Bank foresees a 35% decrease in FDI flows to developing countries due to the impact of COVID-19.