Mediterranean and Middle East

A rapidly developing method to finance the economy

The work of the conference reviewed the practices, products and volumes of this financing method, which is experiencing rapid development with a billion dollar turnover and an annual growth rate of 30%. It also highlighted the results of a study jointly led by CGAP and AFD.

This conference was organized in the context of the partnership agreement signed last January between AFD and the Islamic Development Bank (IsDB).

The exchanges were rich and lively and brought to light the strengths and weaknesses of these tools, which are increasingly requested in a number of countries where AFD operates. They also more clearly identified the needs of beneficiaries, financial institutions and central banks, which play an essential role in terms of the regulatory framework and regulation.

A whole host of innovative experiences in the field 

Several observations were made: the existence of a strong demand for this type of financial product, particularly from the poorest; the proliferation of innovative experiences in the field, which are often poorly identified; the need to launch benchmarking exercises in order to build technical, financial and institutional references. 

A knowledge platform on the Internet

It was agreed that the various donors and institutions concerned, including IsDB and AFD, will support this process by promoting the implementation of information and exchange tools, such as a knowledge platform backed up by a dedicated website, and by holding an annual conference. An invitation was launched for the next one to be held at AFD’s headquarters in Paris. 

Bilateral talks were held between AFD’s Chief Executive Officer, Dov Zerah, and the President of IsDB, Mr. Ali, on the sidelines of this conference, and meetings between the respective operational departments defined practical ways of implementing the agreement, notably the possibility of staff exchanges and the first cofinancing operations in the Mediterranean.

Nevertheless, the issue of evaluating public policies is neither a new idea, nor a novel practice. It becomes increasingly essential, however, to determine whether the evaluation task is properly conducted. We need to discuss whether the way evaluations are undertaken produces an accumulation of knowledge that is accessible to decision makers, or whether the context in which development policies are implemented severely reduces the usefulness of past experiences for designing future projects.
Can we learn from our own and others’ experiences in the field of development? If so, how can evaluation contribute and how is it that we seem unable to translate these experiences into practice? If not, what are the factors hampering the learning process?

Conference Center Pierre Mendès-France Ministère de l’Economie, des Finances et de l’Industrie , Paris 

On 15 December 2011, the Council for Development and Reconstruction and AFD signed a financing agreement for a €21m soft loan, in the presence of the Ambassador of France, Denis Pietton. This loan aims to finance the second phase of the Cultural Heritage and Urban Development Program in Tyr and Tripoli.

Tourism and social cohesion

AFD contributed to the first phase of the program by allocating a €12m concessional loan. The program was cofinanced by the World Bank and Italian cooperation and covered five historic cities in Lebanon. AFD’s financing concerned the cities of Tyr and Tripoli due to the predominance of social issues.

The Tripoli Citadel.  

In Tyr

The first phase of the program concerned the development of the fishing port.

The second phase will refurbish souks, extend the coastal promenade linking the fishing port with the archaeological port and restore a Caravanserai, which will be turned into a crafts center, as well as a former observation tower, which will house the tourist office.

An example of works on a public space: the four phases of the Tripoli platform

In Tripoli

The first phase of the program mainly aimed to conduct works on the Saint-Gilles Citadel, the main monument in the historic center, and to build a platform on the Abou Ali River, which restored unity in the city center. The second phase will refurbish souks, harmonize the facades of buildings along the river and restore two Caravanserai, a historic hammam and traditional dwellings, particularly those located at the foot of the Citadel. Travel conditions in the city center will also be improved with the creation of pedestrian areas and the development of public spaces. 

Expected impacts

The main expected impact of the program, which is already visible, is the regeneration of historic centers from an economic point of view, through tourism development, and in terms of social aspects by developing common historic heritage, which is a vehicle for social cohesion. This explains why it is strongly supported by local elected officials and by the communities in question. 

The completed Tripoli platform

During the signing, Ibrahim Mayaki, Chief Executive Officer of the NEPAD Planning and Coordinating Agency (NPCA) and former Prime Minister of Niger, and Yves Boudot, Director of AFD’s Sub-Saharan Africa Department, had the opportunity to discuss – in addition to ICT development in Africa – the headway made by the Programme for Infrastructure Development in Africa (PIDA), an initiative led by the African Union Commission, NEPAD and African Development Bank.

AFD’s long-standing support to NEPAD’s New Information Technologies initiatives

Since 2003, AFD has been supporting NEPAD’s activities in the telecoms sector (e-Africa Program) via an earmarked grant and the joint AFD-DBSA Project Preparation and Study Fund. These funds have cofinanced preparatory services for NEPAD’s ICT operations and have provided a residential technical assistant (on assignment since July 2009) to support the project for the UMOJANET (“umoja” means “union” in Swahili) broadband transmission virtual network.

This new financing has been delegated from the European Infrastructure Fund (EU-ITF) and follows on from an €850,000 AFD grant (allocated in 2006) to support NEPAD’s initiative to develop a continent-wide broadband transmission virtual network.

Umojanet is extending Uhurunet

The grant that has been allocated will finance the study program that results from the technical assistant’s research to finish off the design of the concept and of the UMOJANET network. The aim is to extend it to the 29 countries in North, West and Central Africa. This will complete both coverage on the continent and the UHURUNET project for Southern Africa.

This project aims to offer African operators a pan-African network of fiber-optic transmission channels. The resulting interconnection offer is required to meet criteria for comprehensiveness, guaranteed quality, open access, non-discrimination and lowest possible cost. The bid invitations will be published in February 2012.
AFD’s approach in supporting NEPAD’s activities is based on its research on promoting regional integration via the construction of major communication networks as a complement to the private sector. This strategy is in line with those adopted by other donors (World Bank, ADB, EIB, KfW, DBSA…). It previously prompted AFD to provide USD9.5m of cofinancing alongside other donors in 2007 for the Eastern African EASSy submarine cable project.

The signing of this additional financing for the implementation of the UMOJANET project should allow NPCA to present an effective implementation plan for a fiber-optic broadband network in West, Central and North Africa over the next 12 months. This will complete both coverage on the continent and the UHURUNET project for Southern Africa.

With Tunisia’s 2012 Budget to be examined by the National Assembly in just a few days, this contribution will add nearly 200 million Dinars to Tunisia’s Treasury and strengthen the Bank of Tunisia’s foreign currency reserves by 100 Million Euros.

This financial contribution is supported by active technical cooperation in several areas of key importance to Tunisia’s transition process.  The AFD, with several other financing agencies (including the European Union, the World Bank and the African Development Bank), will thus be providing support for major reforms designed to modernise the capacities of the Ministry for Employment and to reform the regulatory framework for micro-finance and capital investment.

The aim is to strengthen employment by developing training for young people and fostering enterprise creation.

In 2011, the AFD signed financing agreements for the Tunisian State amounting to more than 200 Million Euros and will be signing further agreements this year for nearly 100 Million Euros.

These agreements will support new projects designed to ensure a better equilibrium between regions and sections of society, particularly as regards drinking water supplies. Existing projects are to be adapted to these new priorities.

Finally, the AFD has proposed to accelerate the implementation schedule for existing projects, so that further financial contributions to Tunisia can be secured in important areas such as vocational training up to the level of qualified engineers, financing for businesses, micro-finance, major infrastructure and improved living conditions for Tunisia’s population.