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2016OperationalReport

AfIFAfrica

Investment

Faci l i ty

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This document has been prepared for the European Commission. However, it reflects the views only of the authors, and the European Commission cannot be held responsible for any use which may be made of the information contained therein. Neither the European Commission nor any person acting on behalf of the European Commission is responsible for the use which might be made of the following information. This report does not engage the responsibility of the Financial Institutions mentioned therein.

Luxembourg: Publications Office of the European Union, 2017

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Print ISBN 978-92-79-70574-8 ISSN 2529-6256 doi:10.2841/03388 MN-AT-17-001-EN-CPDF ISBN 978-92-79-70573-1 ISSN 2529-6264 doi:10.2841/165139 MN-AT-17-001-EN-N

1

The Africa Investment Facility (AfIF), set-up in 2015, is the newest of the EU’s regional blending facilities. The blending facilities are innovative financial instruments that use EU development grants to leverage additional funding from European and regional development financial institutions and the private sector. They help implement key infrastructure and private sector support projects that are critical to sustainable development in partner countries worldwide.

AfIF, which is funded mainly from different programmes under the European Development Fund (EDF), but also under the EU's Development Cooperation Instrument (DCI), provides various kinds of grant funding for development projects:

• Investmentgrants,tofinancespecificprojectcomponents(with,forexample,social or environmental added-value) or a percentage of the total project cost (thereby reducing the amount of debt for the partner country).

• Technicalassistance,providingtailoredsupport tomeetspecificprojectneeds, both during project preparation and implementation. This assis-tance helps ensure the quality, efficiency and long-term sustainability of a project and may address aspects related to the project-enabling environment or other aspects that are key for a project’s successful implementation.

• Risksharing instruments, suchas risk capitalandguarantees, toallowthe available funds to be used efficiently by reducing risks and unlocking additional financing.

This is the first Operational Report for AfIF. The report details the Facility’soperational activities in 2016 and provides a comprehensive overview of the 16 projects funded. In 2016, AfIF provided a total of over €288 million in contributions to important infrastructure projects across Africa. The transport sector received the lion’s share of funding, with nine projects benefitting from a combined AfIF contribution of just over €183 million, followed by the energy sector, with an AfIF contribution of €85 million to five projects. One ICT project benefitted from an AfIF contribution of over €17 million and a project in water and sanitation received a contribution of almost €3 million.

Like the other EU blending facilities, AfIF acts as a catalyst to pool resources and improve the coordination and coherence of donor actions, underpinning the policy principles of ownership, partnership and shared responsibility. The Facility contributes to leveraging the funds needed to finance capital-intensive projects in key sectors, which might otherwise be too large to finance using market instruments alone, or by development financial institutions or benefi-ciary governments on their own.

In its first year of operations, AfIF has already made an important contribution to strengthening transport, energy and communications infrastructure, holding the promise of a major contribution to sustainable and socially-equitable de-velopment in Africa.

INTRODUCTION

A f I F O P E R A T I O N A L R E P O R T 2 0 1 6

AfIFAfrica Investment

Faci l i ty

2016 O p e r a t i o n a l R e p o r t

CONTENTSINTRODUCTION 1

FOREWORD 3

AfIF Afr ica Investment Fac i l i ty 4Advancing EU Policy Goals in Africa 6

AT A GLANCE 8

HIGHLGHTS 2016 10

1. Overview 11

2. Projects 12

AfIF Supporting Africa in its Efforts to Combat Climate Change 34

AfIF Closing Remarks 36

AfIF Organisational Structure 37

AfIF / ANNEX 38

AfIF / ACRONYMS 40

A f I F

A f I F O P E R A T I O N A L R E P O R T 2 0 1 6 3

Africa is a continent of huge opportunity and potential. However, for this potential to be fully realised, a number of significant challenges need to be overcome. Poverty, unemployment and inequalities remain high, and the region is particularly vulnerable to the impacts of climate change. These challenges lie at the core of the EU’s partnership with Africa, which focuses on alleviating poverty, fostering peace and stability, consolidating democracy and good governance, and boosting economic growth and job creation. In this way, we can help to unleash the opportunities needed to achieve truly inclusive and sustainable development in Africa.

As part of our new vision for the EU's role in international cooperation and development, the European Union and its Member States signed a new European Consensus on Development in June 2017. This underlines the EU's determination play its part in implementing the internationally agreedUN2030AgendaforSustainableDevelopment.Italsoincludesacommitmenttoexploreall available means of financing, including by combining traditional development aid with other resources.

The Africa Investment Facility (AfIF) was set up in 2016, to support investment in Africa and mobilise additional funding in a broad range of sectors. In line with the priorities agreed with our partner countries, activities focused on areas such as micro, small and medium-sized enterprises (MSMEs), agriculture, infrastructure, environment, and the social sector. Like other EU blending facilities, AfIF uses EU resources as a catalyst to leverage further financing from European finance institutions, regional and multilateral development banks, and other investors.

Buildingon thesuccessof thisapproach, theEuropeanCommissionproposedanewExternalInvestment Plan (EIP) in September 2016, to encourage investment and strengthen partnerships in Africa and the EU Neighbourhood. This new Plan is an innovative approach to investment, which focuses on important socio-economic sectors, such as sustainable energy, agriculture and social infrastructure, and support to MSMEs. These are all essential ingredients for sustainable growth and inclusive jobs, which are in turn necessary to fully implement the 2030 Sustainable Development Agenda, and to improve the lives of millions of African citizens.

The EIP will focus on three pillars of intervention: mobilising investment through a new European Fund for Sustainable Development (EFSD); providing technical assistance; and pioneering policy dialogue and cooperation to improve the overall investment climate in our partner countries. Blending will be a central pillar of the EFSD, which will be made up of around €2.6 billion from thetwoRegionalInvestmentPlatformsforAfricaandtheEUNeighbourhoodanda€1.5billionguarantee on the EU budget. In this way we aim to mobilise up to €44 billion of additional investment. The adoption of the Plan by a large majority in the European Parliament in July 2017 was a major milestone. This will allow us to start the implementation of the EIP in the autumn and to present tangible progress at the AU-EU Summit at the end of the year in Abidjan.

As we look to the future, we must apply the lessons we have learned, in order to reap the maximum impact from our activities and tomake our development support as effective aspossible. By integrating the Africa Investment Platform, into which AfIF will evolve, into the EIP, we will link innovative financing with policy dialogue and technical support in view of mobilising more investments in Africa. These efforts will be critical in supporting the aims of the Africa-EU partnership,andensuringthatourdevelopmenteffortsinAfricahavethemaximumimpact,andbenefits those who need it the most.

FOREWORDA f I F

Neven MimicaEuropean Commissioner,

International Cooperation and Development

N e v e n M i m i c a

AfIFAfrica Investment Fac i l i ty

AfIF is one of the EU’s blending facilities, innovative financial instruments which combine EU grants with other public and private sector resources, such as loans, equity and other financing, for invest-ments that promote sustainable and socially-inclusive development. AfIF was created in August 2015 and started oper-ating in November of the same year.


In line with EU and partner countries’ agreed policy objectives, AfIF aims to support sustainable and inclusive growth in Africa by fostering investments that have a positive impact on socio-economic development in the region, such as infrastructure in transport, communication and energy interconnections and the promotion of renewable energy. In addition, it can support access to finance for households, micro, small and medium-sized enterprises (MSMEs), the social sector and for municipal development. It can also contribute to actions in the environmental sector, including water supply and sanitation, climate change adaptation and mitigation, agriculture, information and communication technologies as well as social infrastructure.

The final beneficiaries of the Facility are the EU’s partners in Africa either directly or indirectly, through their central, regional and local administrations or public or semi-public institutions. Other beneficiaries can include the private sector, in particular households and MSMEs.

AfIF is funded from different programmes, mainly under the European Development Fund (EDF), but also under the EU's Development Cooperation Instrument (DCI), and supports national, regional and inter-regional projects in eligiblecountriesinAfrica.ResourcesallocatedtotheAfIFamounted to €905 million for the period 2015-2016. From its launch in 2015 to the end of 2016, AfIF has contributed over €288 million in grants to projects representing a com-bined investment of over €2.3 billion.

Advancing EU Policy Goals in Africa

The EU’s most comprehensive development coop-eration partnership is with African (sub-Saharan), Caribbean and Pacific (ACP) nations. It dates back to the founding of the European Community in 1957.

Successive agreements have been revised to meet new challenges. Poverty eradication and sustainable development are at the core of the ACP-EU Cotonou Agreement (2000-2020). The main features of this partnership are development cooperation – at na-tional, regional and multi-regional levels – the pro-motionofeconomiclinksandtradeexchangesand

political cooperation. It incorporates civil society, the private sector, trade unions and local authorities. Areas for support foreseen in the Agreement include investment and private sector development, mac-roeconomic and structural reforms, and economic sector development.

The ACP-EU Council of Ministers adopted in June 2014 a Declaration on the Post-2015 Development Agenda, reaffirming the shared commitment to work together towards achieving poverty eradication and sustainable development, as outlined in the Cotonou Agreement.

A f I F


Advancing EU Policy Goals in Africa

The European Development Fund (EDF) is the main financing instrument for the 2014-2020 frame-work aimed at the implementation of the Cotonou Agreement priorities. EDF resources are implement-edinthecontextofthenational,regionalandIntra-ACP programmes.

Under the Union’s budget, the Development Cooperation Instrument (DCI) establishes the Pan-African Programme which provides dedicated support to the Africa-EU Strategic Partnership. The programme allows the EU to link up the

cooperation it has with Northern Africa, South Africa and sub-Saharan Africa.

The New European Consensus on Development calls for a focus on the economic, social and environmen-tal dimensions of sustainable development. It also underlines the links between development and other policies, including peace and security, humanitarian aid, migration, the environment and climate change.

AfIF, set up in 2015, supports operations financed by EDF and DCI resources that are relevant to the dif-ferent priorities and development objectives defined in the regional and national programmes. AfIF com-plements activities undertaken through different aid modalities and tools, including budget support ac-tions, projects and programmes implemented under central management, the ACP Investment Facility, EU-Africa Infrastructure Trust Fund (EU-AITF), the Se4AllInitiative,GEEREF,“ElectriFI”,and“AgriFI”.

By enabling joint European operations (combin-ing bilateral and EU grant funding with eligible Finance Institution operations), AfIF will generate enhanced coherence and coordination between the donors, in line with the Paris Declaration principles. The AfIF projects approved in 2016 clearly reflect these policy objectives.

As a financial instrument that is fully aligned with the general policy framework of EU-Africa cooperation, AfIF is ideally placed to build on its beginnings and continue to play a central role in delivering the EU’s development objectives in Africa into the future.

AfIF resources allocated to the 16 projects

€ 288.5 million

Financing from financial institutions to projects

€1.6 billion

Amount leveraged by AfIF support

€2.3 billion

Key AfIF figures

Total programme budget (2015-2016):

€905 million

Breakdownby sector

Transport63.5%

Water and Sanitation1%

ICT6%

Energy29.5%

Breakdown bytype of support

InvestmentGrant77%

TechnicalAssistance

23%

AfIF AT A GLANCE

Cameroon

Ghana

Togo

Benin

MaliMauritania

CentralAfricanRepublic

€17.47 million/1 project

Madagascar

€7.8 million/2 projects

Regional / Nigeria and Cameroon


Regional / Ivory Coast, Ghana, Togo, Benin and Nigeria


Regional / Guinea and Mali

€30 million/1 project

Regional / Ivory Coast and Mali


Regional / Mauritania and Senegal


Regional / Togo and Benin


Ivory Coast


Guinea


€ Total volume of AfIF contribution approved

AT A GLANCE


Senegal


Burkina Faso


Nigeria

€18 million/2 projects

Kenya


AfIF HIGHLIGHTS 2016In 2016

The first AfIF contributions were approved.

In total, over €288 million of AfIF contributions were allocated to 16 projects.

AfIF support leveraged €2.3 billion in investment (an average leverage ratio of over 1:8).

The total EU budget allocated to AfIF at the end of 2016 was €905 million.

AfIF allocated almost €183 million to nine transport projects.

Investment grants account for almost €225 million of the total AfIF contribution, while technical assistance accounts for almost €64 million.

Of the 16 contributionsin 2016

13 can be reported as climate action according to the Rio Convention on Climate Change.

Nine contributions support projects with a regional dimension.

Energy was the second most funded sector, with a combined AfIF contribution of €85 million to five projects.

The Port of Mombasa upgrade is a project of significance not only for Kenya, but for the entire East Africa region.

The Central African Republic component of the Central Africa Backbone Project will make a significant contribution to intraregional connectivity and the information society.

All the contributions have a component that aims at creating opportunities for women and young people.

A f I F O P E R A T I O N A L R E P O R T 2 0 1 6 1 1

In total, 16 AfIF projects were approved in 2016, for a total contribution of over €288 million. This contribution will leverage funding for projects involving a combined total investment of €2.3 billion, which equates to over €8 leveraged by every euro provided by the AfIF.

In terms of geographical distribution, of the 16 contribu-tions allocated to projects in 2016, nine are for regional projects, the majority of which are in the transport sector mainly in West Africa. One of these aims to upgrade the Bamako-Zantiebougou-Boundiali-San Pedro Corridor, connecting Ivory Coast and Mali. Another will finance the constructionoftheRossoBridgeacrosstheSenegalRiveron the border between Mauritania and Senegal. A third project aims to rehabilitate the Gounghin-Fada N'Gourma-Piéga-NigerBordersectionoftheCU2aCommunityRoadin Burkina Faso; a fourth concerns the rehabilitation of the Coyah-Forecariah-Farmoreah road in Guinea, towards the border with Sierra Leone; and another aims to rehabilitate the Lomé-Cotonou Highway section of the Abidjan-Lagos Corridor. Another project aims to upgrade the trans-port corridor between Bamenda (Cameroon) and Enugu (Nigeria), thus connecting two regions, while one contri-bution concerns a study for a 6-lane highway between Abidjan and Lagos.

One regional project in 2016 was supported in the energy sector. It concerns the construction of a 920-km electricity interconnector between Guinea and Mali. Another one concerns the Central African Republic Component of theCentral Africa Backbone, the aim of which is to provide broadband access in Central Africa by installing optical fibre links between countries in the region.

Country-specific projects are mainly in the energy sector, with four projects supported in 2016. One of these involves the construction of 287 km of electricity lines in an effort to modernise energy infrastructure in Senegal. Another aims to improve the human resource base for the energy sector in Nigeria by enhancing vocational training. Also in Nigeria, the SUNREFprojectaimstoimproveenergysupplyinthecountryby scaling up private investment in renewable energy and energy efficiency. A further project concerns the production and distribution of renewable energy in Ivory Coast.

The other three national projects supported in 2016 con-cern the upgrade of the Port of Mombasa in Kenya, a ring road around Antananarivo, the capital of Madagascar, and the definition of investment priorities for the upgrade of waste water infrastructure in Antananarivo.

In terms of sectoral distribution, the transport sector accounts for a combined AfIF contribution of over €183 million in 2016 (63% of the total 2016 AfIF contribution), which will leverage total investment of over €1.3 billion. The five energy projects received a combined AfIF contribution of more than €85 mil-lion, to leverage almost €802 million. The ICT project bene-fitted from around €17.5 million from AfIF, towards a total investment of almost €148 million, while the project in the waterandsanitationsectorwasallocatedapproximately€2.8million, towards a total project cost of €34 million.

Concerning the type of support provided by AfIF in 2016, investment grants amounted to €222.5 million (77% of the total AfIF contribution in 2016), while €66 million took the form of technical assistance (accounting for the remaining 23% of the total AfIF contribution in 2016).

1 . OVERVIEW

2 . PROJECTS


TheMalagasycapitalisexperiencingsignificantpopulationgrowth. With growing numbers of residents and a vibrant urban hub, its infrastructure, from roads to public transport, is an essential ingredient to encourage economic growth and prosperity.

The Antananarivo Integrated Drainage and Sanitation Programme will prepare a Drainage and Waste Water Master Plan, to define medium and long term investment

priorities for the sector. In addition, it will help to finance a number of studies focused on institutional issues to im-prove the sustainability of future investments. Modelling of the drainage network will also be carried out, to improve the resilience of the urban area to flood risk and climate change.

The project aims to improve the health and living conditions of the people of Antananarivo and to limit flooding in the city. Other goals include enhancing the operation of drainage and sanitation networks in the capital and strengthening governance of the sector.

The funding provided under the project will be used to pur-chase equipment and conduct the work needed to rehabili-tate the city’s drainage and waste water networks, including protection measures against flooding. To maximise thehealth benefits for the local population, part of the funding will be devoted, through NGOs that are active in sanitation, to involve local populations in hygiene programmes.

The project will have an important social impact in low-lying areas of the city. Drainage in Antananarivo will improve, reducing flooding, which will have a positive economic impact by reducing flood damage, making it possible to improve transport infrastructure and create an enabling environment for local MSMEs. The impact on public health and quality of life for the population will also be positive. The project will also enhance the investment climate in the water and sanitation sector, paving the way for more projects in the future.

The AfIF contribution will focus on providing crucial technical assistance to ensure the overall efficiency of the services and the improvement of the sector framework.

WAT E R A N D S A N I TAT I O N Antananarivo Integrated Drainage and Sanitation Programme

M A D A G A S C A R

Total budget: €34 million

AfIF contribution: €2.815 million

Lead finance institution: AFD (€25 million)

Co-financiers:

Government of Madagascar (€6.185 million)

Type of AfIF support: Investment Grant

(€0.5 million) and Technical Assistance (€2.315 million)

Initiated in 2007, the Central Africa Backbone (CAB) project aims to install terrestrial optical fibre links that interconnect the countries in the Central Africa region. Each country in the region should implement cross-border interconnection links (as well as missing links in its territory) with at least two neighbouring countries, as recommended by the Programme for Infrastructure Development in Africa (PIDA) and the commitment made by the Heads of State of the Central African Economic and Monetary Community (CEMAC) member countries.

The CAB project is implemented through three inter-connected national components: CAB Cameroon, CAB Congo and CABCentral African Republic. By providingbroadband access from the landing points of submarine cables, the project will significantly facilitate broadband access and the development of an information society in the countries involved.

I C TCentral Africa Backbone Project – Central African Republic Component

C E N T R A L A F R I C A N R E P U B L I C

Total budget: €147.91 million


Lead finance institution: AfDB (€101.48 million)

Co-financiers: Global Environment Facility

(€7.02 million), Governments of Cameroon and

Congo (€21.94 million)




A landlocked country in the heart of Africa, the Central African Republic is the only country in the region not tohave a fibre optic link. As a result the internet penetration rateinthecountryisextremelylow,atonly4%.Therefore,investment in ICT services has been identified as critical to unleash the untapped potential of a more digitalised society for the rapid economic development of the country.

The AfIF support to the CAB project will contribute to the implementationoftheCentralAfricanRepubliccomponent,in order to quickly attain the global project objectives. Optical fibre links will contribute to reducing the cost to business of accessing high-quality telecommunications services in the country.

Beyond the 900 km of optical fibres to be laid (inter-connecting Central African Republic with Cameroon andCongo),20DigitalCommunityCentresareexpectedtobebuilt, providing 1,000 young people with employment. A

training programme, which will initiate 8,000 women in the use of ICT tools, is also part of the project.

The economic impact of the project will also be felt in the agricultural sector. Part of the project involves the introduction of a Market and Climate Information System (MCIS). Through the MCIS, agricultural cooperatives and private businesses in rural or remote areas can boost productivity by accessing the prices of agricultural products and livestock, as well as weather forecasts, through connected community centres.

Overall, the project will have a positive impact on socio-economic development and empowerment of the local population, especially women and youth. The use of ICT-enabled public service delivery will have a positive impact on education and healthcare, and will also be an effective means of promoting job creation and entrepreneurship.

In the Ivory Coast National Development Plan for 2016-2020, the country has set itself a target of raising the national electrification coverage rate from 48% in 2016 to 64% in 2018 and 77% in 2020. By strengthening the distribution network, it is planned to improve the quality of the electricity service and reduce cut-off time and technical losses, which should also improve the underlying economic fundamentals of the electricity sector.

This project is part of a larger investment programme and comprises three components. The first is a rural electrifica-tion component that provides for the electrification of 354 rural communities with almost 400,000 inhabitants. The majority of the residents in the project areas live below the poverty line.

Thesecondcomponentaimstostrengthenandextendtheurban and peri-urban distribution network in 12 regional capitals. This will allow the connection of new residential areas and help adapt the existing network to deal withgrowth in demand for electricity.

The third component involves the rehabilitation of the 165 MW Buyo Hydroelectric Plant, which will help reduce green-house gas emissions.

The project’s objectives are fully aligned with the Ivory Coast'sNationalRuralElectrificationProgramme,whichaimsto electrify all localities with more than 500 inhabitants. The project also supports the government’s Electricity for All Programme, which aims to finance one million connections by2020,withamixofgrants,repayableconcessionalloans,and commercial non-concessional bank loans.

The AfIF contribution will finance the electrification of 154 rural communities in central Ivory Coast, out of the total 354 communities identified for the rural electrification component.

E N E R g y Sovereign loan to Ivory Coast for renewable electricity access, production and distribution

I V O R Y C O A S T


AfIF contribution: €24 million

Lead finance institution: AFD (€105.2 million)



Ruralelectrificationhasbeen identifiedasanessentialprerequisite for economic growth in Senegal, as it is required to fuel the development of the agricultural sector. Senegal enjoys high levels of urban electrification; ensuring rural access to similarly reliable and stable electricity supplies will promote rural integration into the national economy. The Energy Sector Development

Policy adopted by the Senegalese government in 2012 set a target for rural electrification of 50% by 2017, which has since been raised to 60%.

The Senegal Electricity Modernisation Programme will play a major role in achieving these targets. It will sup-port two pillars of the government’s overall plan for the rehabilitation of the electricity sector: upgrading of trans-mission and distribution networks and the operational restructuring of Société Nationale d’Electricité du Sénégal (SENELEC).

The upgrade and modernisation of the electricity transmission and distribution networks comprises the densification and extension of the electricity network,the inter-connection of currently isolated networks, and the modernisation of crucial distribution equipment and facilities. The Programme also involves the installation of 450,000 pre-paid meters, 30,000 advanced meters for large electricity consumers, and the setting up of a modern customer relationship management system.

The AfIF contribution will be dedicated to rural electrifi-cation, contributing to the electrification of an additional 150 remote villages, with about 55,000 inhabitants lo-cated close to the newly built lines.

This rural electrification will result in significant improve-ments in terms of agricultural development in the region of Casamance, opening up the possibility for food processing and manufacturing. More generally, the Programme will contribute to job creation and to the stabilisation of the jobs created, by reducing seasonality.

E N E R g y Senegal Electricity Modernisation

S E N E G A L



Lead finance institution: EIB (€75 million)

Co-financiers: World Bank (€65.92 million),

Government of Senegal (€3.37 million),

Other financiers (€1.61 million)


SUNREFWestAfricaIIisatailor-madeprogrammethat aims at financing small and medium green investments in Ghana and Nigeria, with a view to creating a demonstrative effect on the market. It is anextension,forEnglish-speakingcountries,oftheSUNREFWestAfrica Iproject, co-financedbyEU-AITF, which is ongoing since 2014 in Senegal, Ivory Coast, Togo, Benin and Burkina Faso.

TheobjectiveofSUNREFWestAfricaIIistosupportnational priorities in the energy and environmental fields and scale-up much-needed private invest-ments though:

• A facility to enhance private sector access to available financing at lower interest rates and more appropriate maturities.

• Technical assistance to facilitate the origina-tion of viable and bankable projects, provide technical and financial support at critical stages of project development and increase theknowledgeandtheexpertiseofthemainstakeholders (sponsors, banks, consultants, equipment providers).

AFD will provide long term loans to Partner Finance Institutions (PFIs) at concessional rates and the

E N E R g y SUNREF Nigeria

N I G E R I A



(in addition to an EU-AITF support to SUNREF West

Africa II, with €4 million dedicated to Nigeria)

Lead finance institution:

AFD (€100 million)

Co-financiers:

Project developers (€20 million)



T h e B r o a d e r C o n t e x tIn coordination with local public policies, since 2007 AFD has put in place targeted support to develop innovative green investments through environmental credit lines for local financialinstitutions.Thissupport,calledSUNREF(SustainableUseofNaturalResourcesandEnergyFinancing)includesbothtechnical assistance (TA) and credit lines (i.e. loans) to local financial institutions for them to finance small and medium-sized projects implemented by public and private entities. ThebenefitsoftheSUNREFprogrammeinclude:• Enforcing public policies towards entrepreneurs that

AFD cannot reach directly because of their size (small companies such as MSMEs and even individuals).

• Using financial intermediaries as channels for disseminating these types of projects through reliable local counterparts with technical skills.

• Disseminating technical know-how and good practices through the TA.

From 2007 to the end of 2014, AFD has committed more than €2 billion through green credit line programmes with 35 financial institutions to finance green projects in developing and emerging countries. AFD has been a pioneer in Africa in financing green projects through credit lines to local financial institutions.SUNREFWestAfricaIstartedsuccessfullyinSeptember 2014 and covers five countries: Senegal, Ivory Coast, Benin, Burkina Faso and Togo. The programme is co-financed by AFD (€30 million), the Fond Français pour l’Environnement Mondial - FFEM (€1.5 million) and EU-AITF (€6 million). It is composed of concessional credit lines, a regional TA programme, and an investment grant scheme.Taking into account African economic growth and its potential negative impacts in terms of energy and raw material consumption and pollution, AFD intends to further focus in the nextfewyearsonSub-SaharanAfricaforthedevelopmentofgreen credit lines, in line with the objectives of the European Union’s Sustainable Energy for All initiative and post 2015 objectives. The purpose is to engage the private sector to contribute towards successfully achieving energy efficiency and renewable energy policy goals in Africa.

PFIsareexpected toon-lend tosub-borrowersatconcessional rates, to finance energy efficiency and renewable energy investments in industry, SMEs, agribusiness, commercial services and the residen-tial sector in Nigeria and Ghana.

Along with the credit facility, the programme aims at developing financial intermediaries’ capacity and appetite in these fields as well as providing support to investors.

The AfIF contribution will be dedicated to reducing the cost of loan repayment for the final beneficia-ries and to encouraging the beneficiaries and the banks to change their vision and practices in order to finance energy efficiency and renewable energy projects in a sustainable manner.

In 2015 and 2016 the macroeconomic environ-ment was greatly affected by the decline in oil price, hence the project implementation has been delayed since the crisis was affecting local banking sectors. Achievementofexpectedresultsisthereforecon-ditioned by a swift economic recovery, however Nigeria is now showing signs of recovery and the banking sector seems keen to participate again in the financing of the economy and diversification in green investments in Nigeria.

Nigeria's economic activities and growing population are putting increasing demand on the country’s electrical grids. The country has an installed power generation capacity of about 8.5 GW and actual generation available on the grid of4.5GW.Highlytrainedstaffandfieldexpertsareneededto help satisfy the country's growing demand for electricity.

To ensure an enabling environment for private investors and to provide a steady stream of qualified replacements fortechnicalstaffexitingtheworkforce,in2009Nigeria’sFederal Ministry of Power set up the National Power Training Institute of Nigeria (NAPTIN). NAPTIN provides state-of-the-art training and capacity building programmes in partnership with national and international stakeholders.

This project aims to support NAPTIN by developing training curricula adapted to market needs and also to train local trainers. It also aims to reinforce NAPTIN’s

attractiveness by building new technical infrastructure and acquiring equipment for a network of eight regional training centres and the institute’s headquarters in Abuja. In this way, the project will not only strengthen NAPTIN’s capacity to design and implement vocational training but it will also contribute to reforming the institute’s policies and procedures, helping to transform it into a more business oriented institution.

By improving human resource skills in electricity companies, the project will promote the financial, economic and technical performance of operators and, consequently, their ability to provide reliable electricity. The resulting improved access to energy, upgraded quality standards and increase in electricity generation, transmission and distribution will, in turn, have a direct impact on the productivity of enterprises, especially SMEs, the diversification of the economy and on national economic development. Through these interventions, the project will contribute to the success of power sector reform in Nigeria, a key ingredient in Nigeria's future.

The AfIF contribution will finance much needed technical assistance, contributing to the development and setting up of training assets and new procedures and policies for NAPTIN. This technical assistance is essential to transform NAPTIN's long-term vision and structure.

E N E R g y Enhancing Vocational Training delivery for the power sector in Nigeria

N I G E R I A



Lead finance institution: AFD (€42.7 million)

Type of AfIF support: Technical Assistance


Located in the heart of West Africa, Mali and Guinea lie in a region with growing demand for rural and urban electrification. The two countries also lie between two regional power grids: a grid connecting Mali, Senegal and Mauritania and another connecting Ivory Coast, Liberia, Sierra Leone and Guinea.

The Guinea-Mali interconnector is a 920-km power line from the Nzérékoré substation in Guinea to the Sanankoroba substation in Mali. The power line is the missing link to a network which will connect seven West African countries, thus creating a major regional elec-tricity market through the gradual integration of isolated national networks into a unified system. This will provide significant cost reductions and improved synergies.

The various localities crossed by the line will be connected tothegridandwillbenefitfromlightingfixtures.Thecostof connecting interested households will be included in the project costs, ensuringmaximumbeneficial impactfor the local population. Women and young people are expectedtobenefitinparticular,asaresultofincreasedopportunities for economic activities in trade and crafts.

The project also includes a rural electrification component targeting localities in a 20-km wide corridor along the interconnector. These communities are home to more than 1,000 inhabitants each. A total of 80 localities are affected in Mali and 121 in Guinea, bringing the population of the electrified rural area to more than 200,000 beneficiaries.

The AfIF contribution will help finance the rural electrifica-tion component as well as providing technical assistance to ensure efficient and effective implementation of the project.

E N E R g yElectrical Network Interconnection in Guinea and Mali

G U I N E A A N D M A L I



Lead finance institution: AfDB (€ 70 million)

Co-financiers: WABD (€23 million), IDB (€53 million),

EBID (€48.5 million), AFD (€35 million), others (€51.7

million), Government of Guinea (€14.2 million), Govern-

ment of Mali (€3.6 million)


(€18.86 million) and Technical Assistance

(€11.14 million)

T R A N S p O RTCoyah-Forecariah-Farmoreah Road Rehabilitation Project

G U I N E A



Lead finance institution: AfDB (€ 44.79 million)

Co-financiers: Government of Guinea (€710,000)


(€24.73 million) Technical Assistance (€4.87 million)

The Dakar-Lagos Trans-African coastal corridor connects a number of economic hubs in West Africa. It also con-nects these hubs to poorer areas, providing them with vital access to important trade routes.

The project consists of the rehabilitation of the Coyah-Forecariah-Farmoreah road in Guinea, a 75-km section of the Dakar-Lagos corridor, and will provide the missing link between Guinea and Sierra Leone on this corridor. It will complement projects already undertaken by the European Union, which has contributed to financing the construction of road sections on the Sierra Leone coast.

The project’s overarching aim is to reinforce regional inte-gration and promote intra-regional trade in the Economic Community of West African States (ECOWAS) zone. Specifically, the project aims to strengthen Guinea's com-petitiveness, particularly in its trade relations with Sierra Leone, to facilitate the mobility of people and goods, and to allow better access to social facilities.

The project will also help to address the critical need to open agricultural and mining production areas in both Guinea and Sierra Leone and contribute to reducing poverty and improving the competitiveness and diversification of their economies.

The project is expected to reduce travel times along thesection by 66%, and add 50 km of rural access roads to ensure the local population is given higher mobility. Four multifunctional platforms for women in the region will also be financed as part of the project.

The AfIF contribution will provide funding for the multifunc-tional platforms, as well as for crucial technical assistance for project oversight and control.


The Port of Mombasa plays a vital role in the transport network of East Africa, serving a region with a population of over 250 million people and handling traffic to Kenya, South Sudan, Uganda, Rwanda, Burundi, DemocraticRepublicofCongo(DRC)andTanzania.Thevastmajorityoffoodstuffs, raw materials, vehicles, and iron/steel that are importedorexportedintheregionarehandledthroughthePort of Mombasa. The port is also the UN’s major supply gateway to East Africa, supporting major peacekeeping and humanitarian operations in the region.

ThePortofMombasahasexperiencedmajortrafficgrowth,averaging 10% annually over the past ten years. As traffic demand continues to soar (particularly for container freight), the port’s facilities are not large enough, nor sufficiently specialised to efficiently handle the increase. Consequently,

extensivemeasuresareneeded to improve theefficiencyof the existing infrastructure in order to accommodatethe growth that has already taken place, in addition to the 5%-6% increase in annual trafficexpectedover thenextfew years.

The project consists of the comprehensive rehabilitation and upgrade of a number of existing quays, and a landreclamation component that aims to increase the port’s storage capacity. After completion, the facilities will be used for both containers and general heavy cargo handling. The project also includes a capacity building and environmental management component targeted at the Kenya Ports Authority.

Capacity and efficiency are the two main factors influencing transit time at the port. Time savings translate into cost reductions to be passed on, in various degrees, to consum-ersandexporters,makinggoodslessexpensiveandbusi-nesses more competitive. This also supports private sector development,includingSMEs.Reducingthetimeneededforgoods to transit the port contributes directly to the goal of reducing transport and trade-related costs, especially along the Northern Corridor.

The economic benefit will then filter down into the region, increasing trade opportunities, market accessibility, and private sector competitiveness, in turn sustaining regional integration and development, ultimately contributing to poverty reduction.

Finally, the project is also aligned with sustainable trans-port objectives by reducing congestion and transport times along freight routes and, consequently, by reducing green-house gas emissions and increasing the safety and security of the port’s facilities.

Support from AfIF will complement EIB and AFD loans pro-viding crucial funding that will strengthen the governance and financial capacities of the Kenya Ports Authority, en-suring the long-term sustainability of the project.

T R A N S p O RT Port of Mombasa Berths Upgrade and Rehabilitation

K E N Y A



Lead finance institution: EIB (€76.74 million)

Co-financiers: AFD (€76.74 million)



T R A N S p O RT Project to Rehabilitate the Gounghin- Fada N'Gourma-Piéga-Niger Border Section of the CU2a Corridor

B U R K I N A F A S O



Lead finance institution: AfDB (€104 million)

Co-financiers: JICA (€40 million), West African

Economic and Monetary Union (€2 million),

Government of Burkina Faso (€3.5 million)


(€20 million) and Technical Assistance (€8 million)

The CU2a corridor forms part of the West African Economic and Monetary Union’s (WAEMU) road network and is a major trade route for the region. Providing transport connections through Benin, Burkina Faso, Guinea-Bissau, Ivory Coast, Mali, Niger, Senegal and Togo, the network is critical for intra-regional integration.

The average daily traffic on the road in 2015 was 1,310 vehicles, of which 50% were trucks. This is expected toincrease to 1,570 vehicles per day by 2020, with the same proportion of heavy goods vehicles. As traffic increases, maintainingexcellentroadconditionsandexpandingruralaccess to this major route is necessary to sustain economic growth.

This project involves the rehabilitation of the Gounghin-Fada N'Gourma-Piéga-Niger border section of national road No. 4 on the CU2a corridor, a 218-km section of road in need of maintenance. It also includes the construction of 83 km of rural roads which will connect local villages and farms to the trading route.


The project is important in terms of the opportunities it offers for economic growth for the entire region. The rehabilitation of the road section will provide Burkina Faso, Niger and Mali with easier access to the ports of Lomé in Togo and CotonouinBenin,improvingtheiraccesstoexportmarkets.TheprojectisexpectedtoreducetraveltimesbetweenNigerand Burkina Faso by over 33%, with a simultaneous increase in the volume of traffic crossing the border.

The project will have a significant impact on mobility in the region. The 300 km of new and improved roads will increase road access and mobility for 2.5 million people. As part of the project, ten multifunctional platforms will be built in the Fada N'Gourma area, providing local women with crucial services.

The project will improve transport efficiency, thereby gen-erating an enabling environment for trade and local entre-preneurs. This will have a knock-on positive impact on the living conditions of people directly in the project interven-tion area and in the region as a whole.

T R A N S p O RT Project to Rehabilitate the Lomé-Cotonou Highway and Facilitate Transport on the Abidjan-Lagos Corridor, Phase 2; and to Protect the Togolese Coast from Erosion

T O G O A N D B E N I N




Co-financiers: EIB (€50 million), Global Environment

Facility (€5.47 million), WADB / EBID /IDB (€38.1 million),

West African Economic and Monetary Union (€0.61 mil-

lion), Government of Togo (€2.26 million)

Type of AfIF support: Investment Grant (€11.27 million)

and Technical Assistance (€8.73 million)


The Abidjan-Lagos corridor is a major road that connects five West African countries: Benin, Ghana, Ivory Coast, Nigeria and Togo. Stretching over 1,000 kilometres, this corridor connects several state capitals, not to mention some of largest and economically most important cities in the entire continent. Providing landlocked countries with access to ports in the region, it is the major lifeline of West African trade.

This project consists mainly of the rehabilitation and wid-ening of the Avépozo-Aného section of the Lomé-Cotonou highway, part of the larger corridor. The project also fore-sees the development of coastal erosion protection struc-tures in Togo, which faces serious coastal erosion prob-lems and has seen the coastline to the east of the port of Lomé receding by 15 to 20 meters per year. This is having a major environmental impact, as well as socio-econom-ic effects on coastal communities in the area. In Benin, support will mainly cover the development of three road studies, asphalting of the Adjaha-Athiémé road, and the construction of sidewalks on the Cotonou-Ouidah road.

The AfIF contribution will cover activities aimed at strengthening the inclusive aspect of the project and

enabling the implementation of income-generating activities for vulnerable coastal populations, particularly those currently involved in the extraction of coastalsands and gravels. It will also cover institutional support to the project implementation agencies.

As a result of the project, 30 km of dual carriageway will be built. Over 10 km of eroded coastline will be salvaged, creating the necessary conditions to sustain traffic capacity. The reduction in travel times along this section ofthecorridorisexpectedtobeapproximately25%.Aspart of the investment, five multifunctional centres and platforms will be built in the area, specifically targeting the socio-economic development of women and youth.

The project will have an economic impact that stretches well beyond the creation of jobs in road and infrastructure construction. Improved market access will reduce poverty in the region by providing job opportunities and better delivery of social services. Safety will also improve on the highway as a result of the project, leading to a reduced number of accidents. Finally, better infrastructure and reduced transport costs will also create conditions conducive to foreign invest-ment, with related benefits in terms of employment.

T h e B r o a d e r C o n t e x tThe Abidjan-Lagos corridor runs along the coast of the Gulf of Guinea and passes through the most densely populated cities of the region. An estimated 75% of economic activity in this sub-region takes places along this corridor. The corridor is a priority of the African Union's African Infrastructure Development Program (PIDA) and the EconomicCommunityofWestAfricanStates(ECOWAS)RegionalTransportFacilitationProgram.The overall goal of PIDA is to promote socio-economic development and poverty reduction in the African continent by providing the local population with improved access to integrated regional and continental infrastructure networks and services. Focusing on trans-border, regional and continental projects in sectors such as transport, energy and ICT, it is a key programme in the strategic framework for the socio-economic development of Africa.

As the capital and largest city on the island-nation of Madagascar, Antananarivo and its larger urban area repre-sent the political and economic heart of Madagascar. Urban population growth has created the need for improved in-frastructure to sustain economic growth and urban trade.

As part of a larger transport development plan aimed at developing national and urban infrastructure, this project entails the construction of an urban ring road in the north and north-east of Antananarivo. The objective is to improve transport conditions in the greater Antananarivo metropolitan area and upgrade links to the city’s economic

hubs. The ring road project complements road infrastructure work already being undertaken by the city.

This circumferential route will provide the city's inhab-itants with internal transport along southern, eastern and northern connections, while simultaneously contrib-uting to the reduction of transit traffic from urban roads. Regionalintegrationisalsoconsideredintheproject.

Inter-city transport will be streamlined, as the project will address traffic flows from the port of Tamatave in the eastern part of the country to the capital, an essen-tial route which connects Antananarivo to international naval commerce.

The project design covers all the necessary crossroads and pathways for pedestrians and persons with reduced mobil-ity. The project also includes an environmental and social management component. The necessary control of hydrau-lic systems in the Ambatobe Valley and urban planning in the vicinity of the new road are also taken into account.

Smoother transport connections from the urban periph-ery to the city-centre will provide significant economic stimulus to both areas. Strategic urban planning will reduce travel times and facilitate trade both inside and outside the capital.

With expected traffic to be as high as 25,000 vehiclesper day, these 8 km of new and improved roads in one of Madagascar's major traffic arteries will create an en-abling environment for a more dynamic economic hub.

The AfIF contribution will mainly finance the service contract for the supervision and control of the works.

T R A N S p O RTRing Road in Antananarivo

M A D A G A S C A R



Lead finance institution: AFD (€24 million)

Co-financiers: EIB (€28 million), Government of

Madagascar (€6 million)



T R A N S p O RTRoad Improvement and Transport Facilitation Project on the Bamako- Zantiebougou-Boundiali-San Pedro Corridor

I VO RY C O A S T A N D M A L I




Co-financiers: West African Economic and Monetary Union

(€2.94 million), national contributions (€1.94 million)

Type of AfIF support: Investment Grant (€26.82 million)

and Technical Assistance (€1.18 million)

The Bamako-San Pedro corridor between Mali and Ivory Coast provides an alternative route to open up access from landlocked countries in the hinterland to the Gulf of Guinea and its international ports. As traffic along this vital route grows, maintenance and improved mobility are essential to guarantee the steady movement of people and goods in the region.

This project will connect Mali as well as the northern part of neighbouring Guinea to San Pedro in Ivory Coast, making it an important transit port for the region. In light of its strategic importance, the road is included in the priority programmes of the West African Economic and Monetary Union (WAEMU) and the Economic Community of West African States (ECOWAS).

The project consists of improvement and maintenance work on 140 km of the corridor in Mali and 135 km in Ivory Coast.Theworksareexpectedtoreducetraveltimesby70% and significantly lower the cost of transportation between Mali and the port of San Pedro. This will result in increased opportunities for economic development and trade, both between Mali and Ivory Coast and for communities living along the route.

As part of the project's effort to deal with issues of gender, part of the funding will go to the construction of 14 multifunctional platforms and centres for the area's women, providing them with the training and equipment needed to improve their socio-economic conditions.

The project will directly or indirectly benefit all users of the corridor and, in particular, those involved in agricultural production and in importing consumer products. The new roads will provide improved rural road access to 60% of the local population. With large areas of land unused due to lack of access to efficient transport links, the project will help the area develop its untapped economic potential, thereby making a significant contribution to poverty reduction in the region.

The AfIF contribution will amplify the project's impacts, in particular with regard to related infrastructures, transport facilitation measures and activities designed to strengthen the inclusive aspect of the project.

The Senegal River creates a natural border betweenMauritania and Senegal, stretching from its source and splitting the two countries from their eastern-most frontier to the Atlantic Ocean. This border is traversed by the Nouakchott-Dakar corridor, which runs along the Atlantic coasts of the two nations, connecting their capital cities. Part of the transport corridor between Tangiers and Lagos, this corridor is a section of one the major continental routes in Africa.

The main element of this project is the construction of the Rosso Bridge border-crossing on the Senegal River.This bridge will provide the crucial missing link on the increasingly important Nouakchott-Dakar corridor. The projectwillconnectthetwobanksoftheSenegalRiverand,in so doing, create an efficient border crossing for traffic on this important road.

Growing traffic volumes along the route have placed significantplanningpressureonthetwin-citiesofRosso-MauritaniaandRosso-Senegal,whichfindthemselvesonamajor transport route without a paved border crossing. The constructionofthe1.5kmbridgeisexpectedtoincreasethe traffic capacity of the border by 262% as well as reduce travel time over the river by 80%. The construction of 9 km of access roads to the bridge will ease traffic flow in the two border cities, particularly in the areas congested by ferry traffic.

The overall objective of the project is to improve the level of service on the Nouakchott-Dakar corridor, with a view to increasing trade, particularly between Mauritania and Senegal.Reducinglocaltransportcostswillresultinlowerconsumer prices for agricultural products and increased market accessibility, as well as business development and trade opportunities at both regional and international levels. Communities living along the route stand to benefit from improved access to basic services, as the project includes funding for the creation of 26 health, educational and training facilities.

The AfIF contribution will finance non-bankable compo-nents of the project, such as transport facilitation, transit measures and ancillary works, including those designed to strengthen the inclusive aspect of the project.

T R A N S p O RT Rosso Bridge Construction Project

M A U R I T A N I A A N D S E N E G A L



Lead finance institution: AfDB (€40 million)

Co-financiers: EIB (€26 million), Governments of

Mauritania and Senegal (€4 million)

Type of AfIF support: Investment Grant (€18 million)

and Technical Assistance (€2 million)


The 1,028-km Abidjan-Lagos Corridor links the major eco-nomic centres in the five countries it traverses: Ivory Coast, Ghana, Togo, Benin and Nigeria. It interconnects with a rail network, major international ports along the gulf of Guinea, and airports. It also crosses several corridors running on anorth-southaxis,providinglandlockedcountriessuchasBurkina Faso, Mali, Niger and Chad with vital access to in-ternational trade routes. The corridor is directly involved in 75% of trade in the sub-region, making it central to West Africa's commercial life. It is therefore a critical piece of infrastructure, underpinning the socio-economic develop-ment of the countries it links.

Growing population, intra-regional trade and greater internal mobility are all factors contributing to a significant growth in traffic along the route. In February 2013, the presidents of the five countries in question agreed to work towards theexpansionofexistingroadsandtheconstructionofasix-lane highway (three-lane dual carriageway) from theeconomic centre of Ivory Coast, Abidjan, to its Nigerian counterpart, Lagos. The five countries signed a treaty outlining the framework upon which the corridor would be designed, studied, implemented and operated.

The objective of the Abidjan-Lagos Corridor Highway Study is to undertake all the necessary research on the hard and soft aspects required for the effective implementation, operation, and economic development of the corridor. The study will be based on the principle that the highway shall primarily follow anewalignment,incorporatingsectionsoftheexistingalign-ment, where necessary, to ensure route optimisation.

The comprehensive study will include key elements such as engineering, financial, economic and environmental analy-ses of the project and a detailed engineering design of the road. Analysis will also be conducted on an implementable public-private partnership (PPP) investment scheme. An assessment will also be carried out of the physical, tech-nical, policy, economic and market aspects of the corridor, in order to develop a realistic masterplan, development framework and delivery strategy for the highway.

The study will involve consultations with a broad spectrum of society, beyond traditional stakeholders. These will include development partners, local communities, civil society, farmers, industrialists, market traders, enterprises, border and customs agencies, transport and logistics operators, and regional entities such as the West African Economic and Monetary Union (WAEMU).

T R A N S p O RTStudy for the Abidjan-Lagos Corridor Highway Development Project

R E G I O N A L




Co-financiers: Economic Community of West African

States (€0.2 million)


T R A N S p O RT Transport Facilitation Programme on the Bamenda-Enugu Corridor - Cross River Border Bridge

N I G E R I A A N D C A M E R O O N



Lead finance institution:

AfDB (€259.25 million)

Co-financiers: IDA/World Bank (€23.5 million), JICA

(€34.5 million), Government of Cameroon (€30.63 million),

Government of Nigeria (€18 million), Economic Community

of West African States (€1.01 million)



Intraregional trade is becoming ever more important in Africa. To ensure growth in this vital element of local economies, the continent as a whole is acting to lower logistical barriers to the movement of goods and people between neighbouring countries, in an effort to facilitate regional integration.

TheBamenda-EnuguCorridorandCrossRiverBorderBridge project is part of a larger programme comprised of several transport and transit facilitation projects that aim to upgrade inter-state roads and streamline traf-fic. The overarching objective is to promote increased exchangesandclosercooperationbetweencountriesinthe Central African Economic and Monetary Community (CEMAC) zone and those in the Economic Community of West African States (ECOWAS). This project is specifi-cally targeting trade between Cameroon and Nigeria.

The project consists of the development of 445 km of road between Bamenda (Cameroon) and Enugu (Nigeria) of which 240 km are in Nigeria and 205 km in Cameroon. Transport facilitation measures include a single border control post for the two countries, a dou-ble-lane bridge between Cameroon (Ekok) and Nigeria (Mfum) to replace an existing one-way bridge, and

preparation work along the corridor for the subsequent laying of optical fibre.

Localcommunitieswillbenefitfromauxiliary infra-structure provided under the project, such as rural roads, market warehouses, classrooms, women and youth centres, drinking water points, small agricul-tural processing facilities and transport equipment. The project will create job opportunities, with an expected 2,500 permanent jobs resulting frompost-construction work. Moreover, the improved transport infrastructure will generate new employ-ment opportunities in services.

The project will contribute to the opening of production areas in both countries and to increased trade. It will also help improve the competitiveness and diversification of the economies of Cameroon and Nigeria, thereby contributing to poverty reduction.

The EU contribution will fill the funding gap in the financing of the bridge, amplifying the positive impact of the bridge through the foreseen interventions in Ekok, and increasing the overall concessionality of the project.

Supporting Africa in its Efforts to Combat Climate Change

Sub-Saharan Africa is one of the most vulnerable regions in the world to the impacts of climate change, which is affecting food production, water supply, health and livelihoods on the continent. Therefore, investments addressing the climate resilience and adaption of infrastructure in these sectors are a priority for Africa.

At the 21st Session of the Conference of Parties to the United Nations Framework Convention on Climate Change (COP21) in Paris in December 2015, countries pledged to strengthen the global response to the threat of climate change, in the context ofsustainable development and efforts to eradicate poverty, including by making finance flows consistent with a pathway towards low greenhouse gas emis-sions and climate-resilient development. The EU and it partners built a broad coalition of developed and developing countries in favour of the highest level of ambition. A Communication from the European Commission was issued in March 2016 following the Paris Agreement.

In its Communication on A renewed partnership with the countries of Africa, the Caribbean and the Pacific, published in November 2016, the European Commission recognises that sustainable development and human well-being depend on healthy ecosystems and a functioning environment. Furthermore, it warns that climate change and en-vironmental degradation are threatening to derail economic progress, jeopardise peace and stability and cause large-scale migration.

In this framework, climate action is a central focus of the blending mechanism, with the majority of projects having climate adaptation or mitigation measures as their principal or significant objective. With their Climate Change Windows (CCWs) aimed

at supporting the implementation of projects helping partner countries tackle climate change through mitigation and/or adaptation measures, AfIF and the other EU regional blending mechanisms help mainstream the fight against climate change. These windows have been created in all regional blending facilities in order to enable tracking of all climate change related projects supported. Their main purpose is to promote additional investments and provide visibility to projects which have climate change as their principal objective. Those can target either mitigation or adaptation, or both, and should contribute to the objective of stabilising greenhouse gas concentrations in the atmosphere.

In establishing Climate Change Windows in the EU regional blending facilities, the main aims are to:

1. Establish a tracking system for climate change related operations;

2. Ensure transparency of EU financing of climate change projects, including by making a distinction between programmed funds within geographical instruments and new, additional resources;

3. Guarantee better tracking and EU visibility for all its climate actions;

4. Mainstream the fight against climate change in projects (co)financed by the EU;

5. Attract additional financing for climate change.

The tracking system is based on the contribution of each project to the climate mitigation and/or adaptation objectivesoftheRioConventiononClimateChange:

A f I F


Supporting Africa in its Efforts to Combat Climate Change

• RioMarker1:projectswherethecontributionto mitigating and/or adapting to climate change represents a significant objective (40% of the AfIF contribution can be reported as climate action support);

• RioMarker2:projectswherethecontributionto mitigating and/or adapting to climate change represents the principal objective (100% of the AfIF contribution can be reported as climate action support).

Mitigation measures include:

• Limiting the emission of greenhouse gases caused by human activity;

• Improving energy efficiency and increasing energy savings;

• Increasing the production and use of renewable energy;

• Protecting and/or enhancing greenhouse gas sinks and reservoirs.

Adaptation measures include:

• Reducinghumanandenvironmentalvulnerability to the impact of climate change;

• Promoting climate change adaptation technologies, including the related infrastructures;

• Measures for emergency prevention and preparedness to cope with natural disasters.

Of the 16 AfIF contributions allocated to projects in 2016, 13 target climate action. Out of the total €288.5 million, €112.3 million can be reported asclimateactionsupportaccordingtotheRioConventiononClimateChange(RioMarker1:40%oftheAfIFcontribution,RioMarker2:100%oftheAfIF contribution).

From its launch until the end of 2016, 2 AfIF contributionscanbereportedasRioMarker2,with AfIF contributions totalling €12.8 million to be reported as climate action support. Another 11 projectswerereportedasRioMarker1,withAfIFcontributions totalling €99.5 million to be reported as climate action support.

The full list of AfIF contributions approved in 2016 isavailableintheannexattheendofthisreport.Thisannexincludesdetailedamountsperprojecttobe reported as climate action support in accordance withtheRioMarkerstrackingsystem.

A f I F

AfIFContribution toClimate Change

Rio Marker 0 3 contributions



Results

Last year saw a real step change in terms of the European Union's partnership with Africa, in line with our determination to make our development coop-erationmoreflexible,responsiveandeffective.

2016 was the first year of operations for the Africa Investment Facility (AfIF). As agreed with our partner countries, a key priority for the AfIF in 2016 was regional growth and integration, including facilitating intra-African trade. This translated into 16 projects focusing on major upgrades to transport and energy, ICT, and water and sanitation infrastructures. A total of over €288 million of EU support contributed to investments worth over €2.3 billion.

The Facility also aims to improve the pipeline of potential projects in Africa, which is an important bottleneck to investment in the region. Asanexample,financingforastudyontheAbidjan-Lagoscorridorhigh-way development project was approved in 2016. The fight against climate change has been at the core of all our investment in Africa, with more than 90% of our support contributing to these efforts.

AfIF is an open and effective cooperation platform where the EU joins forces with European development financial institutions and regional development banks. It has been designed to cover a wide range of sectors, which also include agriculture, social services and support to micro, small and medium-sized enterprises, with a strong focus on youth and women. The pipeline of projects is very promising, including in these crucial sectors. AfIF's first year of activities is proof of the EU's commitment to support global efforts to achieve genuinely sustainable development in Africa and beyond.

Building on this success, and building on the logic of the new European Concensus on Development, the EU intends to further scale up its efforts. This notably means pursuing, including through innovative financing models andfurthermobilisingtheprivatesector,inthecontextofthenewExternalInvestment Plan (EIP). The EIP will integrate the activities of the AfIF, which will evolve within the EIP into the Africa Investment Platform, into a holistic approach, which also seeks to improve the overall investment climate and business environment. In this way, we hope to spur more inclusive growth and responsible investment in Africa, which ensures that the social and economic benefits are felt by all.

CLOSING REMARKSA f I F

Stefano ManservisiDirector General, International Cooperation

and Development


EU Blending Frameworks

A new governance structure for blending instruments was agreed with the EU Member States in 2014. Within this new structure, the EU implements blend-ing operations under the Development Cooperation Instrument (DCI), the European Development Fund (EDF), the European Neighbourhood Instrument (ENI) and the Instrument for Pre-Accession Assistance (IPA) Blending Frameworks, corresponding to the financing instrumentssupportingtheEU'sexternalpolicies. Through their corresponding facilities, the Blending Frameworks cover the countries and the-matic operations concerned.

ResourcesfortheAfIFaremadeavailablefromthedifferent EU financing instruments (EDF and DCI), in coherence with the priorities established in the rele-vant programmes, to support national, regional and inter-regional projects in eligible countries in Africa.

Project assessment and Board opinion

A blending operation needs to be developed by a financial institution, as it involves the provision of a loan or other type of financing from one or more financial institutions.

The Lead Finance Institution is in charge of submitting a project proposal via an application form, which is discussed and assessed at an AfIF Technical Assessment Meeting. These meetings

are chaired by the Commission with the partic-ipationof theEuropeanExternalActionService(EEAS) and financial institutions.

Based on the results of the discussions at the Technical Assessment Meeting, proposals are either considered mature enough for submission to the Board, may be returned for re-submission at a subsequent meeting, or may be rejected.

The Board is responsible for formulating opin-ions on individual blending operations. It is chaired by the Commission with the participa-tion of the EEAS and the EU Member States, as voting members, and the financial institutions as observers. Based on Board opinions for the selected proposals, a complementary decision is adopted by the Commission.

Secretariat

The Secretariat of the EU Blending Frameworks is run by the Commission. The Secretariat supports the management of the EU Blending Frameworks by providing support, including in the assessment process and formulation of opinions by the Board, coordination of consultations and organisation of technical assessment and Board meetings, reporting, dissemination of information, sharing of best practices and training. The Directorate-General for International Cooperation and Development (DG DEVCO) provides support to the DCI and EDF Blending Frameworks.

ORGANISATIONAL STRUCTURE

A f I F

A f I F

ANNEX Country

Year of approval Title of the project

Rio Marker

Consortium of Finance Institutions Sector

Total project cost (€ million)

AfIF contribution (€ million)

Amount to be reported as Climate Action support (€ million) Type of AfIF support Status

Tendering of EU financed project components started?

Construction of the project started?

EU financed TA/Guarantee/Risk Capital started?

Cross-regional 2016Transport Facilitation Programme on the Bamenda-Enugu Corridor - Cross River Border Bridge

AfDB, IDA/WB, JICA Transport 391.40 24.50 9.80 Investment Grant Approved No No No

Ivory Coast 2016 Sovereign loan Ivory Coast for renewable electricity access, production and distribution AFD Energy 129.2 24.00 9.60 Investment Grant Approved No No No

Kenya 2016 Port of Mombasa Berths Upgrade and Rehabilitation EIB, AFD Transport 172.58 19.11 7.64Investment Grant/TA/others Signed No No No

Madagascar 2016 Ring road in Antananarivo AFD, EIB Transport 62.8 4.80 0.00 TA Signed No No No

Madagascar 2016 Antananarivo Integrated Drainage and Sanitation Programme AFD Water/Sanitation 34 2.82 2.82 Investment Grant/TA Approved No No No

Nigeria 2016 Enhancing Vocational Training delivery for the power sector in Nigeria AFD Energy 50.7 8.00 3.20 TA Approved No No No

Nigeria 2016 SUNREF Nigeria AFD Energy 134 10.00 10.00 Investment Grant Approved No No No

Regional Central Africa 2016

Central Africa Backbone Project – Central African Republic Component AfDB ICT 147.913 17.47 6.99 Investment Grant/TA Approved No No No

Regional West Africa 2016 Rosso Bridge Construction Project AfDB, EIB Transport 90 20.00 8.00 Investment Grant/TA Approved No No No

Regional West Africa 2016

Project to Rehabilitate the Lomé-Cotonou Highway and Facilitate Transport on the Abidjan-Lagos Corridor, Phase 2; and to Protect the Togolese Coast from Erosion

AfDB, EIB, WADB, EBID, IDB Transport 147.02 20.00 8.00 Investment Grant/TA Approved No No No


Project to Rehabilitate the Gounghin-Fada N'Gourma-Piéga-Niger Border Section of the CU2a Corridor

AfDB, JICA Transport 177.5 28.00 11.20 Investment Grant/TA Approved No No No


Road Improvement and Transport Facilitation Project on the Bamako-Zantiebougou- Boundiali-San Pedro Corridor

AfDB Transport 209.82 28.00 11.20 Investment Grant/TA Approved No No No


Electrical Network Interconnection in Guinea and Mali

AfDB, WADB, IDB, EBID, AFD, others Energy 329 30.00 12.00 Investment Grant/TA Approved No No No


Coyah-Forecariah-Farmoreah Road Rehabilitation Project AfDB Transport 75.1 29.60 11.84 Investment Grant/TA Approved No No No


Study for the Abidjan-Lagos corridor highway development project AfDB Transport 14.37 9.13 0.00 TA Approved No No No

Senegal 2016 Senegal Electricity Modernisation EIB, WB Energy 158.98 13.08 0.00 Investment Grant Approved No No No

TOTAL 2,324.38 288.50 112.29

LIST OF APPROVED PROJECTS (ALL FIGURES ARE IN € MILLION)

CountryYear of approval Title of the project

Rio Marker

Consortium of Finance Institutions Sector

Total project cost (€ million)

AfIF contribution (€ million)

Amount to be reported as Climate Action support (€ million) Type of AfIF support Status

Tendering of EU financed project components started?

Construction of the project started?

EU financed TA/Guarantee/Risk Capital started?

Cross-regional 2016Transport Facilitation Programme on the Bamenda-Enugu Corridor - Cross River Border Bridge

AfDB, IDA/WB, JICA Transport 391.40 24.50 9.80 Investment Grant Approved No No No

Ivory Coast 2016 Sovereign loan Ivory Coast for renewable electricity access, production and distribution AFD Energy 129.2 24.00 9.60 Investment Grant Approved No No No

Kenya 2016 Port of Mombasa Berths Upgrade and Rehabilitation EIB, AFD Transport 172.58 19.11 7.64Investment Grant/TA/others Signed No No No

Madagascar 2016 Ring road in Antananarivo AFD, EIB Transport 62.8 4.80 0.00 TA Signed No No No

Madagascar 2016 Antananarivo Integrated Drainage and Sanitation Programme AFD Water/Sanitation 34 2.82 2.82 Investment Grant/TA Approved No No No

Nigeria 2016 Enhancing Vocational Training delivery for the power sector in Nigeria AFD Energy 50.7 8.00 3.20 TA Approved No No No

Nigeria 2016 SUNREF Nigeria AFD Energy 134 10.00 10.00 Investment Grant Approved No No No

Regional Central Africa 2016

Central Africa Backbone Project – Central African Republic Component AfDB ICT 147.913 17.47 6.99 Investment Grant/TA Approved No No No

Regional West Africa 2016 Rosso Bridge Construction Project AfDB, EIB Transport 90 20.00 8.00 Investment Grant/TA Approved No No No


Project to Rehabilitate the Lomé-Cotonou Highway and Facilitate Transport on the Abidjan-Lagos Corridor, Phase 2; and to Protect the Togolese Coast from Erosion

AfDB, EIB, WADB, EBID, IDB Transport 147.02 20.00 8.00 Investment Grant/TA Approved No No No


Project to Rehabilitate the Gounghin-Fada N'Gourma-Piéga-Niger Border Section of the CU2a Corridor

AfDB, JICA Transport 177.5 28.00 11.20 Investment Grant/TA Approved No No No


Road Improvement and Transport Facilitation Project on the Bamako-Zantiebougou- Boundiali-San Pedro Corridor

AfDB Transport 209.82 28.00 11.20 Investment Grant/TA Approved No No No


Electrical Network Interconnection in Guinea and Mali

AfDB, WADB, IDB, EBID, AFD, others Energy 329 30.00 12.00 Investment Grant/TA Approved No No No


Coyah-Forecariah-Farmoreah Road Rehabilitation Project AfDB Transport 75.1 29.60 11.84 Investment Grant/TA Approved No No No


Study for the Abidjan-Lagos corridor highway development project AfDB Transport 14.37 9.13 0.00 TA Approved No No No

Senegal 2016 Senegal Electricity Modernisation EIB, WB Energy 158.98 13.08 0.00 Investment Grant Approved No No No

3 9

TOTAL 2,324.38 288.50 112.29

A f I F O P E R A T I O N A L R E P O R T 2 0 1 6

LIST OF APPROVED PROJECTS (ALL FIGURES ARE IN € MILLION)

ACP: African, Caribbean and Pacific

AFD: Agence Française de Développement (French Development Agency)

AfDB: African Development Bank

AfIF: Africa Investment Facility

CEMAC: Economic and Monetary Community of Central Africa

DCI: Development Cooperation Instrument

DG DEVCO: Directorate-General for International Cooperation and Development

DRC:DemocraticRepublicoftheCongo

EBID: ECOWAS Bank for Investment and Development

ECOWAS: Economic Community of West African States

EDF: European Development Fund

EEAS:EuropeanExternalActionService

EFSD: European Fund for Sustainable Development

EIB: European Investment Bank

EIP:ExternalInvestmentPlan

ENI: European Neighbourhood Instrument

EU: European Union

EU-AITF: EU-Africa Infrastructure Trust Fund

FFEM: Fond Français pour l’Environnement Mondial (French Facility for Global Environment)

GEEREF:GlobalEnergyEfficiencyandRenewableEnergy Fund

ICT: Information and Communications Technologies

IDA: International Development Association

IDB: Islamic Development Bank

IPA: Instrument for Pre-Accession Assistance

JICA: Japan International Cooperation Agency

MSME: Micro, Small and Medium-sized Enterprise

NAPTIN: National Power Training Institute of Nigeria

PFI: Partner Finance Institution

PIDA: Programme for Infrastructure Development in Africa

SENELEC: Société Nationale d’Electricité du Sénégal (National Electricity Company of Senegal)

SME: Small and Medium-sized Enterprise

SUNREF:SustainableUseofNaturalResourcesand Energy Financing

TA: Technical Assistance

UN: United Nations

WADB: West African Development Bank

WAEMU: West African Economic and Monetary Union

ACRONYMSA f I F

These projects are implemented in partnership with:

MN

-AT-17-001-EN-N

ISBN 978-92-79-70573-1

doi:10.2841/165139

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