AFD committed to support Govt. for green and inclusive growth

By Charumini de Silva

The operator for France’s bilateral development finance mechanism, Agence Française de Développement (AFD), on Tuesday said it was committed to strengthening its support to the Government for “green and inclusive growth” in Sri Lanka.

AFD aims to build on its worldwide experience of financing projects in other sectors related to its mandate such as promoting water resource management, sewerage, renewable energy, urban development, urban mass transportation, fisheries, waste recycling and irrigation.

“Our initial support, on the request of the French Government, came through post-tsunami projects worth ¤ 89 million for water supply, electricity, roads, bridges, community development and training. Since 2005 our commitment thus far has been around ¤ 340 million,” AFD Country Director Sri Lanka and Maldives, Martin Parent, told journalists in Colombo.

Under the new mandate the objective is to commit ¤100 million to ¤ 150 million a year to support the country’s development. This objective is restricted by a stringent mandate focused on opportunities already identified for infrastructure projects and the Sri Lankan Government being the single client.

“By the end of this year we will sign a new credit facility agreement for an integrated urban development project in Anuradhapura worth ¤ 52 million. However, the project is ongoing as some advance procurement has been made. We want to contribute significantly every year depending on the requirement of the Government and the interest from our side,” he added.

The Country Director also asserted AFD’s private sector financing arm Proparco’s mission will come to Sri Lanka early next month to hold discussions with the private sector in order to channel credit facilities as there has been considerable interest from the Sri Lankan corporate sector. 

In addition, they hope to improve the SME sector in Sri Lanka via Proparco for credit lines as well as some guarantees to bankers. 

In Sri Lanka, Proparco’s commitment stood at around ¤ 100 million and the broad scope of its operations makes it possible to respond positively to a large number of projects, with the systematic objective of harmonious, green and socially inclusive growth.

Since the tsunami, AFD has committed to six projects worth ¤ 250 million in the areas of water supply, sewerage, electricity, urban development, early childhood education, reproductive health and gender-based violence.

Noting that the maturity and grace periods of these facilities varied, he said sometimes they could provide a maturity period up to about 20-25 years with a grace period of a few years. He also acknowledged that Sri Lanka had been prompt with its paybacks.

Consequently, AFD wishes to work alongside the Government and support its policies for climate change adaptation and the reduction of greenhouse gas emissions. 

“There is an urgent need to boost Blue Economy, but also in irrigation, fisheries and social protection. There is an issue for Sri Lanka to increase its renewable energy usage. The country has huge potential in the wind and solar sectors, and there is a strong political view to develop this. We are happy to support Sri Lanka in this endeavour,” he added.

With Sri Lanka’s aging population increasing at a considerable rate, Parent pointed out that AFD was keen on assisting the Government in a social protection initiative, adding that in France they have expert knowledge in this area. 

AFD - a public financial institution which implements the policy defined by the French Government - works to combat poverty and promote sustainable development. Operating in over 75 countries, AFD in 2015 earmarked € 8.3 billion to finance projects in developing countries and for overseas France.