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Partnerships for development
The collaboration and coordination with its peers are key drivers for Proparco’s effectiveness and one of the engines of its growth. For several years, Proparco has been scaling up partnerships with the other development finance institutions (bilateral/multilateral and regional), its shareholders, and private investors in order to meet the growing and increasingly complex needs of the private sector in Southern countries. The objective is to strengthen technical and financial cooperation in order to increase its impacts on development.
Proparco’s partners allow cofinanced operations to be conducted and mutual funds to be mobilized to bring about large-scale projects, which account for a growing share of Proparco’s activity.
They also promote the adoption of common rules, procedures and standards that contribute to standardizing practices and make it possible to build harmonized tools and indicators to evaluate projects and measure results. Finally, this cooperation between Proparco’s teams and their counterparts from other development institutions and agencies facilitates information and knowledge sharing during regular exchanges and meetings.
© Reza Akram
The European Development Finance Institutions (EDFI)
The association of European Development Finance Institutions (EDFI) is one of the most dynamic achievements of this partnership between Proparco and its peers. It was set up in 1992 and includes 15 European bilateral institutions dedicated to financing the private sector in Southern countries.
Under the impetus of EDFI, Proparco has, for example, adopted several joint agreements with its European counterparts that provide a framework for its investments, such as the Principles on Responsible Financing. EDFI has also led to the creation of two funds:
- European Financing Partners (EFP)
- Interact Climate Change Facility (ICCF)
In order to facilitate experience sharing and capitalization, Proparco also works in partnership with EDFI members on conducting evaluations of jointly implemented operations.
Close cooperation with DEG, FMO and IFC
In the context of EDFI, Proparco has had close relations with its German and Dutch counterparts, DEG and FMO, since 1998 and 2007, respectively.
In 2012, the three institutions created a cofinancing facility that allows them to pool their resources and delegate project appraisal and monitoring to one of the three partners. This coordination allows them to take a common position on transactions of up to EUR 90m.
In October 2009, Proparco signed a cooperation agreement with the International Finance Corporation (IFC), the World Bank’s private sector financing arm. It aims to facilitate project cofinancing arrangements in key development sectors: agro-industry, renewable energies, energy efficiency, banks and financial markets…
The European Union
Accredited as a financial intermediary by the European Union since September 2015, Proparco can now mobilize resources from those partners to supplement its own funding. This partnership-based approach enables Proparco to leverage its financing and to maximize the developmental impact of all projects financed.
Proparco can draw on European Blending Facilities and Instruments dedicated to the private sector, whether through subsidies, which can finance large programs of business and impact development services, or through financial instruments such as risk mitigation schemes, to be deployed in addition to Proparco financing.
The concessionality from this type of blending allows Proparco to diversify its range of financing to support the private sector’s role as an accelerator of transitions and contributor to the Sustainable Development Goals (SDGs).
Green Climate Fund
The mobilization of financing from the Green Climate Fund (GCF) will allow Proparco to support the private sector’s efforts for climate change mitigation and adaptation, by mobilizing grants, debt, guarantees or equity, and thereby help a greater number of high-quality projects to get off the ground.
The shareholders: key partners
Proparco is scaling up partnerships with its shareholders with the same objective of increasing its area of action and its impacts. For example, projects have been financed in the tourist industry, infrastructure and microfinance with the Aga Khan Fund Economic Development (AKFED).
Two funds of funds for the Mediterranean (Averroès Finance I and II) have also been set up with Bpifrance to support SME financing in the Mediterranean region. Their success led to the launch of Averroès Finance III, which aims to develop venture capital in Sub-Saharan Africa.
Cooperation agreements, in particular technical and financial agreements, are also established with shareholders of Proparco and, more generally, AFD Group, for example, with the Development Bank of Southern Africa (DBSA).