The French Development Agency known as the Agence Française de Developpement (AFD) is involved in various sectors in Africa. It has been operating in Ethiopia for almost 20 years and has financed projects ranging from education to health, agriculture and energy.
Capital’s Eskedar Kifle sat down with Christian Yoka, Regional Director of the AFD to talk about the Agency’s past, ongoing and future projects. Excerpts:
Capital: Please tell us about your agency, the French Development Agency, its role, its mission?
Christian Yoka: AFD is a financial institution. It is the main implementing body for the French official development assistance policy towards developing countries. It provides funding as well as technical assistance to countries, and it can be for the government or it could be for private enterprises, it can also be NGOs or even the banking sector.
Our main mission is to really help countries to develop themselves. For that we have a wide range of financial tools; it could be a grant, it could be loans or it could be direct investment. We are acting in different sectors: education, health, infrastructure, energy and also agriculture among others. We also work to help develop the private sector, and we are involved in water and sanitation programs. In 2012, AFD’s total disbursed loans were 7 billion Euros, of which 2 billion was just for Africa, where our main focus is.
Capital: You are involved in different sectors, but what kind of projects do you tend to focus on, especially in Ethiopia?
Yoka: In Ethiopia, we have been active here since 1993, so we are not completely new. The projects we finance are projects that are in line with the Government’s priority. The Growth and Transformation Plan focuses a lot on infrastructure, especially energy. So, energy is one of our main activities in Ethiopia. For instance, we have financed a major project in Ashegoda in the north part of the country near Mekele, a wind farm that can produce 120 Mega Watts. It was financed with 45 million Euros.
We also are currently working with Ethiopian Electric and Power Corporation (EEPCo) to improve the transmission lines of the company; mainly the line between Akaki and Mojo, which is a very critical corridor for the country. We are also in the process of finalizing a 50 million Euro loan to upgrade the complete network of EEPCo.
Last but not least, as you know the Government is really focused on having a mix of sources of energy. With that regard, we are currently working (with the government) to finance a geothermal project in Thendaho with an overall finance of 21 million Euros. Energy is a key sector for us as it is in line with the Government’s priority.
Besides this, we have also a strong partnership with Ethiopian Airlines. As you know, the Government wants to increase the level of exports and Ethiopian Airlines plays a key role in this. So we financed ET for two loans with a total amount of 80 million Euros. One is to help Ethiopian Airlines to increase its cargo capacity. Currently, I think it has a 180,000 metric ton capacity, the project is to help increase that number to 600,000 metric ton capacity, which is really important because it will have a direct impact on the export capacity of the country, in terms of fruits and vegetables, meat, flowers etc…
The other loan to ET is to finance their training center. Now ET has one of the most well performing training centers. There are many African companies that are sending their pilots to be trained here in Ethiopia. The training center is almost done.
We have a close relationship with the Addis Ababa City Administration. We are working on a project with the City involving the construction of new abattoir. The existing one is quite old. We are working to help improve the old abattoir in terms of up to date technology as well as working to finance the construction of new abattoirs. This will be done with a 40 million Euros loan. We are also working in the transport sector with the City with the finance of 40 million Euros. The studies are ongoing and we hope to finance this project by the end of 2014 or beginning of 2015.
The other sector we are strongly involved in is water. We are currently in the process of financing the extension of the Legedadi water reservoir; we are co-financing it with the World Bank. We also work on increasing the water network of small towns.
These are the sectors and the projects we are involved in. We do this with the object of transferring technologies and know how.
Capital: You mentioned some projects you are involved in with EEPCO, can you tell us more about that?
Yoka: As I was saying, the transmission line of electricity is really critical for a country. A lot is being done to produce more electricity, but at the same time we need to be able to deliver that electricity to the public. With this regard, we need to invest more in transmission lines. It is a loan agreement that will be signed with the government and it will be passed to EEPCo. We hope to finish the process by the end of 2014.
Capital: What would you say are the challenges you face while operating in Ethiopia?
Yoka: The major challenges we have been facing is to have a proper financial tool. Until 2012, we were unable to give loans to the Government; we had to use other financial tools like grants. That was a major constraint for us while working in Ethiopia. Our actions were limited because of that, but it has all changed now.
Capital: What are the biggest projects you are involved with in other Africa countries?
Yoka: We have been involved in so many projects in Africa. Like I said we have committed two billion Euros to Africa. We are financing major projects in Africa including in similar sectors as we are working on in Ethiopia. For instance, the Bujagan project in Kenya. We also finance social housing in South Africa. There are many more…
Capital: You stated that you tend to finance projects that are in line with the government’s development priorities. Is that how you operate or does AFD have its own interests as well?
Yoka: I can’t really say we have our own priority. Of course we have a competitive advantage when it comes to some sectors; there are sectors where we think we are particularly strong, one of these is the energy sector. Basically what we are trying to do, and this is important for a donor, is that not to come to a country with our own priority. The most important thing is to focus on what the country needs. We have to look at the country’s priorities and inside these priorities, there are different sectors. We try to identify where we can work within those sectors. We try to focus on projects that will have a major impact.
Capital: Maybe like you stated, you do not have priorities of your own. But, do you think there are sectors that have not been prioritized but should have been?
Yoka: That could be possible but as far as we are concerned, I have to say that so far, all the sectors we are involved in are those that are and should be prioritized. But to answer your question, for instance here in Ethiopia, the Government says that growth will come through public investment, so you have major public investments. We work with the private sector a lot in many countries, but it is not something we do a lot here because it is not really a priority, if you look at the way things are done. The private sector is booming here and I am sure we will work in that area, and we are actually trying