Loans for social protection could be a 'game-changer' for France's COVID-19 aid

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The Agence Française de Développement has increased its support for health amid the pandemic. Photo by: Pixabay / Pexels

MANILA/BRUSSELS — The French development agency is seeing rising demand for social protection support as countries try to mitigate the effects of COVID-19.

But the Agence Française de Développement had not foreseen this at the beginning of the outbreak, Christophe Paquet, head of the health and social protection unit at the AFD, told Devex. He said AFD has received requests for this type of support — which comes in the form of sovereign loans — from countries such as India, Bangladesh, Sri Lanka, and the Dominican Republic.

“That's something that's new and … could be a game-changer for us. Because in terms of overall volumes, we foresee that maybe by the end of the year, we may end up with €2 billion-€3 billion loans on this sector,” he said.

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If this continues, it could change the overall amount of money that AFD will devote to the sector, Paquet said by phone last week. In 2019, AFD committed €175 million ($196 million) for social protection, he said.

Paquet said countries’ perception of social protection is changing with the crisis.

“I don't have the feeling that that was on top of the agenda in many countries before, and what the crisis is highlighting is the importance of inequalities that are deepening, also because of the crisis, and the social consequences that this may bear. So that's the big game-changer,” he said.

Increased focus on health

AFD has also increased its support for health amid the pandemic. In April, it launched the Health in Common initiative, which consists of €150 million in grants and €1 billion in concessional loans, to help countries’ response.

The focus is on French-speaking countries in Africa. AFD channeled additional financing to existing projects, such as an extra €2 million for the Indian Ocean epidemiologic surveillance network. It also committed an additional €2 million to hospitals in Kinshasa to better equip facilities to handle COVID-19 cases.

“These are two examples of the kinds of things we've been able to do very, very quickly, and to provide direct support to ongoing activities,” Paquet said.

AFD is also providing support to nonprofit partners and research networks to help strengthen countries’ responses, including their diagnostic capacities.

“We thought at the beginning of the outbreak in March, April, the priority was really to understand what's going on,” Paquet said. “And it's still a question in Africa. We have fragmentary data of what's actually going on in Africa, and there are a lot of uncertainties on the dynamic of the epidemic.”

Financing for the initiative represents approximately 10% of AFD’s total commitments for 2020, Paquet said, showing an AFD’s increasing commitment to health. In 2019, the AFD budget for health was 4%, he said.

Operations from project appraisal to funding disbursement are also going through in “a few weeks,” Paquet said. This is a change from AFD’s usual fare of dams and hospitals where the process can take years.

Until now, the bilateral donor has had limited experience responding to emergencies, Paquet said, with notable exceptions such as the Ebola crisis in West Africa, and the 7.0-magnitude earthquake in Haiti in 2010.

Most of the projects which are spread over 16 countries under the Health in Common initiative have been committed. But Paquet declined to comment on how much had been disbursed to date.

“I can't give you figures because it doesn't mean a lot at this stage. But ... again, that's the challenge that we've been facing ... adapting our procedures and working to meet the needs,” he said.

About the authors

  • Jenny Lei Ravelo

    Jenny Lei Ravelo is a Devex Senior Reporter based in Manila. She covers global health, with a particular focus on the World Health Organization, and other development and humanitarian aid trends in Asia Pacific. Prior to Devex, she wrote for ABS-CBN, one of the largest broadcasting networks in the Philippines, and was a copy editor for various international scientific journals. She received her journalism degree from the University of Santo Tomas.
  • Vince Chadwick

    Vince Chadwick is the Brussels Correspondent for Devex. He covers the EU institutions, member states, and European civil society. A law graduate from Melbourne, Australia, he was social affairs reporter for The Age newspaper, before moving to Europe in 2013. He covered breaking news, the arts and public policy across the continent, including as a reporter and editor at POLITICO Europe.