The state of French aid: A look into AFD’s €21 billion portfolio

France was the world’s fifth-largest bilateral donor last year, and for decades, it has spent tens of billions to support development and humanitarian causes across the globe. But similar to many Western donors, French aid has seen a sustained decline in the past couple of years. Based on the data from the Organisation for Economic Co-operation and Development, France’s total official development assistance, or ODA, went down to $15 billion in 2023 from $17.3 billion in 2022 — the first time since 2018 that French aid suffered a real-term decline. Despite this trend, France remains among the most generous donors, with the preliminary data showing ODA in 2024 of $15.4 billion, or 0.48% of its gross national income. French aid is channeled through several government agencies. According to OECD, the French Development Agency — also known as Agence Française de Développement, or AFD — accounted for about 39% of France’s ODA disbursement in 2023, worth nearly $6.9 billion. But exactly how does AFD fund development? And what are its priorities? What do the top-level figures say? AFD is part of the larger AFD Group, which includes Expertise France, the lead agency for technical cooperation, and Proparco, a subsidiary of AFD serving as France’s development finance institution. AFD’s funding model is different to most government agencies. It uses its government subsidies to borrow from other sources, and lend it on. According to its website, 85% of AFD’s resources, amounting to between €12 billion and €13 billion ($14.1 billion to $15.3 billion in current rates) annually, are loans from private investors, funds, and central banks. The remaining 15%, or about €2 billion, comes from public sources, chiefly the French government and the European Union. AFD generates an additional €12 billion through cofinancing, bringing its total annual financing capacity to €25 billion. AFD utilizes various funding mechanisms to support development projects worldwide. Based on its portal, there are currently 427 active projects, worth €20.7 billion ($24.4 billion in current rates). Of this, 214 active projects are financed via loans, with a total financing of €16.3 billion, representing 78.8% of AFD’s total active portfolio. Grants make up another 11.3% of the portfolio, worth €2.3 billion for 162 projects. The remaining active projects are funded through other mechanisms, including technical assistance — often delivered as in-kind training and support — and lines of credit. These figures only represent AFD’s financing, and do not include cofinancing from other donors, which means that in some cases, the total project costs can be higher. We also converted non-Euro currencies using historical rates. Where does AFD invest its money? Based on the data, AFD currently has active projects in 64 countries. More than a third of the total financing, worth €7.1 billion, went to sub-Saharan Africa. South Asia ranked next among priority regions, with €3.8 billion, followed by East Asia and the Pacific, with €2.9 billion; Latin America and the Caribbean, with €2.3 billion; Europe and Central Asia and the Middle East and North Africa, with €1.4 billion each. AFD also allocated €1.8 billion for multicountry and regional projects, and the remaining €63.6 million to French overseas territories: French Guiana, Guadeloupe, and Martinique. Among countries, India received the largest allocation, worth €1.8 billion for 17 active projects, or 8.7% of the total. The top four projects in India are all in the transport sector. The biggest, worth €310 million, aims to address road congestion in Bangalore through the construction of two metro lines and the extension of two existing lines. Brazil ranked next, with €1.5 billion for 14 active projects, with the biggest, worth €300 million, for a multisectoral project in Minas Gerais, focusing on water and sanitation and energy. This was followed by Turkey, with €1.4 billion for 10 active projects. The top activity in the country, worth €367 million, will improve the water and sanitation and waste management services in eight provinces in Turkey hosting Syrian refugees. Other top recipient countries include Kenya, with €1.3 billion, Tanzania, with €1.2 billion, South Africa and Pakistan, with €1 billion each, and Bangladesh, with €965.6 million. What are AFD’s sectoral priorities? Our findings show that the majority of AFD’s projects have multiple target sectors. Among single-sector activities, energy came out as the priority, with a total financing of €2.4 billion, or 11.7% of the total. Water and sanitation ranked next, with €2.3 billion, then health and social protection, with €768.3 million, sustainable cities, with €578.4 million, and mobility and transport, with €563.9 million. We also counted the number of times a sector is tagged in a project, which may be useful to identify priorities, especially for multisectoral projects. Based on our analysis, energy is either the sole priority or among the target areas in 186 of the 427 active projects. Climate ranked next, appearing as a target in 144 projects, then water and sanitation, with 134 projects, and sustainable cities, with 118 projects. Other most-tagged sectors include education and training, with 100 projects, infrastructure, with 88 projects, and governance, with 82 projects. Try out Devex Pro Funding today with a free five-day trial, and explore funding opportunities from over 850 sources in addition to our analysis and news content.