International

Development Agencies

Team Dollar28/01/10

CONTENT

I. Multilateral development agenciesA. DefinitonB. Different actorsC. Example of BAD

II. Bilateral development agenciesA. DefinitionB. Different actorsC. Example of AFD

III. Concrete cases of developmentA. A case sustains by ProparcoB. A case sustains by AFD

I. MULTILATERAL DEVELOPMENT AGENCIES

Definition The Multilateral Development Banks - BMD –

are supranational institutions created by sovereign states are its shareholders.

Their missions are part of political cooperation and development aid as defined by these states :

Finance projects in emerging countries (economical and social development)

Support for investment and capital formation Play a major role on the international capital

markets, raising annually large amounts of funds needed to finance their lending

Different actors World Bank European Investment Bank Nordic Investment Bank

European Bank for Reconstruction and Development

Inter-American Development African Development Bank Asian Development Bank

I. MULTILATERAL DEVELOPMENT AGENCIES

Example of BAD (ADB)

Asian Development

Bank

USA Japan South Corea

15,6%15,6%

CAPITAL

165 B$ Garantee

d

3-5% Invested

The Lever effect

India

Other asian countries

I. MULTILATERAL DEVELOPMENT AGENCIES

Asian Development

Bank

The Lever effect

Cheap world market loans

AAA label

CAPITAL

165 B$ Garantee

d

Indonesia Pakistan

Phillipines

India

Other asian countries

Low interest rate financing

adapted to countries

needs

I. MULTILATERAL DEVELOPMENT AGENCIES

World Bank

I. MULTILATERAL DEVELOPMENT AGENCIES

World Bank Created in 1945

184 state members

Analysis, advises, loans

I. MULTILATERAL DEVELOPMENT AGENCIES

World Bank 6 important goals:

Poverty reduction and the sustainable growth in the poorest countries, especially in Africa

Post-conflict countries and fragile states

Development solutions with customized services as well as financing for middle-income countries

I. MULTILATERAL DEVELOPMENT AGENCIES

World bank 6 important goals:

Regional and global issues that cross national borders--climate change, infectious diseases, and trade;

Greater development and opportunity in the Arab world

Pulling together the best global knowledge to support development.

I. MULTILATERAL DEVELOPMENT AGENCIES

World Bank

http://www.nsi-ins.ca/fran/publications/multilateral/asian.asp

I. MULTILATERAL DEVELOPMENT AGENCIES

II. BILATERAL DEVELOPMENT AGENCIES

Governmental agency owned entirely by one country Bilateral is then, that country and the helped

one Most of them are partner with the World

Bank for coordination Money comes mainly from investors and

market Thanks to AAA rating

Money is distributed differently.

Different actors France to its former colonies (AFD) Japan to Asia (JBIC and JICA) USAID (US Agency for International

Development)

II. BILATERAL DEVELOPMENT AGENCIES

Example of a bilateral agency: the AFD AFD = French Agency for Development

A financiary institution (EPIC) Fund economic and social development projects in developing countries Promote the french economy in French DOM-TOM Follow the Millenium Development Goals fixed by the UN in 2000 : less poverty, improve the environment, health…

II. BILATERAL DEVELOPMENT AGENCIES

AFD organization

AFD : development bank. Its objectives and means are fixed by the state Proparco : development financiary institution which promote private investments in developing countries CEFEB : formation center FFEM : public fund for environment

II. BILATERAL DEVELOPMENT AGENCIES

Financiary tools (1/2) Subsidies : only for very poor countries. It

concerns the social sector, rural and urban development

Loans : for States, public collectivities and companies

3%

97 %

Subsidies

Loans

Very good financial grade : AAA the interest rate is very interesting compared with the market rate

II. BILATERAL DEVELOPMENT AGENCIES

Financiary tools (2/2) But also improved loans but private

companies who work for public projects Involved in PPP Overseas, the AFD sustains financially small

businesses Projects to reduce the debts : each time the

country gives to France its repayment, AFD invests the same amount in poverty reduction programs (C2D)

II. BILATERAL DEVELOPMENT AGENCIES

III. CONCRETE CASES OF DEVELOPMENT

Increasing electricity generation in Jordan

Why?• Significant electricity consumption growth

(+8.9% pa) which is expected to continue up to 2025.

• Jordan has increased its dependency on oil imports from Iraq and Saudi Arabia at preferential tariffs▫ Increase of the international cost of energy▫ IMF’s pressure to sell the energy at prices reflecting the real

production costs

Therefore:• the Jordanian authorities wish to improve the

national power generation capacity• Gas combined cycle power plant, to be erected at

Al Qatrânah with a capacity of 373MW• The project will improve on a sustainable and

significant basis the power capacity of Jordan by providing 17% of the national generation capacity by 2011

2003

2004

2005

2006

2007

2008

2009

4000000000

5000000000

6000000000

7000000000

8000000000

9000000000

10000000000

Ele

ctr

icit

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on

su

mp

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(K

wh

)

Site close to:• The gas pipeline• The road from an existing substation of National Electric Power Company (NEPCO) • The Jordan transmission network.

III. CONCRETE CASES OF DEVELOPMENT

Increasing electricity generation in Jordan• The proposed financing structure

for the project involves loans and guarantees from ▫ Société de Promotion et de

Participation pour la Coopération économique (PROPARCO)

▫ International Bank for Reconstruction and Development (IBRD)

▫ National Electric Power Company (NEPCO)

▫ The Export-Import Bank of Korea (Korea Eximbank)

▫ European Investment Bank (EIB)▫ Islamic Development Bank (IDB)▫ BNP Paribas ▫ KFW of Germany

Proparco10%

Nepco4%

IBRD10%

Other foreign private sources

76%

Total cost : 465 m$

III. CONCRETE CASES OF DEVELOPMENT

Positive impacts are main objectives Allow the country to secure its power generation

capacity to face its required needs. Cheapest source the country could get (5,2 US cent/kWh)

Indirect economic impacts Local expenditures during both the construction and

operating phases Through taxes granted to the Jordanian Government

Positive employment impacts Creating 600 jobs during the peak of the construction

phase Around 75 skilled and semi-skilled labor during the 25 year

operation phase.

III. CONCRETE CASES OF DEVELOPMENT

1. The power station Natural gas as the main fuel and distillate fuel oil (DFO) as a back-up. 2 gas turbines 2 heat recovery steam generators (HRSGs 1 steam generator (130 MW, supplied by Skoda Power as.) 1 air-cooled condenser

2. Electricity connection Through a 500-meter long, 132-kilovolt (kV) electrical transmission

line. Cost: 4 m$ paid by National Electric Power Company (NEPCO) NEPCO will purchase all of the plant's electrical output through a 25-

year PPA.

3. The fuel supply Supplied from the high-pressure Arab Gas Transmission Pipeline (AGTP)

4. The water supply Supplied by Water Authority of Jordan (WAJ) 2 km long water pipeline from a pumping station Cost: 140 k$ paid by the Qatrana Electric Power Company.

III. CONCRETE CASES OF DEVELOPMENT

AFD - Central African Republic: Proposed rehabilitation works of art on the priority road network of South-West

Many problems → deep economic crisis: a drop in traffic, up to 50% for all modes of transport (road, air & river).

The South-west: significant resources (foreste & diamonds)

forestry sector: production doubled in 10 years, the largest private employer in the formal and the largest contributor to tax revenues of the State

delivery of products difficult → significant transportation costs

50% of the selling price of logs. Based on international market prices, increased transportation costs may lead logging companies to suspend the marketing of certain species.

III. CONCRETE CASES OF DEVELOPMENT

Objectifs :

Guaranteeing the desisolation of this region and northern Congo & connecting to the ports of Cameroon

Achievement of the Millennium Development Goals (MDGs) on the theme "Meeting the special needs of landlocked developing States”

Impacts :

Guaranty the continuity of economic activity, access to health facilities and administrative services, and the supply of commodities

Environmental confined to the work period (Management Plan for the Environment applied).

Campaign of sensibility to the STD/AIDS

III. CONCRETE CASES OF DEVELOPMENT

Implementation :

grant of € 5M to the CAR

short term: maintenance of roads by logging (principle user pays)

partnership agreement: the Ministry of Equipment and Transport, local authorities and private operators, mostly logging companies and transportation companies.

Financial Information :

Global Cost: € 6M

AFD grant: € 5M

Modality: Subvention

III. CONCRETE CASES OF DEVELOPMENT

THANK YOU !ANY QUESTIONS ?