international workshop on public-private dialogue paris, february 1 & 2, 2006 __________________...
TRANSCRIPT
International workshop onPublic-Private DialogueParis, February 1 & 2, 2006
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« What future for Public-Private Dialogue »
Luc Rigouzzo,Director
Financial and Private Sector Department
The way forward
Funding Sub-National Programs Integration to specific country contexte Cluster / Product markets Post-conflict
The “Limitant Factor” Theory
Regulatory policies
1
Macro-economic conditions
2 3
Taxation…
4
We can try to improve 1 & 2 (but democracy – ex Tchad) But more modestly, as a bilateral agency, our role could
simple be to foster 3 with new stakeholders + with feed back on 1 + 2
Risk mitigation &
Financial instruments
A new paradigm of Aid
• N/S poverty gap & Inequalities - MDG
• Development through Growth
• Global Public Goods
MultipleStakeholders
(public & private)
MultipleFinancing Sources
Competition + New Stakeholders + More risk
ODA (58)
Trade Balance (150)
FDI (148)
Migrants Transfers
(100)
NGOs (8)
Internal Savings (?)
Bonds 11
AFD=1%
2002, Rogerson 2004, Global Development Finance 2003 (World Bank), in $Bn
Goals Stakeholders Tools
A new paradigm of Aid : New Stakeholders
Country program
Investment climateGovernance
Objectives
• Overal economic efficiency
• Cost of goods, competitivity
• Financial sector, efficiency
• Growth
• Employment
• MDGs
Multilaterals
Bilaterals
EDFIs bi-multis
Sovereign
Non Sovereign, PPPs, Big Corporates,
Civil society
Classical corporates
Borrowers / Beneficiaries Agencies
Zooming in two Emerging Stakeholders essential for PPD
Local Governments: soon to be the first line of
development Growing mandate Huge financial gap Important institutional weakness
Businesses: a new take at them As agents of growth As agents of public policy As issue of public policy
A new paradygm of AidRisk sharing, tailored concessionality & financial engineering
Widen Financing offer LT loans (incl. PTC)
More important volumes(cf. Proparco)
Equity
Locale currency(incl. ODA = Additional subsidies)
Access to LT fundings
Share /Cover risks
Adaptedsolutions
AFD’s partners needs
FinancialEngineering &
Concessionality tothe service of
dévelopment
Developguaranteesand coveringrisks tools
ARIZ, PRG, bond issuance guarantee
EDFI Partnerships / cofinancing
- Environmental outputs participating loans
- Commodity based participating loans
- Tailored concessionality
- Advisory, mandates
Examples of private sector contributions to public policy
EDULOAN (South Africa)
Microfinance for the training of disadvantaged population groups
Eduloan, a private company, assists more
than 142 000 poor students annually, giving
them access to education and training
AFD project : a guarantee on the loan
(granted in Rands) by a South African bank
to Eduloan
Housing sector in South Africa Rand Merchant Bank
Low/Middle Income Housing Programme Promotion through Local Banking System
Integration of low income household to the
program (revenue below 3000 Rands)
Training of low income borrowers
Loan of 40 million euros to a bank (RMB) to
refinance of important social housing
programme
Included concessionality equivalent to 3,4M€
Local authorities access to finance in intermediation Municipal Financing in Cap Vert
5 M€ credit line to three main banks for loans to the municipalities
0.2 M€ grant for a technical support to municipalities
The potential of guarantees with Faulu Kenya: The first financial bond emission by an MFI in Africa
Amount: 500M KES (5,52M € 03/12/03) Maturity: 5 years 25% of the risk supported by the subscribers
(commercial banks and institutional investors)
75 % garanteed by AFD 24 000 beneficiaries
Conclusion: how catalyse access of local authorities to the local financial market ? The guarantee issue (DAC/OECD)
Covering the risks with a mix of various instruments Commodity price based loan- SODECOTON Cameroun
0
200
400
600
800
1000
1200
1400
1 2 3 4 5 6 7 8 9 10 11 12
En
MF
CFA
500
550
600
650
700
750
800
850
900
950
1000
En
FC
FA /
kg d
e fi
bre
Rembts minimums Rembts anticipés Cours fibre FOB (éch. droite)
Hypothesis
ResultsReimbursement duration reduced to 8 years thanks to anticipated reimbursements during 4 years
Année 1 2 3 4 5 6 7 8 9 10 11 12Indice A CAF (FCFA/kg) 623 694 810 717 752 833 822 787 775 694 798 764Cours FCFA/USD 505 525 525 525 525 525 525 525 525 525 525 525Cours Euro/USD 1,30 1,25 1,25 1,25 1,25 1,25 1,25 1,25 1,25 1,25 1,25 1,25Indice COTLOOK "A" 56 60 70 62 65 72 71 68 67 60 69 66
Conclusion: How donnors can follow-up the charter with concrete actions
1. Shifting from Government to Goverment to multi-stakeholders approaches
2. Accepting the discipline of taking/sharing risks specially at the sub-sovereign and private level
3. Putting the promotion of private investment and PPPs as central to their mission
4. Enhancing the « financial toolbox », providing bridges to private sector financing, designing tailored solution, mixing financial engineering and concessionality
5. Reorienting culture, capital & skills
Back to the « limitant factor theory »: What is in the « hand » of the donors community ?
THANK YOU