AFD and KfW consolidate their partnership with a new agreement
Development and cooperation are the foundations of the European unification process - they were already firmly anchored in the Schuman Plan and the Treaty of Rome. In view of the global challenges posed by climate change and sustainable development, they still provide the framework for powerful impetus for shaping Europe through the Franco-German partnership. The two countries have been working together for many years in a spirit of trust – not least through the respective promotional and development banks Agence Française de Développement (AFD) and KfW Group (KfW). We recently launched a major new initiative together: with the “Clean Oceans Initiative”, to which the European Investment Bank has also contributed, we are providing EUR 2 billion over the next five years to reduce plastic waste and the discharge of pollutants into the oceans. Only a short time before this, AFD joined the Blue Action Fund, a foundation set up by KfW for the sustainable use of the world's oceans. And these are just two examples from the recent past that show Franco-German cooperation is alive and well. And far more than a symbolic policy, it continually gives the EU new impetus.
The fight against inequality and poverty, the commitment to education, climate protection and biodiversity requires consistent measures that cannot be delayed. The sustainable development goals pose major challenges for all countries. This is why our two banks are signing a new agreement to step up our strategic and operational partnership.
Common values and goals
In a world in transformation international development cooperation is more important than ever: we share the same values and pursue the same goals; we promote human rights and the rule of law; we are committed to sustainable development, the preservation of our natural diversity and climate change mitigation. And, last but not least, we use the same financing instruments and promote the exchange of experiences and knowledge in the search for the best solutions.
Since its origins AFD, which was founded after the Second World War under General De Gaulle, has been marked by the spirit of the Résistance and a firm commitment to the fight against injustice and discrimination worldwide. Today it is entrusted with the implementation of French development policy, based on its claim to assume responsibility in the world and to play a positive role in shaping international cooperation. KfW is a product of the European Recovery Program and its financing was originally intended to help the destroyed German economy get back on its feet after WWII. International financing was added later, which it mainly handles on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ). Although the history of the two institutions is quite different, they have a similar understanding of our core task on both sides of the Rhine: ultimately both are concerned with improving the economic, social and environmental living conditions of people around the world.
Accomplishing more together
The even closer cooperation we are seeking and that the new agreement will signify serves precisely this aim. And it is based on many years of productive cooperation between AFD and KfW: over the past ten years we have financed joint projects with a total volume of more than EUR 6 billion and worked closely together on strategic issues on the European development agenda.
The aim is to develop this relationship in the future in terms of both quantity and quality: more joint financing and initiatives are planned as well as more intensive staff exchanges between the institutions. Our focus is directed not least of all on Africa, our neighbouring continent, where the “Compact with Africa” initiative and the “Sahel Alliance” already provide the political basis for additional measures. The first is an initiative of the G20 countries; the second is a joint effort by Chancellor Angela Merkel and President Emmanuel Macron in cooperation with twelve countries and partner institutions to improve living conditions in the Sahel with the participation of the G5 Sahel countries. To this end, 600 projects with a total volume of nine billion euros are to be implemented by 2022.
Franco-German stimuli as part of European politics
We also promote cooperation between national development banks in order to accomplish more together: AFD and KfW, for example, play a key role in the IDFC (International Development Finance Club) network. It comprises a total of 23 development banks (three quarters of which come from developing countries and emerging economies), which account for a global commitment volume of more than USD 850 billion annually. The network is particularly active in the fight against climate change. Its members have expressly committed to decarbonising the global economy in the coming decades. Our two banks intend to work very intensively on this issue in the future. We are doing all this within the framework of and in consultation with the EU. The Franco-German initiatives should not be seen as a solo effort, but rather as a reinforcement of the European idea – as part of a common foreign and development policy.
By signing this ambitious partnership agreement, we are now setting out on a new path and at the same time remaining true to ourselves. After all, post-war history has shown that our two countries in the heart of Europe can make a difference if they are in sync. Nearly all the significant progress made by the EU needed harmony between France and Germany. Actively promoting this proven model beyond Europe is therefore a logical consequence of our history – and a coherent response to the challenges of our time.