Download AfDB Group Financial Presentation

2011
Financial Presentation
The African Development Bank Group
Lisbon
2011
Exchange Rates
As at 31 December of each year:
2005: 1 UA = 1 SDR = 1.42927 US Dollar
2006: 1 UA = 1 SDR = 1.50440 US Dollar
2007: 1 UA = 1 SDR = 1.58025 US Dollar
2008: 1 UA = 1 SDR = 1.54027 US Dollar
2009: 1 UA = 1 SDR = 1.56769 US Dollar
2010: 1 UA = 1 SDR = 1.54003 US Dollar
This report has been prepared by the African Development Bank (the “Bank”).
No part of the report may be reproduced in any manner without permission of the Bank.
Financial Presentation
Table of Contents
Introduction ….……………………………………………............................................................. 2
Section 1: African Economic Overview and Outlook .................................................. 3
Drivers of Growth in Africa ….……………………………………………............................................ 4
On the Road to Pre-Crisis Levels ….……………………………………………................................. 5
Regional Disparities ….……………………………………………...................................................... 6
A Brighter Tomorrow ….……………………………………………..................................................... 7
Section 2 : Leveraging our Financial Strength .............................................................. 8
Financial Strength ….……………………………………………......................................................... 9
Risk Capital ….……………………………………………................................................................... 10
Risk Exposure ….……………………………………………............................................................... 11
Prudential Ratios ….……………………………………………........................................................... 12
Income Allocation ….…………………………………………….......................................................... 13
Annual Borrowing Programme ….……………………………………………...................................... 14
Market Issuance ….……………………………………………............................................................ 15
USD Global Benchmark Bond ….……………………………………………......................................
16
Socially Responsible Investments ….……………………………………………................................ 17
Section 3 : Bank Group Operations: An Overview ...................................................... 18
Key Challenges ….……………………………………………............................................................. 19
A Road Map for Africa ….……………………………………………................................................... 20
Infrastructure ….……………………………………………................................................................. 21
Transport ….……………………………………………....................................................................... 22
Energy ….……………………………………………........................................................................... 23
Water & Sanitation (1) ….……………………………………………................................................... 24
Water & Sanitation (2) ….……………………………………………................................................... 25
Good Governance ….……………………………………………......................................................... 26
Agriculture ….……………………………………………..................................................................... 27
Private Sector Operations (1) ….……………………………………………....................................... 28
Private Sector Operations (2) ….……………………………………………....................................... 29
Education ….……………………………………………...................................................................... 30
Climate Change ….……………………………………………............................................................ 31
Knowledge Development ….…………………………………………….............................................. 32
Decentralization ….……………………………………………............................................................ 33
General Capital Increase ….…………………………………………….............................................. 34
ADF Replenishment ….……………………………………………...................................................... 35
Operational Consolidation ….……………………………………………............................................. 36
Conclusion ….…………………………………………….................................................................... 37
Website ….……………………………………………......................................................................... 38
Appendix ….……………………………………………....................................................................... 39
Statement of Income and Expenses ….…………………………………………….............................
40
Balance Sheet Highlights ….……………………………………………..............................................
41
Financial Presentation
African Development Bank
The African Development Bank is pleased to present
its financial and operational performance and
highlights for the year 2010, as well as an overview
of certain recent developments in the Bank Group
and in Africa.
Africa during 2010 began to recover from the
adverse effects of the global financial and economic
crises. While 2009 was a year during which the
Bank Group played its countercyclical role by
substantially scaling up development assistance
to regional member countries facing severe
fiscal constraints, 2010 was a year of operational
consolidation. During 2010, as in prior years, there
was strict and consistent adherence to prudent
financial and risk management policies, to assure
the long-term financial sustainability of the Bank and
its AAA ratings.
The presentation that follows highlights the
operational and financial achievements of the Bank
Group. The first part of the presentation provides a
brief synopsis of the economic outlook for Africa.
Real GDP grew by 4.9% in 2010 against 3.1% in
2009, driven by higher domestic demand, stronger
export revenues and increased FDI, remittances
and ODA flows. GDP growth for Africa is expected
to drop to 3.7% in 2011, due in large part to the
socio-political unrests in certain countries, before
rebounding to 5.8% in 2012. Regional disparities in
growth remain and the benefits of such growth also
remain unevenly distributed, underscoring the need
for more inclusive development.
The second part presents the Bank’s financial
strength and an overview of capital market activities
during 2010. Strong shareholder support, ample
risk bearing capacity, a robust liquidity position and
prudent financial management policies collectively
underpin the Bank’s AAA-standing in the capital
markets. Such standing in turn enhances the
ability to deliver cost-effective funding to support
our development financing activities. The Bank
continued to strengthen its standing with international
investors during the course of the year and raised
cost-effective resources on the global benchmark
market. It successfully launched and implemented
a program of Socially Responsible Investments in
response to increased investors’ demand for such
product.
The presentation concludes with an overview of
the Bank Group’s operational activities. The Bank
Group’s total approvals were maintained above
pre-crisis levels in 2010, following the record
amount of approvals in 2009. Consistent with the
Bank’s selected strategic areas of focus, operations
were substantially oriented towards infrastructure,
thereby helping to address the structural bottlenecks
to Africa’s economic growth. Progress in areas of
clean energy, food security, governance and private
sector development has been appreciable. The
Bank intends to maintain its strategic focus, while at
the same time addressing the urgent need for social
and economic inclusiveness across the continent.
The tripling of the Bank’s authorized capital in 2010
and the substantial twelfth replenishment of the
African Development Fund, both occurring at a time
of serious fiscal constraints in many of the Bank’s
member countries, not only further reinforce the
Bank Group’s capacity to pursue its mandate, but
also represent resounding votes of confidence in
the Bank Group’s capacity to deliver. In partnerships
with existing as well as emerging partners, the Bank
Group is better positioned than ever before to tackle
the challenge of inclusive development.
Charles Boamah
Pierre Van Peteghem
Vice President, Finance
Treasurer
Financial Presentation
2
1
African Economic Overview and Outlook
African Economic Overview and Outlook
Financial Presentation
3
Recovering from the global economic and financial crisis
Recovering from the global economic and financial crisis
Drivers
• 
Global recovery especially in emerging
economies
Main macroeconomic changes in 2010
• 
Higher growth of gross domestic product
• 
Robust domestic demand due to the fiscal
stimulus
• 
Improving current account and fiscal
balance in oil exporting countries
• 
Increased remittances
• 
Higher corporate revenues
• 
Increased official development assistance
and stronger donor mobilization
• 
Faster decrease of inflation, especially in
oil-importing countries
• 
Rebound of trade and commodity prices
African Economic Overview and Outlook
Financial Presentation
4
On the road to pre-crisis levels
On the road to pre-crisis levels
Improved fiscal balance…
2%
4.8%
11.0%
1.9%
-2%
-6%
8.0%
10.4%
10.0%
2.8%
2.5%
Real GDP Growth (%)
Inflation
Fiscal Balance as % of GDP
6%
Return to growth…
Back to single digit inflation…
6.0%
9.0%
7.2%
-3.3%
-5.2%
2005 2006 2007 2008 2009 2010
7.0%
5.0%
6.9%
7.7%
5.9%
2005 2006 2007 2008 2009 2010
... as a result of prudent
fiscal policies and
economic recovery
African Economic Overview and Outlook
...although at higher
levels than before
the crisis
6.5%
5.9%
6.2%
5.5%
4.9%
4.0%
3.1%
2.0%
2005 2006 2007 2008 2009 2010
… yet still below
pre-crisis levels
Financial Presentation
5
Disparities in economic performance in 2010
North Africa
West Africa
GDP
growth
6.7%
GDP
growth
4.6%
Central Africa
East Africa
GDP
growth
4.7%
North Africa:
Fiscal Balance: -2.4% of GDP / Inflation: 7.1%
West Africa:
Fiscal Balance: -6.1% of GDP / Inflation: 10.4%
East Africa:
Fiscal Balance: -3.3% of GDP / Inflation: 9.3%
Central Africa:
Fiscal Balance: 0.5% of GDP / Inflation: 5.5%
Southern Africa: Fiscal Balance: -3.3% of GDP / Inflation: 6.4%
African Economic Overview and Outlook
GDP
growth
6.2%
Southern Africa
GDP
growth
3.3%
Financial Presentation
6
A bright outlook in the face of ongoing challenges
A bright outlook in the face of ongoing challenges
Growth outlook
Main challenges
Rebound of global trade
High import prices for food
and energy
Strengthening of domestic
sectors
High commodity prices
Political and social unrest in
several countries
High unemployment notably
of the youth
Vast infrastructure gap
Support from development
partners
Inclusive Growth
Estimated 3.7% real GDP growth in 2011
5.8% projected in 2012
African Economic Overview and Outlook
Financial Presentation
7
2
Leveraging our Financial Strength
Leveraging our Financial Strength
Financial Presentation
8
Financial strength at the service of Africa
Financial strength at the service of Africa
Strong member support
and franchise value
High capital and risk
bearing capacity
Robust liquidity position
Prudent financial management
and policies
Leveraging our Financial Strength
Financial Presentation
9
Strong capacity to sustain planned business growth
Strong capacity to sustain planned business growth
Utilization: 58% of Risk Capital
Risk Capital
8,000
Loans
(USD mn)
7,000
6,000
5,000
3,468
4,001
3,814
4,002
4,047
Credit Risk
(91%)
Equity Investments
Guarantees
4,000
3,000
2,000
3,230
3,439
3,365
3,431
3,377
1,000
-
2006
2007
Paid-in capital*
2008
2009
Operational
Risk (2%)
Market Risks
Counterparty Risks
External
events/shocks
Failed systems
& processes
Reserves**
* Net of cumulative exchange adjustment on subscriptions
** Net of translation adjustments
•
•
•
2010
Treasury
Risk (7%)
Available Risk Capital: 42%
(as of 31 December 2010)
Sound management of the utilization of risk capital & credit exposures through prudential and operational limits
Sufficient capital buffer to withstand shocks
GCI-VI strengthens the Bank’s capacity to deliver on its mandate
Leveraging our Financial Strength
Financial Presentation
10
Managed risk exposure to safeguard the sustainability of operations
•
•
•
•
•
Credit risks related to lending activities are
mapped to an internal rating scale
Mitigate counterparty credit risk through
minimum credit ratings and exposure limits
and collateral exchange agreements for
derivatives
Prohibited from taking currency risk
Exposure profile
14,000 (USD mn)
12,000
10,000
8,124
8,000
8,849
13,389
9,354
6,000
4,000
2,000
0
2006
2007
Sovereign Portfolio
Minimizing liquidity risk by holding one year of
liquid resources at all times
No direct market exposure and well protected
against interest rate risk
12,432
2008
2009
2010
Non-Sovereign Portfolio
The Bank’s internal credit risk rating scale:
WARR as of 31 December 2010
1
Very Low
Risk
2.3
MTS* Target
Range
3
4
Moderate Risk
10
Very High
Risk
* Medium Term Strategy, 2008-2012
Leveraging our Financial Strength
Financial Presentation
11
Conservative prudential ratios provide confidence to stakeholders
Conservative prudential ratios provides confidence to stakeholders
All of the Bank’s key prudential ratios are well below their limits
Limit (100%)
GCI-VI effect
84%
85%
60%
53%
53%
63%
58%
39%
24%
2009
2010
Gearing
Gearing = Loans (including undisbursed) + Equity
investments and Guarantees / (Unimpaired
subscribed capital + Surplus + Reserves)
Risk Capital Utilisation Rate (RCUR)
2011
Leverage
RCUR = (Used Risk Capital =
(Exposure) x
(Risk capital allocation)) / Total risk capital
Leveraging our Financial Strength
Leverage = Debt / (Paid-in capital + Reserves +
Callable capital of non-borrowing countries rated
A- and above)
Financial Presentation
12
Building reserves while maximizing development impacts
Building reserves while maximizing development impacts
2010 allocation for development initiatives
Allocable income*
500 (USD mn)
471
450
79
411
375
400
363
33
350
300
123
African
Development
Fund
Special Relief Fund
MIC Trust Fund
141
254
169
37
250
56
200
DRC Arrears
Clearance
Mechanism
44
33
359
35
150
251
100
190
165
159
50
Reserves have the first claim on allocable income
2006
2007
2008
2009
Development Initiatives
Surplus
Retained in Reserves
Allocable Income
2010
* Allocable income is the income before distribution adjusted for the unrealized
(gain)/loss on derivatives, FVO** and non FVO borrowings,
the translation gains/loss, and the fair valuation of the macro hedge swaps
** FVO: Fair Value Option
Leveraging our Financial Strength
Financial Presentation
13
A solid capacity to
increased
financial
requirements of the Bank
A meet
solid the
capacity
to meet
the increased
financing requirements of the Bank
Annual borrowing programme
(USD mn)
•
•
Global Debt Issuance Facility
Euro Commercial Paper
Programme
•
•
•
•
•
•
•
USD Global Market
Domestic Markets
African Currency Markets
Private placements
Uridashi
Euro Commercial Paper
Loans
7,545
5,500
6,400
2,800
1,724
1,144
2007
2008
2009
Actual
2010
2011*
Initial
* Limit approved by Board
Leveraging the AAA-rating to raise cost-effective resources
Leveraging our Financial Strength
Financial Presentation
14
Tapping into diversified funding sources
Tapping into diversified funding sources
Issuance by market segment
Uridashi
23.8%
Private
Placements
12.8%
Proven market access
CAD
Loans
2.8%
CHF
BWP
Local
Currency
0.6%
EUR
BRL
GBP
AUD
JPY
3%
ZAR
7%
CHF
2%
ZMK
GHS
CAD &
SEK
2%
HKD
ZAR
Public
60.0%
EUR
37%
USD
JPY
USD
49%
UGX
As of 31 December 2010
TZS
Leveraging our Financial Strength
NGN
As of 31 December 2010
TRY
Swapped to meet disbursements and for asset/
liability management purposes
KES
NZD
SGD
SEK
Financial Presentation
15
A reputable issuer in the USD Global benchmark market
AfDB USD 1 bn 2.5% due March 2016
Distribution by investor type:
Distribution by region:
37%
Fund
managers
15%
Other
1%
24%
Banks
34%
17%
Central
Bank/
Official
Institution
50%
•
•
Americas
Europe
Middle East
11%
11%
Asia
Africa
Priced at midswaps plus 4 basis points (equivalent to US Treasuries +26.6 bps)
Stronger support from African central banks for the Bank’s bonds over the past few years
Leveraging our Financial Strength
Financial Presentation
16
Satisfying individual Japanese investors’ appetite
Satisfying individual Japanese investors’ appetite
for Socially Responsible Investments
for Socially Responsible Investments
NZD 109mn
due Feb 2011
(Clean Energy)
AUD 89mn
due Nov 2013
(Clean Energy)
NZD 48mn
due Nov 2013
(Clean Energy)
AUD 18mn
due Aug 2013
(Green bond)
NZD 20mn
due Aug 2013
(Green bond)
In line with our core operational priorities
BRL 37mn
due 2017
(Clean Energy)
ZAR 1bn
due Aug 2013
(Education)
AUD 10mn
due 2020
(Clean Energy)
AUD 63mn
due Nov 2014
(Water bond)
Direct amount equal to net proceeds to finance projects in respective fields on a best efforts basis
Leveraging our Financial Strength
Financial Presentation
17
3
Bank Group Operations
An Overview
Bank Group Operations: An Overview
Financial Presentation
18
Key challenges of the continent
Key challenges of the continent
Massive infrastructure
deficit
Shallow and fragmented
markets
Gender imbalances
Weak institutions
and governance
Crises and conflicts
Environmental degradation
Nascent private sector
Stiff competition for MICs
in a global market place
Challenges of
climate change
Paucity of skills for a
competitive economy
Food crisis
Ineffective dissemination
of knowledge
AfDB: Taking a strategic perspective
Bank Group Operations: An Overview
Financial Presentation
19
A road map for the Bank at a critical time for Africa
A road map for the Bank at a critical time for Africa
Ambition, realism, deliverables
Core operational priorities -
- impacting broader
development goals -
- whilst mainstreaming key
cross-cutting themes
Infrastructure
Development
Regional Integration
Promoting
Gender Equality
Good Governance
Support to Fragile States
Ecologically Sustainable
Development
Deepening Private
Sector Development
Deeper engagement
in MICs
Combatting
Climate Change
Higher Education,
Technology and
Vocational Training
Agriculture and Rural
Development
Knowledge
Development
Staying focused on core priorities while responding to the unfolding economic landscape
Staying focused on core priorities while responding to the unfolding economic landscape
Bank Group Operations: An Overview
Financial Presentation
20
Building the continent’s infrastructure
Building the continent’s infrastructure
Modern, reliable & affordable infrastructure prioritized
in the national agenda of African countries
Targeting high-impact projects in infrastructure:
• 
Stimulate an investment-friendly environment
• 
Strengthen competitiveness and productivity
• 
Create jobs
• 
Promote sustainable economic growth
• 
Encourage regional integration
• 
Reduce poverty
USD 4 bn representing 70.9% of Bank Group
approvals in 2010
Bank Group Operations: An Overview
Transport
Energy Supply
USD 1.9 bn
Challenges in 2010
exacerbated by the
global crisis
USD 1.4 bn
Leading financier in
the African energy
sector
Water Supply
& Sanitation
Communications
USD 0.6 bn
Developing the
continent’s untapped
water potential
USD 50 mn
Two ICT projects in
Rwanda and Cape
Verde
Financial Presentation
21
Keeping Africa’s transportation on track
Keeping Africa’s transportation on track
•
•
•
•
•
New roads built in predominantly rural areas
Reduced transportation cost
Enhanced accessibility to rural populations
Improved access to markets
Raising income levels of rural communities
Transport development empowers
the agricultural sector
Tangiers-Marrakech Railroad Capacity
Increase Project in Morocco
Expected Outcomes:
Improved rail transportation competitiveness through
increased rail travel supply, population mobility and
employment
Total Cost: USD 578 mn
AfDB Loan: USD 393 mn
•
Largest project ever financed by the Bank
in Morocco
Key transport projects in 2010
National road projects in
Benin, Burundi, Ghana,
Kenya, Mozambique,
Senegal, Togo and Tunisia
Air transportation
projects in DRC and
Senegal
Multinational road
projects in Zambia,
Malawi and
Mozambique
Railroad infrastructure
projects in South
Africa and Morocco
The Bank Group helped 15.9 mn people receive improved access to transport between 2008-2010
Bank Group Operations: An Overview
Financial Presentation
22
Lead financier in energy
Lead financier in energy
Key energy sector operations in 2010
Cabeolica Wind Power
Project in Cape Verde
Electricity Transmission
System in Ethiopia
Suez Thermal Power
Plant in Egypt
Power Transmission
System in Kenya
Semi-Urban and Rural
Electrification in DRC
Dibamba Power Project
in Cameroon
Cabeolica Wind Power Project in Cape Verde
Expected Outcomes:
•  Utilize the island’s considerable wind and solar
resources
•  Increase renewable sources of energy to 50% by
2020
•  Increased energy capacity by 25MW
•  Fall in greenhouse gas emissions
•  Benefit from the Clean Development Mechanism
•  Reduced dependence on fossil fuel use
Iringa-Shinyanga
Transmission Line in
Tanzania
• 
• 
• 
• 
Over USD 1.35 bn for 14 new projects in 2010
Supporting low-carbon development
USD 639 mn in clean energy investments expected to triple
by 2012
Dealing with Africa’s energy deficit
The Bank Group helped 16.5 mn people gain better reach to power between 2008-2010
Bank Group Operations: An Overview
Financial Presentation
23
Sourcing health, food security and growth through water
Sourcing health, food security and growth through water
Only 20% of Africa’s irrigation
and 6% of its hydropower
potentials developed
Water storage capacity less
than 100 m3/person vs. 3,500
m3 in Europe, and 6,000 m3 in
the US
The Bank’s focus
• 
• 
• 
• 
• 
Focus on poorest 65% of rural population
Increase drinking water supply and sanitation
financing
Water resources management:
•  Reduce levels of unaccounted water
•  Cross border water resource management
Capacity building
Policy reform programs
Less than 5% of agricultural
land irrigated
The Lake Victoria water and sanitation program
• 
USD 116 mn grant targeting 15 towns in Kenya,
Uganda, Tanzania, Rwanda, Burundi
• 
85% of households with access to water within
250 meters by 2015
• 
60% increase in management of solid waste
• 
50% of public places have sanitary facilities
8.5 mn people with new or improved access to water and sanitation over 2008-2010
Bank Group Operations: An Overview
Financial Presentation
24
Africa is behind all other regions in developing its hydro-potential
= 500 TWh
Economic Potential (TWh/year)
Hydropower production in 2004 (TWh)
OECD North America
Brazil
Other Latin America
Bank Group Operations: An Overview
OECD Europe
Transition economies
Africa
Russia
Middle East
India
China
Rest of developing Asia
OECD Pacific
Financial Presentation
© AICD
25
Advocating for good governance across Africa
Advocating for good governance across Africa
Sharpened focus
Improve the business-enabling environment
and investment climate for private
sector-led growth
Strengthen policies and institutions for more
effective, transparent, and accountable
management of public finances
Strategic direction & Governance Action Plan
•
•
•
•
•
African countries have the prime responsibility for improving their own
governance to fight against poverty
Sequence and tailor governance-related operations to country circumstance
Consider corruption as a symptom of broader governance challenges
Pursue a strategy of constructive and systemic engagement
Strengthen country systems rather than bypass them
Strengthening country
systems & capacities
Budgeting
and auditing systems
and standards
(Benin, Togo, Tanzania)
Improving governance at
sector level
Extractive Industries
Transparency Initiative
(Liberia, Mozambique,
Sierra Leone, Tanzania)
Bank Group Operations: An Overview
Supporting Regional initiatives
Investment Climate Facility
to improve:
• Property rights
• Financial and labor markets
• Obstacles to doing business
(corruption...)
Financial Presentation
26
Agriculture supports 80% of African livelihoods
Agriculture supports 80% of African livelihoods
Rising
transport & fertilizer
costs
Depletion of
food stocks
Agriculture Sector Strategy 2010-2014
1. Development of
Agricultural & Rural
Infrastructure
Sustainable food
security
2. Renewable Natural
Resource Management
Agricultural
productivity
Investments in:
Irrigation
Investment
AgroProcessing
Marketing networks
(incl. Transport &
Storage)
Increase in
food prices
Up to 40% of post-harvest produce lost
annually before reaching the consumer
Markala Sugar Project in Mali
Expected Outcomes:
• 
Growth in agricultural sector from 5.0% to 5.4%
• 
8 times increase in farmer income
• 
Job creation (8,000 directly, 32,000 indirectly)
• 
Increased energy generation by 30 MW
• 
165,800 tons of carbon sequestration p.a.
First public–private partnership
operation with Mali in
the agriculture sector
Between 2008-2010… 239,915 ha of land with improved water management … 11,319,419 people benefited…
six-fold increase in rice production to over 1 mn metric tons across eight West African countries
Bank Group Operations: An Overview
Financial Presentation
27
A partner of choice to Africa’s private sector
A partner of choice to Africa’s private sector
Expected outcomes of private
sector projects approved during
2009-2010
A selective financier
focusing on strong
additionality without
crowding out
commercial banks
Playing a lead
arranger role and
catalyzing additional
investment into
the continent
Increases project
efficiency while
acting as a partner
by sharing ground
risks
Paves the way for
further private sector
growth by improving the
business environment
Bank Group Operations: An Overview
Significant foreign exchange earnings/savings
for the respective countries of the projects
306,600 jobs created (temporary and
permanent)
Including credit/business opportunities
to be provided to 52,000 women-led
businesses
USD 15 bn in taxes for governments
Financial Presentation
28
Private sector operations, an engine to spur economic growth
Trending upwards
2,000
Private sector operations in 2010
(USD mn)
Finance
42%
Industry
14%
1,500
Energy Supply
11%
1,000
Communication
2%
500
-
2006
Loans
2007
2008
Equity Investments
2009
Guarantees
Balanced interventions between Low and
Middle Income Countries
Bank Group Operations: An Overview
Transport
29%
Agriculture
2%
2010
Selected private sector approvals in 2010
Transnet,
South Africa
(USD 418 mn)
Egyptian Refining
Company
(USD 226 mn)
Blaise Diagne
Airport, Senegal
(USD 92 mn)
Satellite 03B
(USD 49 mn)
Africa Agriculture
Fund
(USD 41 mn)
GEF Africa
Forestry Fund
(USD 20 mn)
Financial Presentation
29
Investing in human capital integral to securing Africa’s future
Investing in human capital integral to securing Africa’s future
Key education projects in 2010
Developing human capital through effective
Higher Education, Science & Technology (HEST)
• Socioeconomic advancement and integration into
the world economy
• Capacity building for R+D and innovation
• Economic growth and development
Comprehensive Technical and Vocational
Education & Training (TVET) innovation programs
• Addresses the evolving needs of labor markets
in African countries
• Improved employment opportunities and life chances
Technical/
Vocational
Training Project
in Niger
Regional ICT
Center of
Excellence in
Rwanda
Higher
Education
Support Project
in Eritrea
Education
Quality and
TVET in
Botswana
3.9 mn textbooks and teaching materials supplied and 7,452 classrooms and
educational support facilities built or rehabilitated between 2008-2010
Bank Group Operations: An Overview
Financial Presentation
30
Leveraging resources
resources for
for climate
climate resilience
resilience and
and
Leveraging
low carbon
carbon development
development
low
Engagement in Climate Investment Funds
The Bank is also in the process
of establishing the USD 145 mn
ClimDev-Africa Special Fund
and has been asked to host the
Africa Green Fund
Clean Technology
Fund
USD 625 mn*
•
Clean Technology Program
Strategic Climate
Fund
USD 275 mn*
•
•
•
Pilot Program on Climate Resilience
Forest Investment Program
Scaling up Renewable Energy in Low Income Countries
Africa Carbon
Support Program
•
Capacity building program that assists African countries access
carbon finance (USD 1.8 mn)
Global Environment
Facility
•
•
Funding to help projects achieve global environmental benefits
USD 25 mn secured for African countries
Sustainable Energy
Fund for Africa
•
Supports investment in renewable energy generation and energy efficiency
SMEs (operational in 2011)
•
Aims at providing seed-capital, post-2012 guarantees and address debt
financing barriers to stimulate private sector investment in CDM projects in
Africa (design stage)
Africa Carbon Facility
* Estimates
Bank Group Operations: An Overview
Financial Presentation
31
Sharing knowledge for accelerated developmental awareness
Sharing knowledge for accelerated developmental awareness
Knowledge development: Flagship publications
African Economic Outlook
•  Comparative economic prospects for
African countries
Intellectual leadership for the continent
Heralded Africa’s voice at key international fora
• 
• 
Third Korea–Africa Economic Cooperation meeting
G20 Summit
Data Portal
African Development Report
• 
• 
Updates on key macroeconomic and
sectoral developments
Analysis of topics critical to Africa’s
development
African Competitiveness Report
• 
Short term trends in the world economy,
the commodity markets, and the
African economies
Bank Group Operations: An Overview
• 
• 
• 
• 
Publicly available
Web-based
Direct and easy access
Wide range of development
data (Over 800 indicators)
Organised workshops (1,395 attendees) aimed at
policymakers to help them design and implement
economic policies, and engage in policy dialogue
Financial Presentation
32
Enhanced field presence: delivering expertise locally
Tunisia
(TRA)
Morocco
Algeria
Expand presence in Fragile States
4 new field offices approved:
• Burundi
• Central African Republic
• Liberia
• Togo
Relevance,
efficiency, and
expertise through the
decentralization
process
Egypt
Mali
Chad
Senegal
Sierra
Leone
Sudan
Burkina
Nigeria
Liberia Ivory
Coast
(HQ)
Togo
Ghana
Consolidate regional capacity
through knowledge and
expertise building
26 Host Country Agreements for the targeted
field offices signed
Ethiopia
CAR
Cameron
Uganda
Kenya
Rwanda
Gabon
DRC
Tanzania
Burundi
Angola
Malawi
Zambia
Madagascar
Zimbabwe
Delegation of authority to field offices to negotiate, sign and
administer loans, manage portfolios, supervise projects
Mozambique
South Africa
Bank Group Operations: An Overview
Financial Presentation
33
Landmark General Capital Increase
200% capital increase with 6% paid-in portion
raising the capital to around USD 100 bn
10,000
Sixth and largest capital
increase of the institution
2010
After Capital Increase
(USD mn)
8,000
6,000
7,676
Demonstrated strong
shareholders support
4,000
2,000
-
3,634
Paid-in Capital
100,000
Increased lending in line with
strategic priorities
80,000
93,692
60,000
40,000
20,000
-
33,187
Capacity to meet increased
level of future demand and
support the business
growth plan
-
Callable Capital
Reinforce the Bank’s franchise value, key
prudential ratios and AAA credit rating
Note: Figures before GCI-VI include the temporary callable capital offered by Canada and Korea (UA 1.83 bn / USD 2.81 bn) which is retired after GCI-VI
Bank Group Operations: An Overview
Financial Presentation
34
Renewed confidence from the donor community
Renewed confidence from the donor community
for the Bank Group’s mandate
for the Bank Group’s mandate
ADF replenishments since 1999
Principal donor and partner for regional integration
Leadership and innovation in engagements with
fragile states
9.5
(USD bn)
8.9
Partial risk guarantees introduced to stimulate
additional investment
Scale up investments in infrastructure while
putting the continent on a low-carbon, climateresilient growth path
5.4
3.6
ADF-8
Bank Group Operations: An Overview
4.1
ADF-9
ADF-10
ADF-11
Financial Presentation
ADF-12
35
Operational consolidation
Bank Group total approvals maintained above
pre-crisis levels
Bank Group Loan & Grant Approvals by Sector
2010
14,000 (USD mn)
12,000
3,805
10,000
Multisector
8%
Finance
9%
8,000
Industry
5%
Social
5%
Agriculture
2%
6,000
4,000
2,000
-
2,565
2,184
8,785
2,324
1,572
2006
2,639
2,783
2007
2008
ADB
2,243
3,975
2009
Infrastructure
71%
2010
ADF
• Responding to the global crisis • Record amount of approvals in 2009 • 16% increase in lending compared to 2008
Bank Group Operations: An Overview
Financial Presentation
36
At the forefront of the global development finance architecture
At the forefront of the global development finance architecture
Africa’s preferred partner
Important
resource
mobilisation
platform for
Africa
Leveraging
financial strength,
advocacy and
convening
power
Key provider of
private sector
financing on
the continent
Targeted
interventions and
complementarities
with donors
Positioned better than ever to tackle the challenge of inclusive development
Enhanced capacity to increase
exposure to Low Income
Countries
Bank Group Operations: An Overview
Strengthening development
activities for the poor in Middle
Income Countries
Financial Presentation
37
More information on the Bank Group is available at www.afdb.org
More information on the Bank Group is available at www.afdb.org
Bank Group Operations: An Overview
• 
Financial and Operational
Analysis
• 
Documentation for Debt
Programs
• 
Rating Agency Reports
• 
Financial Products
for Borrowers
• 
Annual Report
• 
Investor Contact:
[email protected]
Financial Presentation
38
4
Appendix
Appendix
Financial Presentation
39
AfDB: Income Statement (UA million)
As at 31 December 2010
2010
2009
2008
2007
2006
Income from Loans
293.36
288.24
352.28
341.94
329.03
Income from Investments and Related Derivatives
219.22
222.96
202.88
231.71
213.82
6.74
7.68
9.29
4.97
-
519.32
518.88
564.45
578.62
542.85
(303.04)
(306.32)
(251.83)
(268.02)
(245.41)
Net Interest on Borrowing Related Derivatives
126.27
73.28
(65.79)
(62.71)
(35.14)
Unrealized Gains/(Losses) on Fair Valued Borrowings
and Related Derivatives
(27.61)
17.38
12.43
21.24
10.67
Unrealized Gains/(Losses) on Non-Fair Valued Borrowings and Others
(13.33)
(20.30)
(16.68)
34.77
21.07
(26.76)
(11.29)
163.28
69.96
(51.69)
Provision for Impairment on Equity Investments
(0.90)
(2.32)
(18.46)
(0.53)
(34.75)
Provision for Impairment on Investments
18.58
3.39
(38.13)
-
-
4.87
19.63
(9.17)
(8.90)
4.10
(1.73)
7.34
18.65
7.32
23.74
Net Operational Income
295.66
299.67
358.75
371.75
235.44
Administrative Expenses
(75.00)
(63.06)
(46.78)
(42.22)
(36.86)
(5.20)
(5.37)
(6.23)
Operational Income and Expenses
Income from Others Debt Securities
Total Income from Loans and Investments
Interest and Amortized Issuance Costs
Provision for Impairment on Loan Principal and Charges Receivables
Translation Gains/(Losses)
Other Income
Depreciation – Property, Equipment and Intangible Assets
(4.59)
(4.68)
Sundry (Expenses)/Gains
(2.41)
(0.77)
(2.11)
(0.50)
1.68
Total Other Expenses
(82.00)
(68.51)
(54.09)
(48.09)
(41.41)
Income Before Distributions Approved by the Board of Governors
213.66
231.16
304.66
323.67
194.03
(146.37)
(162.68)
(257.30)
(119.90)
(139.20)
67.30
68.48
47.36
203.77
54.83
Distributions of Income Approved by the Board of Governors
Net Income for the year
1 UA = 1 SDR = 1.50440 USD (2006) = 1.58025 USD (2007) = 1.54027 USD (2008) = 1.56769 USD (2009) = 1.54003 USD (2010)
Appendix
Financial Presentation
40
AfDB: Balance sheet highlights (UA million)
As at 31 December 2010
Assets
Due from Banks
Demand Obligations
Treasury Investments
Derivative Assets
Non-Negotiable Instruments on Account of Capital
Accounts Receivable
Outstanding Loans
Accumulated Provision for Impairment on Loans
Equity Participations, Net
Other Debt Securities
Other Assets
Liabilities, Capital and Reserves
Accounts Payable
Securities Sold Under Agreements to
Repurchase and Payable for Cash Collateral Received
Derivative Liabilities
Borrowings
Capital Subscriptions Paid
Cumulative Exchange Adjustment on Subscriptions
Reserves
2010
2009
2008
2007
2006
395.72
3.80
7,433.53
1,421.48
4.62
1,341.66
8,284.46
(105.67)
272.24
79.75
12.69
318.83
3.80
7,412.25
764.00
8.19
924.16
7,538.20
(101.92)
234.48
70.81
11.89
592.64
3.80
4,575.76
736.09
11.86
649.01
5,834.62
(102.64)
188.78
68.80
12.23
95.53
3.80
5,328.53
425.34
15.39
570.88
5,540.09
(196.02)
189.25
94.62
15.03
129.33
3.80
6,093.36
273.31
20.38
600.97
5,290.95
(214.18)
119.12
14.96
19,144.29
17,184.69
12,570.95
12,082.44
12,332.00
2,015.04
1,385.68
843.12
584.34
648.96
-
-
-
-
877.83
328.30
477.12
360.30
591.05
481.94
11,980.57
2,355.68
(162.57)
2,627.28
10,580.64
2,350.26
(161.97)
2,552.96
6,707.28
2,345.81
(161.03)
2,475.47
6,198.87
2,336.46
(160.08)
2,531.80
5,870.47
2,303.06
(155.74)
2,305.48
19,144.29
17,184.69
12,570.95
12,082.44
12,332.00
1 UA = 1 SDR = 1.50440 USD (2006) = 1.58025 USD (2007) = 1.54027 USD (2008) = 1.56769 USD (2009) = 1.54003 USD (2010)
Appendix
Financial Presentation
41
Notes
Financial Presentation
Notes
Financial Presentation
Notes
Financial Presentation
African Development Bank Group
13 Avenue du Ghana
B.P. 323
1002 Tunis Belvedère
Tunisia
Tel: (+216)71 333 511 / 71 103 450
Fax: (+216)71 330 632
www.afdb.org