2011 Financial Presentation LISBON The African Development Bank Group
2011Financial Presentation
LisbonThe African Development Bank Group
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 Dollar2007: 1 UA = 1 SDR = 1.58025 US Dollar2008: 1 UA = 1 SDR = 1.54027 US Dollar2009: 1 UA = 1 SDR = 1.56769 US Dollar2010: 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
Financial Presentation
Table of ContentsIntroduction ….……………………………………………............................................................. 2
Section 1: African Economic Overview and Outlook .................................................. 3
Drivers of Growth in Africa ….……………………………………………............................................ 4On the Road to Pre-Crisis Levels ….……………………………………………................................. 5Regional Disparities ….……………………………………………...................................................... 6A Brighter Tomorrow ….……………………………………………..................................................... 7
Section 2 : Leveraging our Financial Strength .............................................................. 8
Financial Strength ….……………………………………………......................................................... 9Risk Capital ….……………………………………………................................................................... 10Risk Exposure ….……………………………………………............................................................... 11Prudential Ratios ….……………………………………………........................................................... 12Income Allocation ….…………………………………………….......................................................... 13Annual Borrowing Programme ….……………………………………………...................................... 14Market Issuance ….……………………………………………............................................................ 15USD Global Benchmark Bond ….……………………………………………...................................... 16Socially Responsible Investments ….……………………………………………................................ 17 Section 3 : Bank Group Operations: An Overview ...................................................... 18Key Challenges ….……………………………………………............................................................. 19A Road Map for Africa ….……………………………………………................................................... 20Infrastructure ….……………………………………………................................................................. 21Transport ….……………………………………………....................................................................... 22Energy ….……………………………………………........................................................................... 23Water & Sanitation (1) ….……………………………………………................................................... 24Water & Sanitation (2) ….……………………………………………................................................... 25Good Governance ….……………………………………………......................................................... 26Agriculture ….……………………………………………..................................................................... 27Private Sector Operations (1) ….……………………………………………....................................... 28Private Sector Operations (2) ….……………………………………………....................................... 29Education ….……………………………………………...................................................................... 30Climate Change ….……………………………………………............................................................ 31Knowledge Development ….…………………………………………….............................................. 32Decentralization ….……………………………………………............................................................ 33General Capital Increase ….…………………………………………….............................................. 34ADF Replenishment ….……………………………………………...................................................... 35Operational Consolidation ….……………………………………………............................................. 36Conclusion ….…………………………………………….................................................................... 37Website ….……………………………………………......................................................................... 38Appendix ….……………………………………………....................................................................... 39Statement of Income and Expenses ….……………………………………………............................. 40Balance Sheet Highlights ….…………………………………………….............................................. 41
Financial Presentation 2
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
African Development Bank
Financial PresentationAfrican Economic Overview and Outlook 3
1 African Economic Overview and Outlook
Financial PresentationAfrican Economic Overview and Outlook 4
Recovering from the global economic and financial crisisRecovering from the global economic and financial crisis
Main macroeconomic changes in 2010 Drivers
• Global recovery especially in emerging economies
• Robust domestic demand due to the fiscal
stimulus
• Increased remittances
• Increased official development assistance and stronger donor mobilization
• Rebound of trade and commodity prices
• Higher growth of gross domestic product
• Improving current account and fiscal
balance in oil exporting countries
• Higher corporate revenues
• Faster decrease of inflation, especially in oil-importing countries
Financial PresentationAfrican Economic Overview and Outlook 5
On the road to pre-crisis levelsOn the road to pre-crisis levels
...although at higher levels than before
the crisis
... as a result of prudent fiscal policies and economic recovery
… yet still below pre-crisis levels
5.9%
6.2%
6.5%
5.5%
3.1%
4.9%
2.0%
4.0%
6.0%
8.0%
2005 2006 2007 2008 2009 2010
Real GDP Growth (%)
Return to growth…
2.5%
4.8%
1.9%
2.8%
-5.2%
-3.3%
-6%
-2%
2%
6%
2005 2006 2007 2008 2009 2010
Fiscal Balance as % of GDP
Improved fiscal balance…
7.2%
5.9%
6.9%
10.4% 10.0%
7.7%
5.0%
7.0%
9.0%
11.0%
2005 2006 2007 2008 2009 2010
Inflation
Back to single digit inflation…
Financial PresentationAfrican Economic Overview and Outlook 6
Disparities in economic performance in 2010
Central Africa East Africa
Southern Africa
West Africa
North Africa
GDP growth
4.7% GDP
growth 6.2%
GDP growth
3.3%
GDP growth
6.7%
GDP growth
4.6%
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%
Financial PresentationAfrican Economic Overview and Outlook 7
A bright outlook in the face of ongoing challenges
Growth outlook
Estimated 3.7% real GDP growth in 2011 5.8% projected in 2012
Support from development partners
Rebound of global trade
Strengthening of domestic sectors
High commodity prices
High import prices for food and energy
Political and social unrest in several countries
High unemployment notably of the youth
Main challenges
Vast infrastructure gap
Inclusive Growth
A bright outlook in the face of ongoing challenges
Financial PresentationLeveraging our Financial Strength 8
2 Leveraging our Financial Strength
Financial PresentationLeveraging our Financial Strength 9
Financial strength at the service of Africa
High capital and risk bearing capacity
Strong member support and franchise value
Financial strength at the service of Africa
Robust liquidity position Prudent financial management
and policies
Financial PresentationLeveraging our Financial Strength 10
Strong capacity to sustain planned business growth
Counterparty Risks
Strong capacity to sustain planned business growth Utilization: 58% of Risk Capital Risk Capital
** Net of translation adjustments * Net of cumulative exchange adjustment on subscriptions
Loans
Equity Investments
Guarantees
External events/shocks
Failed systems & processes
Market Risks
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
Credit Risk (91%)
Treasury Risk (7%)
Operational Risk (2%)
3,230 3,439 3,365 3,431 3,377
3,468 4,001 3,814 4,002 4,047
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
2006 2007 2008 2009 2010
(USD mn)
Paid-in capital* Reserves**
Financial PresentationLeveraging our Financial Strength 11
Managed risk exposure to safeguard the sustainability of operations
• Credit risks related to lending activities are mapped to an internal rating scale
Exposure profile
The Bank’s internal credit risk rating scale: WARR as of 31 December 2010
1 Very Low
Risk
10 Very High
Risk
3 4 Moderate Risk
MTS* Target Range 2.3
* Medium Term Strategy, 2008-2012
• Mitigate counterparty credit risk through minimum credit ratings and exposure limits and collateral exchange agreements for derivatives
• Prohibited from taking currency risk
• Minimizing liquidity risk by holding one year of liquid resources at all times
• No direct market exposure and well protected against interest rate risk
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2006 2007 2008 2009 2010
(USD mn)
Sovereign Portfolio Non-Sovereign Portfolio
8,849
12,432
13,389
9,354 8,124
Financial PresentationLeveraging our Financial Strength 12
Conservative prudential ratios provide confidence to stakeholdersConservative prudential ratios provides confidence to stakeholders
All of the Bank’s key prudential ratios are well below their limits
Gearing = Loans (including undisbursed) + Equity investments and Guarantees / (Unimpaired subscribed capital + Surplus + Reserves)
RCUR = (Used Risk Capital = (Exposure) x (Risk capital allocation)) / Total risk capital
Leverage = Debt / (Paid-in capital + Reserves + Callable capital of non-borrowing countries rated A- and above)
Limit (100%)
53% 53%
24%
60% 58% 63%
85% 84%
39%
2009 2010 2011
Gearing Risk Capital Utilisation Rate (RCUR) Leverage
GCI-VI effect
Financial PresentationLeveraging our Financial Strength 13
Building reserves while maximizing development impactsBuilding reserves while maximizing development impacts
Allocable income* 2010 allocation for development initiatives
Special Relief Fund
DRC Arrears Clearance
Mechanism
MIC Trust Fund
African Development
Fund
* 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
165
359
251
190 159
33
33
37
44
35
56
79
123
141 169 254
471
411 375 363
-
50
100
150
200
250
300
350
400
450
500
2006 2007 2008 2009 2010
(USD mn)
Development Initiatives Surplus
Retained in Reserves Allocable Income
Reserves have the first claim on allocable income
Financial PresentationLeveraging our Financial Strength 14
A solid capacity to meet the increased financial requirements of the BankA solid capacity to meet the increased financing requirements of the Bank
Annual borrowing programme
* Limit approved by Board
Leveraging the AAA-rating to raise cost-effective resources
1,144 1,724
7,545
2,800
6,400
2007 2008 2009 2010 2011*
(USD mn)
Actual Initial
5,500
• USD Global Market • Domestic Markets • African Currency Markets • Private placements • Uridashi • Euro Commercial Paper • Loans
• Global Debt Issuance Facility • Euro Commercial Paper
Programme
Financial PresentationLeveraging our Financial Strength 15
Tapping into diversified funding sources
USD 49%
EUR 37%
JPY 3%
ZAR 7%
CHF 2% CAD &
SEK 2%
Tapping into diversified funding sources Issuance by market segment Proven market access
Swapped to meet disbursements and for asset/liability management purposes
USD
EUR CHF
GBP
AUD
ZAR
JPY
HKD
SGD
CAD BWP
GHS
NGN TZS
KES
NZD
UGX
ZMK
TRY
BRL
SEK
Public 60.0%
Uridashi 23.8%
Private Placements
12.8%
Loans 2.8% Local
Currency 0.6%
As of 31 December 2010 As of 31 December 2010
Financial PresentationLeveraging our Financial Strength 16
A reputable issuer in the USD Global benchmark market
• 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
Distribution by investor type:
AfDB USD 1 bn 2.5% due March 2016
Distribution by region:
Central Bank/ Official
Institution 50%
Banks 34%
Fund managers
15% Other 1%
37%
24%
17%
11% 11%
Americas Europe Middle East Asia Africa
Financial PresentationLeveraging our Financial Strength 17
Satisfying individual Japanese investors’ appetite for Socially Responsible InvestmentsSatisfying individual Japanese investors’ appetite for Socially Responsible Investments
In line with our core operational priorities
Direct amount equal to net proceeds to finance projects in respective fields on a best efforts basis
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)
NZD 109mn due Feb 2011
(Clean Energy)
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)
Financial PresentationBank Group Operations: An Overview 18
3 Bank Group Operations
An Overview
Financial PresentationBank Group Operations: An Overview 19
Key challenges of the continent
Massive infrastructure deficit
Weak institutions and governance
Nascent private sector
Paucity of skills for a competitive economy
Food crisis
Stiff competition for MICs in a global market place
Crises and conflicts
Shallow and fragmented markets
Gender imbalances
Environmental degradation
Challenges of climate change
Ineffective dissemination of knowledge
AfDB: Taking a strategic perspective
Key challenges of the continent
Financial PresentationBank Group Operations: An Overview 20
A road map for the Bank at a critical time for AfricaA road map for the Bank at a critical time for Africa
Infrastructure Development
Good Governance
Deepening Private Sector Development
Higher Education, Technology and
Vocational Training
Agriculture and Rural Development
Deeper engagement in MICs
Support to Fragile States
Regional Integration Promoting
Gender Equality
Ecologically Sustainable Development
Combatting Climate Change
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
Ambition, realism, deliverables
Core operational priorities - - whilst mainstreaming key
cross-cutting themes - impacting broader development goals -
Financial PresentationBank Group Operations: An Overview 21
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
Modern, reliable & affordable infrastructure prioritized
in the national agenda of African countries
Building the continent’s infrastructure
USD 0.6 bn
Developing the continent’s untapped
water potential
Water Supply & Sanitation
USD 1.4 bn
Leading financier in the African energy
sector
Energy Supply
USD 1.9 bn
Challenges in 2010 exacerbated by the
global crisis
Transport
USD 50 mn
Two ICT projects in Rwanda and Cape
Verde
Communications
Building the continent’s infrastructure
Financial PresentationBank Group Operations: An Overview 22
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
National road projects in Benin, Burundi, Ghana,
Kenya, Mozambique, Senegal, Togo and Tunisia
Multinational road projects in Zambia,
Malawi and Mozambique
Air transportation projects in DRC and
Senegal
Railroad infrastructure projects in South
Africa and Morocco
Keeping Africa’s transportation on track
The Bank Group helped 15.9 mn people receive improved access to transport between 2008-2010
Key transport projects in 2010
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
Financial PresentationBank Group Operations: An Overview 23
Lead financier in energy
Suez Thermal Power Plant in Egypt
Semi-Urban and Rural Electrification in DRC
Iringa-Shinyanga Transmission Line in
Tanzania
Electricity Transmission System in Ethiopia
Power Transmission System in Kenya
Dibamba Power Project in Cameroon
Cabeolica Wind Power Project in Cape Verde
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
• 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
Key energy sector operations in 2010
The Bank Group helped 16.5 mn people gain better reach to power between 2008-2010
Lead financier in energy
Financial PresentationBank Group Operations: An Overview 24
Sourcing health, food security and growth through water
The Bank’s focus
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
Sourcing health, food security and growth through water
• 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
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
8.5 mn people with new or improved access to water and sanitation over 2008-2010
Financial PresentationBank Group Operations: An Overview 25
Africa is behind all other regions in developing its hydro-potential
= 500 TWh
Economic Potential (TWh/year)Hydropower production in 2004 (TWh)
OECD North AmericaBrazilOther Latin America
OECD EuropeTransition economiesAfrica
RussiaMiddle EastIndia
ChinaRest of developing AsiaOECD Paci�c © AICD
Financial PresentationBank Group Operations: An Overview 26
Advocating for good governance across AfricaAdvocating for good governance across Africa
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
Supporting Regional initiatives Investment Climate Facilityto improve: • Property rights • Financial and labor markets • Obstacles to doing business
(corruption...)
Strengthening country systems & capacities
Improving governance at sector level
Budgeting and auditing systems and standards (Benin, Togo, Tanzania)
Extractive Industries Transparency Initiative (Liberia, Mozambique, Sierra Leone, Tanzania)
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
Sharpened focus
Financial PresentationBank Group Operations: An Overview 27
Agriculture supports 80% of African livelihoods
Increase in food prices
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
Agriculture Sector Strategy 2010-2014
1. Development of Agricultural & Rural
Infrastructure
2. Renewable Natural Resource Management
Agricultural productivity
Irrigation Investment
Agro-Processing
Marketing networks (incl. Transport &
Storage)
Sustainable food security
Investments in:
Up to 40% of post-harvest produce lost annually before reaching the consumer
Depletion of food stocks
Rising transport & fertilizer
costs
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
Agriculture supports 80% of African livelihoods
Financial PresentationBank Group Operations: An Overview 28
A partner of choice to Africa’s private sectorA partner of choice to Africa’s private sector
Expected outcomes of private sector projects approved during
2009-2010
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
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
Playing a lead arranger role and
catalyzing additional investment into
the continent
A selective financier focusing on strong
additionality without crowding out
commercial banks
Financial PresentationBank Group Operations: An Overview 29
Private sector operations, an engine to spur economic growth
Trending upwards
Selected private sector approvals in 2010
Egyptian Refining Company
(USD 226 mn)
Private sector operations in 2010
Balanced interventions between Low and Middle Income Countries
GEF Africa Forestry Fund (USD 20 mn)
Africa Agriculture Fund
(USD 41 mn)
Transnet, South Africa
(USD 418 mn)
Satellite 03B (USD 49 mn)
Blaise Diagne Airport, Senegal
(USD 92 mn)
-
500
1,000
1,500
2,000
2006 2007 2008 2009 2010
(USD mn)
Loans Equity Investments Guarantees
Industry 14%
Energy Supply 11%
Agriculture 2% Transport
29%
Communication 2%
Finance 42%
Financial PresentationBank Group Operations: An Overview 30
Investing in human capital integral to securing Africa’s futureInvesting in human capital integral to securing Africa’s future
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
Key education projects in 2010
Higher Education
Support Project in Eritrea
Education Quality and
TVET in Botswana
Technical/ Vocational
Training Project in Niger
Regional ICT Center of
Excellence in Rwanda
3.9 mn textbooks and teaching materials supplied and 7,452 classrooms and educational support facilities built or rehabilitated between 2008-2010
Financial PresentationBank Group Operations: An Overview 31
Leveraging resources for climate resilience and low carbon development
Engagement in Climate Investment Funds
• Pilot Program on Climate Resilience • Forest Investment Program • Scaling up Renewable Energy in Low Income Countries
• Capacity building program that assists African countries access carbon finance (USD 1.8 mn)
• Funding to help projects achieve global environmental benefits • USD 25 mn secured for African countries
• 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)
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 Program
* Estimates
Clean Technology Fund
USD 625 mn* Strategic Climate
Fund USD 275 mn*
Africa Carbon Support Program
Global Environment Facility
Sustainable Energy Fund for Africa
Africa Carbon Facility
Leveraging resources for climate resilience and low carbon development
Financial PresentationBank Group Operations: An Overview 32
Knowledge development: Flagship publications Intellectual leadership for the continent
• Comparative economic prospects for African countries
• Updates on key macroeconomic and sectoral developments
• Analysis of topics critical to Africa’s development
• Short term trends in the world economy, the commodity markets, and the
African economies
African Economic Outlook
African Development Report
African Competitiveness Report
Heralded Africa’s voice at key international fora
• Third Korea–Africa Economic Cooperation meeting • G20 Summit
Organised workshops (1,395 attendees) aimed at
policymakers to help them design and implement economic policies, and engage in policy dialogue
Data Portal
Sharing knowledge for accelerated developmental awareness
• Publicly available • Web-based
• Direct and easy access
• Wide range of development data (Over 800 indicators)
Sharing knowledge for accelerated developmental awareness
Financial PresentationBank Group Operations: An Overview 33
Enhanced field presence: delivering expertise locally
26 Host Country Agreements for the targeted field offices signed
Delegation of authority to field offices to negotiate, sign and administer loans, manage portfolios, supervise projects
Expand presence in Fragile States 4 new field offices approved: • Burundi • Central African Republic • Liberia • Togo
Relevance, efficiency, and
expertise through the decentralization
process
Morocco Tunisia (TRA)
Egypt
Uganda
Malawi
Ghana
South Africa
Madagascar
Senegal Burkina
Rwanda Gabon
Mali
Nigeria
Mozambique
Sierra Leone
Tanzania
Zambia
Algeria
Ethiopia
Sudan
Kenya
Cameron
Chad
Angola
Zimbabwe
DRC Burundi
Togo
Liberia CAR
Ivory Coast (HQ)
Consolidate regional capacity through knowledge and
expertise building
Financial PresentationBank Group Operations: An Overview 34
200% capital increase with 6% paid-in portion raising the capital to around USD 100 bn
Increased lending in line with strategic priorities
Capacity to meet increased level of future demand and
support the business growth plan
Demonstrated strong shareholders support
Reinforce the Bank’s franchise value, key prudential ratios and AAA credit rating
Sixth and largest capital increase of the institution
33,187 -
93,692
-
20,000
40,000
60,000
80,000
100,000
Callable Capital
3,634 -
7,676
-
2,000
4,000
6,000
8,000
10,000
Paid-in Capital
(USD mn) 2010 After Capital Increase
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
Landmark General Capital Increase
Financial PresentationBank Group Operations: An Overview 35
Renewed confidence from the donor community for the Bank Group’s mandate
Principal donor and partner for regional integration
Renewed confidence from the donor community for the Bank Group’s mandate
ADF replenishments since 1999
Leadership and innovation in engagements with fragile states
Partial risk guarantees introduced to stimulate additional investment
3.6 4.1
5.4
8.9 9.5
ADF-8 ADF-9 ADF-10 ADF-11 ADF-12
(USD bn)
Scale up investments in infrastructure while putting the continent on a low-carbon, climate-resilient growth path
Financial PresentationBank Group Operations: An Overview 36
Operational consolidation
Bank Group total approvals maintained above pre-crisis levels
Bank Group Loan & Grant Approvals by Sector 2010
• Responding to the global crisis • Record amount of approvals in 2009 • 16% increase in lending compared to 2008
1,572 2,639 2,783
8,785
3,975 2,324
2,184 2,565
3,805
2,243
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
2006 2007 2008 2009 2010
(USD mn)
ADB ADF
Infrastructure 71%
Finance 9%
Multisector 8%
Industry 5%
Social 5%
Agriculture 2%
Financial PresentationBank Group Operations: An Overview 37
At the forefront of the global development finance architectureAt 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
Enhanced capacity to increase exposure to Low Income
Countries
Strengthening development activities for the poor in Middle
Income Countries
Positioned better than ever to tackle the challenge of inclusive development
Financial PresentationBank Group Operations: An Overview 38
More information on the Bank Group is available at www.afdb.orgMore information on the Bank Group is available at www.afdb.org
• Financial and Operational Analysis
• Documentation for Debt Programs
• Rating Agency Reports
• Financial Products for Borrowers
• Annual Report
• Investor Contact:
Financial PresentationAppendix 39
4 Appendix
Financial PresentationAppendix 40
AfDB: Income Statement (UA million)As at 31 December 2010 2010 2009 2008 2007 2006 Operational Income and Expenses 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 Income from Others Debt Securities 6.74 7.68 9.29 4.97 - Total Income from Loans and Investments 519.32 518.88 564.45 578.62 542.85 Interest and Amortized Issuance Costs (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 Provision for Impairment on Loan Principal and Charges Receivables (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) - - Translation Gains/(Losses) 4.87 19.63 (9.17) (8.90) 4.10 Other Income (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) Depreciation – Property, Equipment and Intangible Assets (4.59) (4.68) (5.20) (5.37) (6.23) 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
Distributions of Income Approved by the Board of Governors (146.37) (162.68) (257.30) (119.90) (139.20) Net Income for the year 67.30 68.48 47.36 203.77 54.83
1 UA = 1 SDR = 1.50440 USD (2006) = 1.58025 USD (2007) = 1.54027 USD (2008) = 1.56769 USD (2009) = 1.54003 USD (2010)
Financial PresentationAppendix 41
AfDB: Balance sheet highlights (UA million)
1 UA = 1 SDR = 1.50440 USD (2006) = 1.58025 USD (2007) = 1.54027 USD (2008) = 1.56769 USD (2009) = 1.54003 USD (2010)
As at 31 December 2010 2010 2009 2008 2007 2006 Assets Due from Banks 395.72 318.83 592.64 95.53 129.33 Demand Obligations 3.80 3.80 3.80 3.80 3.80 Treasury Investments 7,433.53 7,412.25 4,575.76 5,328.53 6,093.36 Derivative Assets 1,421.48 764.00 736.09 425.34 273.31 Non-Negotiable Instruments on Account of Capital 4.62 8.19 11.86 15.39 20.38 Accounts Receivable 1,341.66 924.16 649.01 570.88 600.97 Outstanding Loans 8,284.46 7,538.20 5,834.62 5,540.09 5,290.95 Accumulated Provision for Impairment on Loans (105.67) (101.92) (102.64) (196.02) (214.18) Equity Participations, Net 272.24 234.48 188.78 189.25 119.12 Other Debt Securities 79.75 70.81 68.80 94.62 - Other Assets 12.69 11.89 12.23 15.03 14.96
19,144.29 17,184.69 12,570.95 12,082.44 12,332.00 Liabilities, Capital and Reserves Accounts Payable 2,015.04 1,385.68 843.12 584.34 648.96 Securities Sold Under Agreements to Repurchase and Payable for Cash Collateral Received - - - - 877.83
Derivative Liabilities 328.30 477.12 360.30 591.05 481.94 Borrowings 11,980.57 10,580.64 6,707.28 6,198.87 5,870.47 Capital Subscriptions Paid 2,355.68 2,350.26 2,345.81 2,336.46 2,303.06 Cumulative Exchange Adjustment on Subscriptions (162.57) (161.97) (161.03) (160.08) (155.74) Reserves 2,627.28 2,552.96 2,475.47 2,531.80 2,305.48
19,144.29 17,184.69 12,570.95 12,082.44 12,332.00
Financial Presentation
Notes
Financial Presentation
Notes
Financial Presentation
Notes
African Development Bank Group
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