Proparco and BPI France: their E&S requirements for financed projects

Two French financial institutions frequently intervene in internationally oriented infrastructure projects: Proparco and BPI France. Their mandates differ, but both apply a structured environmental and social framework, often aligned with dominant international standards, with their own emphases.

Proparco is the AFD Group's (Agence Française de Développement) private-sector subsidiary. Created in 1977, it finances companies in developing and emerging countries through loans, equity investments and guarantees. Its E&S framework is part of the AFD Group's overall policy.

BPI France, created in 2012 through the merger of OSEO, FSI and CDC Entreprises, is the French public investment bank. It supports French companies in their development, including internationally. Its Export Guarantee function, under State mandate, insures French exporters against political and commercial risks.

This article presents the two institutions, their respective E&S frameworks, commonalities and differences, and practical recommendations for project sponsors considering mobilising either one.

Proparco: private-sector subsidiary of the AFD Group

Proparco's mandate is to finance the private sector in developing countries, with an explicit mission to contribute to the Sustainable Development Goals. Its portfolio covers Africa, Asia, Latin America and the Middle East, with historically strong concentration in francophone Africa.

Instruments mobilised include direct loans to companies, equity investments, investments in intermediated funds, and guarantees. Transaction amounts range from a few million to several tens of millions of euros.

Proparco's E&S framework is based on several references.

The IFC Performance Standards are the main technical reference, as for most European DFIs. Proparco applies them directly in its due diligence.

The AFD Group's corporate social responsibility policy defines cross-cutting commitments, sectoral exclusions, and priority dimensions (climate, biodiversity, gender, youth).

Specific thematic policies clarify the approach on certain topics: climate (100% Paris Agreement strategy), biodiversity, gender and development, human rights.

Internal procedures formalise the appraisal process: E&S risk assessment, categorisation, due diligence, ESAP development, monitoring.

Proparco categorises projects according to a three-level scale similar to the IFC: category A (high risks), B (moderate risks), C (low risks). Categorisation determines the depth of due diligence and reporting requirements.

Distinctive features of Proparco's approach

Beyond alignment with the IFC PS, Proparco has several distinctive emphases.

Climate commitment. For several years, Proparco has formalised a 100% Paris Agreement-aligned strategy for its new investments. In concrete terms, each project is assessed against its compatibility with a limited warming trajectory. Projects contributing to the low-carbon transition are prioritised; projects significantly increasing emissions are excluded or require strong developmental justification.

Biodiversity commitment. The AFD Group published its biodiversity strategy in 2022, which translates at Proparco into heightened attention to projects in sensitive habitats, rigorous application of the mitigation hierarchy, and conditionality of certain financing on ecosystem restoration.

The gender dimension. Proparco uses the 2X methodology, like other European DFIs, to identify and promote investments particularly benefiting women. Annual commitment volumes on 2X criteria are published.

Partnership approach with the AFD Group. Several projects combine AFD financing (for the public or sovereign component) and Proparco (for the private component). This articulation offers an integrated financing package that a project sponsor can mobilise for certain operations.

BPI France: French public investment bank

BPI France has a broader mandate than Proparco: to support French companies at all stages of their development, from creation to internationalisation, through loans, guarantees, investments and advisory services.

On the international side, two activities of BPI France mobilise a structured E&S framework.

BPI France Assurance Export (formerly Coface since the 2017 transfer) manages public export guarantees on behalf of the State. It covers French exporters against political and commercial risks on their export contracts, as well as French direct investments abroad.

BPI France Financement intervenes in direct export project financing through loans and guarantees, often in coordination with other international lenders.

The E&S framework applied to these activities is based primarily on the OECD Common Approaches on the environment and officially supported export credits. This reference framework, adopted by export credit agencies of OECD member countries, categorises transactions into three levels (A, B, C) according to their environmental and social sensitivity, and requires proportionate due diligence.

Category A transactions require an impact assessment, public disclosure for at least 30 days before approval, and continuous supervision during the life of the guaranteed contract. Category B transactions require simplified review. Category C transactions are exempt from in-depth review.

BPI France's specific requirements on large export contracts

For significant export contracts (heavy capital goods, infrastructure, energy), BPI France Assurance Export applies a detailed framework.

Environmental and social assessment is based on applicable international standards, generally the IFC Performance Standards and the IFC EHS Guidelines. In some cases, applicable standards may include OECD standards, World Bank standards, or those of other lenders involved in the project's overall financing.

Public disclosure is practised for category A projects. Published information includes a project description, presentation of main identified impacts, and planned mitigation measures. The public comment period allows external stakeholders (NGOs, communities, experts) to submit observations.

Monitoring during the life of the guaranteed contract involves periodic missions, borrower reports, and independent auditor reports for sensitive projects. A multi-year guaranteed contract requires continuous monitoring comparable to that of a standard DFI loan.

Commonalities between the two institutions

Proparco and BPI France share several common characteristics that distinguish them from other lenders.

French roots. Both institutions apply standards that implicitly integrate certain emphases of French administrative culture: attachment to documentary formalism, sensitivity to social dimensions, importance accorded to heritage and cultural dimensions.

Alignment with French public policies. Both institutions align their interventions with French development policy, climate policy and industrial policy orientations. A project that contributes to these orientations is naturally better positioned.

Working language. Both institutions function primarily in French, which can be an advantage for project sponsors in francophone countries and a point of attention for anglophone sponsors who must plan for necessary translations.

Integration in large multi-lender operations. Both institutions regularly participate in syndicated financing with other European and international lenders. This practice is well established and facilitates co-financing.

Differences that matter

Beyond commonalities, five differences structure the relationship with each institution.

Target audience. Proparco invests in the private sector of developing countries; BPI France supports French companies, including in their internationalisation. This difference in audience conditions the type of eligible project.

Mission rationale. Proparco has a developmental rationale: impact on the host country is central. BPI France has a French competitiveness rationale: supporting French companies is central. The two rationales can converge, but they are not identical.

Instruments. Proparco offers loans, equity and funds. BPI France internationally offers mainly export guarantees and loans to exporters. This difference in instruments changes access conditions and processes.

Applied standards. Proparco applies the IFC PS directly. BPI France applies the OECD Common Approaches, which build on the PS but frame them within a regime specific to export credit agencies.

Transparency. Proparco publishes its investments and main portfolio characteristics. BPI France Assurance Export publishes large category A transactions but more restrictively, due to commercial confidentiality of export contracts.

Practical recommendations for project sponsors

Five recommendations emerge from the experience of sponsors who mobilise either institution.

Choose the right counterpart according to project profile. A project led by a local operator in a developing country naturally gravitates towards Proparco. A project that mobilises a significant French export contract gravitates towards BPI France Assurance Export.

Anticipate possible articulations. An infrastructure project combining a French export contract and a local operator can mobilise both institutions with different instruments. This combination requires work well upstream of structuring.

Prepare documentation in French. Both institutions function primarily in French. A carefully translated file, rather than an English file transmitted directly, facilitates dialogue and accelerates appraisal.

Integrate French priorities. Climate, biodiversity, gender, youth and social cohesion are priorities that resonate strongly in both institutions. A project that explicitly aligns with them is valued.

Take care with supervision aspects. Both institutions practise rigorous supervision, with field missions and reporting requirements. A mature internal E&S system is appreciated and facilitates ongoing dialogue.

What both institutions verify.

• Alignment with IFC Performance Standards (Proparco) or OECD Common Approaches (BPI France).
• Consistency with thematic priorities (climate, biodiversity, gender).
• Quality of E&S documentation and its adequacy to the risk category.
• E&S institutional capacities of the borrower or exporter.
• Commitments on expected impact indicators.

Proparco and BPI France are two institutions that deserve to be known by every international project sponsor. Their complementary mandates, robust E&S frameworks and French roots make them relevant counterparts for specific segments.

The key to success in the relationship with these institutions lies in precise understanding of their respective mandates, preparation of appropriate documentation, and alignment with their thematic priorities. This preparation, conducted upstream, considerably facilitates subsequent appraisal and supervision.