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Uzbekistan 31/07/2024 Agence Francaise de Developpement aims to provide tailor-made solutions, as each country has its own specificities (video)
Agence Francaise de Developpement aims to provide tailor-made solutions, as each country has its own specificities

Tashkent, Uzbekistan (UzDaily.com) -- Uzbekistan is actively developing relations with various international and state organizations, one of which is the Agence Francaise de Developpement (French Development Agency, AFD). This is a state financial institution of France. Since 2016, the agency has been operating in our country. 

Over the past four years, Vincent Caupin has headed the AFD in Uzbekistan, and he is now completing his mission. We met with Mr. Caupin to discuss the agency’s activities in Uzbekistan and learn about the organization’s future plans.

- Could you summarize the achievements of the French Development Agency office in Uzbekistan over the past four years? What are you most proud of?

I will start with a short description of who we are at the French Development Agency Group. We are an institution belonging to the French government, operating in more than 100 countries worldwide. Our mandate is to support policies that improve the living conditions of the population and preserve the environment. We have a specific focus on climate change. In 2015, every country in the world met in Paris and committed to implementing policies to limit climate change. The French Development Agency is the tool used by the French government to support policies from countries that want to implement these kinds of measures.

Overall, we achieve this through two main tools. The first is long-term financing, and the second is technical expertise. For long-term financing, we can support either the government or the private sector. When it’s the private sector, our subsidiary Proparco handles it. Regarding technical expertise, we have a specific tool called Expertise France. We can also provide institutional know-how.

Our approach is to listen to the needs of the country and the requests we receive from our partners and clients. We strive not to offer a one-size-fits-all solution. Instead, we aim to provide tailor-made solutions, as each country has its own specificities. What works in one country may serve as inspiration, but it must be adapted to local conditions.

In Uzbekistan, we are a relatively new player. The intergovernmental agreement to start operations from the French Development Agency was signed in 2016, just eight years ago. The first four years were focused on establishing our presence and understanding the main characteristics of Uzbekistan. The last four years have been dedicated to developing our activities, and these years have been particularly favorable.

Let me provide some examples. First, the bilateral relationship between Uzbekistan and France is very strong. This was highlighted by the visit of Uzbek President Mirziyoyev to Paris in 2022 and President Macron’s visit to Uzbekistan in November 2023.

Another favorable element is the dynamism of the Uzbek economy. Since 2020, Uzbekistan’s economy has grown by more than 20%. In just four years, this is a significant achievement. The country is growing twice as fast as the global average, which is remarkable.

Additionally, there is substantial investment occurring in the country and significant interest from foreign companies. For example, French companies such as Électricité de France, Veolia, Suez, and Orano are all operating in Uzbekistan. These are major and well-known companies in France, and they view Uzbekistan as an interesting market.

In this overall context, the reforms of the Uzbek government allowed us to significantly develop our activities. Currently, our commitment to financing the Uzbek economy exceeds 1.5 billion euros allocated to both the private and public sectors.

-  In what ways has the agency contributed to the development and improvement of key sectors in Uzbekistan since its establishment here?

To answer your question about our proudest accomplishments, I can highlight one specific operation that has been very successful and is still ongoing: our work on green economy initiatives with the Ministry of Economy and Finance. This project, conducted with our colleagues from the World Bank and UNDP, addresses the challenges of a booming economy, which creates tension by increasing demand for resources like energy and water.

In a growing economy, if the demand for energy and water grows at the same rate as the economy, it can create problems. While energy demand can be managed with new production or imports, water resources are finite and cannot be increased. The challenge is to create the right incentives in the economy to maintain growth while conserving resources. This involves setting appropriate policies and incentives for households, companies, and agriculture. We have been working with the Ministry of Economy and Finance on this for the last three years, and we have seen significant improvements.

- In what ways has the agency contributed to the development and improvement of key sectors in Uzbekistan since its establishment here?

Regarding contributions to key sectors of Uzbekistan’s development, let me give an example from the energy sector. The energy sector is crucial for the economy. One key issue is to increase energy production without increasing greenhouse gas emissions. This requires developing renewable energy capacities. Our subsidiary Proparco has financed solar and wind farms in the country. We have also explored other renewable energy sources, such as biomass, in collaboration with the Ministry of Energy. Additionally, to distribute electricity effectively, especially from renewable sources, we have worked with the Ministry of Energy, JSC-REN, and the Asian Development Bank on rehabilitating the electricity distribution network. This is one example of our recent efforts in this sector.

- What were some challenges and obstacles which you faced during your operation in Uzbekistan and how you tackled them? 

One interesting challenge we are still encountering is the relative difference in the emphasis placed on short-term versus long-term issues when developing operations in Uzbekistan.

This situation is quite normal, and I'll explain why. In a booming economy like Uzbekistan’s, which is undergoing significant structural shifts, numerous short-term issues emerge. As a government, you must address these immediate concerns.

On the other hand, the French Development Agency focuses on providing long-term financing. Typically, when we offer a loan, it comes with a 20-year time horizon. A long-term perspective is crucial for us because we are committed for two decades. 

You might recall the famous economist John Maynard Keynes, who said, "In the long run, we are all dead." This highlights the importance of short-term considerations, which I fully agree with.

However, it's also important not to make decisions today that we might regret later. For instance, in France, during the 1960s and 70s, we faced a housing crisis due to a growing urban population and rural migration. We built many housing units quickly to address this issue, but without a well-designed policy. Later, we found that these buildings were poorly constructed, leading to problems such as overcrowding and tension among residents.

As a result, we had to demolish many of these buildings and construct better-designed ones, effectively doubling our investment. This example illustrates the need to balance short-term solutions with long-term planning. In our operations here, this is a topic we often discuss. We maintain a constructive dialogue, adapting to shifting priorities from the Uzbek side while emphasizing the importance of considering long-term issues as well.

- Looking ahead, what are your future plans for Uzbekistan? What projects are you planning to implement in the country?

The first element I would like to stress is that Uzbekistan is becoming an important partner for us. As I mentioned earlier, we have only 8 years of operation in the country.

The French Development Agency is an institution with over 80 years of experience. We have been operating in many countries for decades. However, given Uzbekistan dynamism, it is rapidly becoming a significant partner for us. We are providing a substantial amount of financing, and this is evidenced by the fact that our CEO visited the country twice last year.

We plan to continue supporting the Uzbek government’s policies and investments in the sectors where we are already active. We held our Annual Consultations with the Ministry of Investment, Industry, and Trade in June, during which we agreed to continue financing projects in the water sector, the energy sector, the green economy, and more.

I would like to highlight two areas where I believe we should further develop our activities. The first is with state-owned enterprises and state-owned banks. As the governance of public enterprises strengthens, we would be very interested in lending directly to these entities, provided they have the financial capacity. This approach has dual benefits: it simplifies the process and helps avoid adding to government public debt.

The second area is related to Expertise France, a subsidiary of the French Development Agency. Expertise France has recently opened an office near our own in the country. This development will enable us to better address Uzbekistan’s needs and identify the added value we can provide from the French side.

- How has the agency collaborated with local authorities, organizations and communities to ensure sustainability and development of projects in Uzbekistan?

Before I answer your question, I’d like to mention one additional point. My successor, Olivier Grand-Vouenet, will take over his position in August. He is a highly skilled and experienced professional, and we also have a very dynamic team here. I’m confident that the French Development Agency’s institutional presence will be well maintained.

Now, to address your question, I want to thank you for raising such an important topic. It is crucial to engage with different regions. The president emphasizes this and sets the example. During my four years here, I have had the opportunity to visit all regions of Uzbekistan. This firsthand experience helps to understand that challenges vary between regions, such as those in Andijan compared to those in Sharisabz.

For example, my last visit was to Nukus last week, where I met with the Chairman of the Cabinet of Ministers. We are preparing two operations in the Autonomous Republic of Karakalpakstan: one on afforestation and another on irrigation. It is vital for us to understand the political will to adapt technical solutions accordingly.

Engaging with local communities is also very important. I had the opportunity to visit a project in Surkhandarya, implemented by ACTED, which focuses on strengthening local communities and women’s associations. To be honest, I was really impressed by the work being done. As a development institution, it is valuable for us to listen to the voices of local communities.

As we wrap up our interview, is there any question I haven’t asked, but you feel is important to address? 

I just want to say that I’ve been very happy to spend these four years in Uzbekistan. It has been a wonderful professional and personal experience, and I have learned a great deal from all of you. I am truly grateful for this opportunity.

Thank you for your time. I wish you the best of luck in your future endeavors.

 

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