AFD to fund Indian projects

Chennai: The proposed Agence Francaise de Développement (AFD), or French Development Agency, meant to fund Indian companies investing in clean technologies, water management and conservation of bio resources, would be set up within a couple of months, the French ambassador in India, Mr Jerome Bonnafont, said.

Addressing The Hindu group of publications here, Mr Bonnafont said that a few issues remain to be sorted out with the Ministry of Finance for setting up the AFD.

He noted for the funding agency to be self-sustaining, its lendings had to be profitable. The French government, (which sponsors AFD) would want AFD’s profits to be tax-exempt, for, otherwise the agency would be paying taxes for helping Indian companies.

On the other hand, the Ministry of Finance would want that AFD’s loans are at sufficiently concessional terms for it to justify income tax waiver.

Mr Bonnafont said that this was a sort of a routine issue that would be sorted out.

AFD is part of the French government’s development aid programme.

Till date, France has no mechanism for funding Indian companies. AFD, which has been a vehicle for funding projects in Africa, is now being extended into India.

Mr Bonnafont said at the India visit of the French President, Mr Nicolas Sarkozy, in January, the two countries had resolved to double the current level of two-way trade to €12 billion in five years.

The ambassador said that apart from economic relations, France also wanted to strengthen cultural relationship with India.

He noted that there were only 1,200 Indian students in France, (as opposed to over 4,000 in Germany,) and France intended to triple this number in three years.

Mr Bonnafont also reiterated France’s position that India ought to be a permanent member of the United Nation’s Security Council.