1. Innovative financing for development – Experience from France Christine Rosellini Ministry of foreign affairs and international development, France Tbilissi, 16 décembre 2015

2. Presentation outline 1.The solidarity levy on air tickets dedicated to health and UNITAID ; 2.The financial transaction tax ; 3.Other innovative mechanisms experimented in France

3. France’s commitment to the promotion of innovative financing for development Innovative financing is a prority for France, as we have: hold the permanent secretariat of the leading group since the beginning ; implemented airline ticket levy to fund health trough Unitaid in 2006; dedicated partly its FTT to development since 2012 But also experienced others innovative mechanisms such as IFFIM, mixed loans, guarantees, bonds or more recently lottery

4. This table shows the variety of mechanisms experienced by France (source: Dalberg) :

5. 3. The air ticket levy Established in France in 2006 Compulsory and applicable to all flights leaving France 4 amounts : from 1,13€ to 11,27 € for flights in Europe and from 4,51€ to 45,08 € for flights outside Europe, depending on the class of the tickets. Incomes from 160M€ to 185M€ (before the increase in 2014) Already 1,6 billion euros raised to finance development in 8 years

6. 3. Legal framework of the air ticket levy Additional tax to the existing civil aviation one Written in the state finance law. 2 decrees: o One indicating the modalities of the tax o One indicating the allocation of the tax Incomes collected by the “Direction générale de l’Aviation civile (DGAC)” which wire them to an account at the “Agence Francaise de Développment” (solidary development fund) The Solidary development fund is co-chaired by 3 ministries The important innovation : The incomes of the air ticket levy are not put in the general budget of France but are earmarked to development issues.

7. 3. A Tax without negative impact The tax has been considered without negative impact in diverse official reports: In a Government assessment report submitted in early 2009 to the French parliament And idem in a French Court of Audit assessment on the use of airline-ticket levy income made in 2010 Furthemore, Airline companies can benefit by reporting on the positive outcome of the airline-ticket levy, such as Air France which in January 2010 released an article entitled “UNITAID says thanks”. However the tax is regularly questioned (recently by a French deputy who was writing a report on the French airline sector competitiveness)

8. 3. The air ticket levy in the world Other countries have followed the French example: Cameroun, Chile, Congo Brazzaville, Madagascar, Mali, Maurice, Niger et South Korea

9. 4. The French financial transaction tax (FTT)  Why an FTT? First mentionned by James Tobin in 1972 as a way to limit speculation on financial markets, the idea of an FTT has gained importance over the past decade  The Landau report: A moral decision in the context of the economic and financial crisis  The Gates Report: An innovative way to raise more funds for sustainable development, as a complement to national budgets

10. 4. The French FTT: how it works? Modalities:  0,2% on shares transactions of French companies with market capitalization > 1 billion €  0,02% on high frequence trading operations and CDS Already 300 million € raised for development between 2013-2015 to Global Fund, GAVI, Health project in the Sahel region (I3S), RWSSI (African Development Bank) Partly allocated to the solidarity for development fund from 10 to 25% of total revenues but also limited to an annually voted amount Next step: a FTT at European level (agreement on core principles but still to define rates and allocation)

11. Other Innovative mechanisms AFD green credit lines: 2,2 million dollars between 2006 and 2013 through AFD Debt reduction development contracts (C2D): 3,02 billion dollars since 2006 Guarantees: more than 700 million dollars through ARIZ guarantee and Proparco guarantees between 2008 and 2012 Climate Bond: 1bn euro raised in October 2014 Perspectives: Social investment: AFD tests a Facility for inclusive development economics to support alliance between governement, private sector and civil society Encourage citizens contributions to sustainable development

12. Last but not least: First lottery experience in France Launching of a solidarity scratch card in support of the environment by FDJ on November 2015 Twenty million cards will go to sale 4% of game sales will fund ten projects held by WWF France Expected amound awarded of 2,4 million euros and 1 million euros guaranteed by FDJ