Question 1

What is Agence France Locale?

Accepted Answer

Agence France Locale (AFL) is France's only public development bank created entirely by and for local authorities. It is a unique municipal funding institution owned exclusively by French local government entities, including regions, departments, municipalities, and local public entities.

Operating as a cooperative banking model, AFL mutualizes the funding needs of its member local authorities to access capital markets at favorable rates, then redistributes these funds as loans exclusively to its member-shareholders. As of March 2024, AFL serves approximately 1,100 member local authorities representing about 25% of French local public debt.

Question 2

When was Agence France Locale founded?

Accepted Answer

The groundwork for AFL began with the creation of the Association d'étude pour l'agence de financement des collectivités locales (AEFCL) to study the feasibility of establishing a local government funding agency. The concept was endorsed by the Association of Mayors of France.

AFL was legally established through the Banking Regulation and Separation Act (loi n° 2013-672) of July 24, 2013, championed by Pierre Moscovici during François Hollande's presidency. Two companies were created on that date: AFL-Société Territoriale for strategic governance and AFL société financière for funding and lending operations.

AFL was authorized by France's banking regulator (ACPR) on January 12, 2015, and began lending operations in 2015. Eleven local authorities were founding shareholders, including the Pays de la Loire Region, several departments, Lyon Métropole, and the cities of Bordeaux and Grenoble.

Question 3

Where is Agence France Locale headquartered?

Accepted Answer

Agence France Locale is headquartered in Lyon, France, at 112 rue Garibaldi, 69006 Lyon.

Question 4

Where does Agence France Locale operate?

Accepted Answer

AFL operates throughout metropolitan France and overseas territories. The bank serves local authorities across all French regions, including two overseas territories: French Polynesia and Saint-Pierre-et-Miquelon.

Members include regions, departments, municipalities, intercommunal groupings (EPCI, EPT), and mixed syndicates representing urban and rural areas across the entire country.

Question 5

What services does Agence France Locale offer?

Accepted Answer

AFL provides simple, transparent loans to finance capital expenditures of member local authorities. The bank offers only traditional loan products and explicitly prohibits structured loans, maintaining a conservative approach focused on minimizing risk.

AFL raises funds through bond issuances on international capital markets, including sustainable bonds designed to refinance investments supporting the United Nations Sustainable Development Goals (SDGs). Since July 2020, AFL has issued sustainable bonds totaling over 1 billion EUR to finance social and environmental projects.

As of December 31, 2024, AFL has provided nearly 2 billion EUR in loans during 2024, with total lending exceeding 10 billion EUR since 2015. The bank is now France's third-largest lender to local authorities.

Beyond financing, AFL offers expertise to help local authorities understand financial health issues, ecological transition financing, and energy renovation of buildings. AFL partners with organizations like ADEME, CEREMA, and CNFPT to share knowledge and best practices.

Question 6

What makes Agence France Locale unique?

Accepted Answer

AFL is fundamentally different from traditional banks. It is owned entirely by the local authorities it serves, making them simultaneously shareholders, borrowers, and guarantors. This cooperative model, inspired by Nordic municipal funding agencies, ensures complete alignment of interests.

The bank operates on principles of transparency, solidarity, and expertise. AFL explicitly prohibits structured products, maintains a low risk appetite, and focuses exclusively on financing public policy investments without discrimination based on project purpose or local authority size.

AFL does not classify loans as "green" or "social" but instead screens local authority budgets to identify investments supporting SDGs for refinancing through sustainable bond issuances. Approximately 40% of financed capital expenditures contribute to the SDGs.

The bank operates in a short circuit model with no profit distribution to external parties. All profits strengthen capital to support future lending capacity.

Question 7

What type of financial institution is Agence France Locale?

Accepted Answer

Agence France Locale is a Credit Institution (CRD_CRE_INS) under European banking regulations. It operates as a public development bank (banque publique de développement) with a unique cooperative structure.

The bank holds a full banking license issued by the French Prudential Supervision and Resolution Authority (ACPR) and is supervised by both ACPR and the European Central Bank. AFL participates in the French Deposit Guarantee Fund (FGDR), protecting deposits up to 100,000 EUR per depositor.

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About Agence France Locale in France