Question 15786 — public finances

Summary

Mrs Marine Hamelet questions the Minister for Europe and Foreign Affairs on the cost and budgetary consequences of the acquisition by the AFD of its new head office, as part of the ZAC Paris Rive Gauche real estate operation, in Paris. In January 2020, the AFD board of directors authorized its general director to sign, with the developer Kaufman and Broad, a promise of sale in the future state of completion (VEFA) covering 50,000 m2 of offices. According to the opinion delivered in June 2021 by the State Real Estate Council (CIE), the amount of the operation is estimated at 840 million euros, increased to more than 924 million euros including costs, i.e. a cost price of around 18,500 euros per square meter. This price level exceeds by around 50% the average price then observed in this sector, estimated at around 12,000 euros per square meter. In this same opinion, the CIE noted that the operation included excess space of at least 8,000 m2, leading the agency to rent or resell the surplus. Since 2020, the administration has maintained that this operation would have no cost to the state budget, with the AFD financing it through borrowing on the markets and through the sale of its current buildings. This presentation calls for several reservations. Firstly, AFD's borrowing capacity is based on the solidity of its own funds, which have been reinforced by the State. AFD, a public establishment of an industrial and commercial nature carrying out financial institution activity, is subject to the European prudential framework and placed under the supervision of the Prudential Control and Resolution Authority (ACPR), particularly with regard to solvency and risk division ratios (“large risks”). However, since the entry into force of CRR2 regulation in June 2021, the resources with special conditions (RCS) granted by the State are no longer eligible for equity for the calculation of the “large risks” ratio. To preserve the agency's ratios, in 2021 the State strengthened its own funds by around 1.45 billion euros, broken down into a new allocation of 500 million euros and the conversion into basic own funds (CET1) of around 950 million euros of pre-existing resources. This strengthening was extended by successive recapitalizations under budget program 365 “Strengthening AFD's own funds”, created in 2021 (190 million euros in 2022, 150 million euros in 2023, 145 million euros recorded in 2025). The qualification of “accounting neutrality” put forward by the administration mainly aims at the conversion of RCS, neutral with regard to the criteria from Maastricht; it does not eliminate the commitment of public resources, whether it be the new endowment or the abandonment, by conversion into capital, of a claim that the State held on the agency. Secondly, the gap between the acquisition price and the market value of the property carries a risk of latent capital loss on the asset. Compared to the 50,000 m2 concerned, an additional unit cost of around 6,500 euros per square meter would represent a potential depreciation of between 300 and 450 million euros on AFD's own funds. The materialization of such a loss, like any deterioration in prudential ratios, could lead the State to recapitalize the agency in order to cover the prudential needs of the following years. Consequently, it asks him: to indicate whether a capital loss on the headquarters has been identified or provisioned by the agency, or noted by the ACPR and, where applicable, its amount; to specify whether a new recapitalization of the AFD is envisaged in the medium term, its forecast amount and its impact on the State budget; and to indicate the measures that the Government intends to take, with the new management of the agency, to guarantee control of this expenditure and the sound management of public funds.

Machine translation from French. The official text remains authoritative.

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