MIGA and BOAD to Expand Climate Finance in West Africa
WASHINGTON, November 25, 2024 – The Multilateral Investment Guarantee Agency (MIGA), which houses the World Bank Group Guarantee Platform, issued a €506 million ($535 million) guarantee to Societe Generale (SG) and HSBC Bank Plc of the United Kingdom (HSBC) for their loans to the West African Development Bank (Banque Ouest Africaine de Développement or BOAD). The guarantee covers the risk of non-honoring of financial obligation by a regional development bank for up to 15 years.
BOAD is the Togo-based regional development bank of the West African Economic and Monetary Union (WAEMU). Its mandate is to promote the balanced development of its member states and to foster economic integration within West Africa by financing priority development projects. The MIGA-guaranteed loan will support BOAD’s lending operations for sustainable and climate projects across its eight member countries. The proceeds of the guaranteed loan will benefit agriculture, renewable energy, general and digital infrastructure, green housing and real estate, health care, and education projects in Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
“The project reflects our commitment to support climate finance in low-income countries and to respond to key development challenges in regions such as the West African Economic and Monetary Union,” said Hiroshi Matano, MIGA Executive Vice President. “We believe our guarantee will catalyze further investments in the transition to a green economy and create new green jobs.”
BOAD has committed to deploying 50% of the guaranteed loan to eligible climate finance projects, of which 30% will be directed toward climate adaptation financing, within the first five years of the 15-year MIGA guarantee period. The project’s climate action plan includes a procedure for screening and reporting climate finance, as well as enhanced internal processes for identifying and addressing physical climate risks under the Paris Alignment approach.
To support low-carbon and climate-resilience pathways in member countries, BOAD has developed a framework that requires all operations to align with the mitigation and adaptation goals of the Paris Agreement.
“HSBC is pleased to partner with MIGA and BOAD to deliver financing toward BOAD’s strategy to fund sustainability and climate related projects in its member states," said Himesh Patel, Head of Public Sector EMEA for HSBC.
“This guarantee product represents a particularly innovative initiative. It will actively support the financing of projects with a strong environmental and social impact, demonstrating our commitment to sustainable development and social responsibility,” said M. Serge EKUE, President and Chairman of BOAD.
“BOAD entrusted Société Générale to act as Arranger, Global Coordinator, Sustainability Bank and sole Hedge Provider for their first MIGA-covered loan. By supporting Climate Adaptation projects in 8 member countries, BOAD is at the forefront of West African sustainable development, bringing substantial environmental benefits in priority sectors such as resilient agriculture or renewable energy,” said Randolph-Davis FOTSO, Head of Development Finance Institutions Solutions for Development & Structured Export Finance, Societe Generale. “This transaction is proof of Société Générale's commitment in delivering robust transactions and confirming our ambition to support the sustainable growth of West Africa, a region that remains at the heart of our team's ambitions.”
The project has committed to a gender action plan aimed at enhancing institutional capacity on gender. This will be achieved by developing and utilizing e-learning modules on BOAD’s gender approach for its employees and clients, as well as creating and piloting an online monitoring and reporting tool for gender to support tracking on the implementation of BOAD clients' gender action plans.
The eight countries are some of the fastest growing economies in Sub-Saharan Africa, with significant improvements in trade, infrastructure, and energy, fueled by large public investments.
About Societe Generale of France
Societe Generale is a top tier European Bank with more than 126,000 employees serving about 25 million clients in 65 countries across the world. We have been supporting the development of our economies for 160 years, providing our corporate, institutional, and individual clients with a wide array of value-added advisory and financial solutions. Our long-lasting and trusted relationships with the clients, our cutting-edge expertise, our unique innovation, our ESG capabilities and leading franchises are part of our DNA and serve our most essential objective - to deliver sustainable value creation for all our stakeholders.
The Group runs three complementary sets of businesses, embedding ESG offerings for all its clients:
· French Retail, Private Banking and Insurance, with leading retail bank SG and insurance franchise, premium private banking services, and the leading digital bank BoursoBank.
· Global Banking and Investor Solutions, a top tier wholesale bank offering tailored-made solutions with distinctive global leadership in equity derivatives, structured finance and ESG.
· Mobility, International Retail Banking and Financial Services, comprising well-established universal banks (in Czech Republic, Romania, and several African countries), Ayvens (the new ALD I LeasePlan brand), a global player in sustainable mobility, as well as specialized financing activities.
About HSBC Bank Plc of the United Kingdom
HSBC Holdings plc, the parent company of HSBC, is headquartered in London. HSBC serves customers worldwide from offices in 60 countries and territories. With assets of $3,099bn on 30 September 2024, HSBC is one of the world’s largest banking and financial services organizations.
About West African Development Bank (Banque Ouest Africaine de Développement or BOAD)
The West African Development Bank (BOAD) is the common development finance institution of the member countries of the West African Economic and Monetary Union (WAEMU). It is an international public institution whose purpose is to promote the balanced development of its member countries and foster economic integration within West Africa by financing priority development projects. It is accredited to the three climate finance facilities (GEF, AF, GCF). Since 2009, BOAD sits as an observer at the UNFCCC and actively participates in discussions on devising an international climate finance system. Since January 2013, it has been home to the first Regional Collaboration Centre (RCC) on Clean Development Mechanism (CDM), whose aim is to provide direct support to governments, NGOs and the private sector in identifying and developing CDM projects. As of October 15, 2023, the Bank has been co-chairing alongside Bancoldex, the International Development Finance Club (IDFC) which brings together 26 national, regional and multilateral development banks from around the world.
About the World Bank Group Guarantee Platform
Initiated in 2024, the World Bank Group Guarantee Platform consolidates all guarantee products and experts from across the World Bank Group institutions at MIGA. It provides a simplified and comprehensive menu of guarantee solutions, enabling clients to select the instrument that best suits their needs. The platform streamlines processes, removes redundancies, and provides greater accessibility by de-risking investments in developing countries. Its goal is to boost the WBG’s annual guarantee issuance to $20 billion by 2030.
For more information about the guarantee platform, please visit: https://www.worldbank.org/wbgguarantees
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Contact:
In Washington: Elizabeth Howton, (202) 458-5922 or ehowton@worldbankgroup.org