Sustainability Linked Loan project

Project Description 

This summary is related to an application requesting MIGA to provide a Non-Honoring of Sovereign Financial Obligation (NHFO-SFO) guarantee to commercial lender(s) yet-to-be-identified (the Lenders). The guarantee will cover a sustainability-linked loan (SLL) of up to EUR433.4 million (the Loan) to be provided to the Ministry of Finance and Budget (MoF) of the Republic of Côte d'Ivoire (CdI). The contemplated final maturity of the SLL is 15 years. The MoF is currently finalizing the selection process for potential lenders, which should be selected shortly. 

The Republic of CdI, in collaboration with the World Bank Group, has developed its first Sustainability-Linked Financing Framework (SLF). This framework allows the Republic of CdI to access financing for its development priorities at potentially more favorable terms by linking financial conditions to the achievement of clearly defined Sustainability Performance Targets (SPTs) in the fields of (i) renewable energy production (excluding hydropower), and (ii) deforestation prevention and reforestation. The SLF supports the country’s ambitious sustainability commitments, including a national greenhouse gas (GHG) emissions reduction target of more than 30% by 2030, with the energy and forestry sectors being among the largest contributors to national GHG. This SLF will be reviewed by an external third-party, which will provide a Second-Party Opinion to confirm the Framework’s credibility and alignment with the ICMA and LMA principles. The SLL will be the inaugural transaction under the SLF framework and will benefit from a first-loss guarantee from the International Bank of Reconstruction and Development (IBRD) of up to EUR260 million, as well as the MIGA NHFO-SFO guarantee, which will be provided as a second loss guarantee.  

For this Project, the Republic of CdI may use the SLL for eligible expenditures in the health and education sectors, in line with the country’s strategic priority to enhance human capital and improve the population access to essential social services.  

Environmental and Social Categorization  

The Project is classified as category C under MIGA’s Policy on Environmental and Social Sustainability (2013) as the targeted government expenditures are anticipated to have minimal or no adverse environmental or social risks and/or impacts. As above, it is expected that the loan proceeds may be used by the Republic of CdI for expenditures in the health and education sectors, such as purchasing equipment and medicines, funding studies, training staff, and upgrading and renovating existing facilities. Potential adverse E&S risks are mitigated against by the existence of a sound regulatory framework that is being strengthened with support from IBRD.  

Development Impact  

The Project’s expected key development impact is to enable the Government of Côte d’Ivoire to benefit from lower funding costs to deliver on a set of objectives that have been identified as national strategic priorities. The MIGA-guaranteed loan will also introduce important financial innovations that have the potential to trigger private capital mobilization from a new investor base as well as wider adoption of ESG practices in Côte d’Ivoire.