Project description
This summary covers an application by Société Générale of France (“SG”) for up to EUR 150 million in guarantee coverage for a short-term loan facility, focused on supporting trade, to the Government of Republic of Togo (“GoT”) through the Ministry of Economy and Finance, for a tenor of up to one year, with the option to be rolled over at the approval of SG and MIGA.
The MIGA-covered facility would be used to provide short term loans for trade-related payments, aimed at mainly supporting the agriculture, electricity and water distribution sectors.
Environmental Categorization
The MIGA-covered facility will support short-term trade transactions. These transactions pose minimal environmental and social (“E&S”) risks and impacts and as such, the project has been categorized as ‘FI-3’ in accordance with MIGA’s Policy on Environmental and Social Sustainability (2013). The applicable E&S requirements for this project are the MIGA Exclusion List and applicable E&S laws in Togo. The GoT will be required to implement a mechanism to screen underlying transactions against the MIGA Exclusion List and applicable E&S laws and SG will incorporate the E&S requirements into the facility agreement between SG and GoT. The GoT’s project implementation unit will also be required to comply with national labor laws.
Development Impact
The Project’s expected key development impact is the facilitation of Togo’s access to short-term trade finance to enable the Government to continue its policies in support of essential segments of the economy, including preserving food security and developing the access to essential utility services, in line with the implementation of the Togo 2025 Government Roadmap. The MIGA-guaranteed loan will also support the country’s resilience and contribute to reduce liquidity pressures amid a constrained global and regional financing environment, by offering a financial solution suited for the short-term needs of trade expenses. By leveraging innovative credit-enhanced financing instruments, the Project also underscores Togo’s commitment to the sustainable management of its public debt while reinforcing its broader development objectives.
The Project fully aligns with the World Bank Group (WBG) Country Partnership Framework (CPF) for FY25-FY29, notably with the High-Level Objectives: (1) Increasing Quality Employment in the Private Sector and (3) Promoting Inclusive and Sustainable Territorial Development. Specifically, the Transaction is aligned with Objective 1. Improve agricultural productivity and selected agribusiness value chains, as well as with Objective 3. Improve Access to reliable and sustainable energy and Objective 6. Increase access to climate resilient infrastructure and services.
