The financial resources will be allocated for the construction and renovation of infrastructure aimed at generating electricity from renewable sources. This initiative seeks to diversify the energy portfolio, mitigate CO2 emissions, and lower the costs associated with energy production.
A €100 million initiative has been established to support projects aimed at mitigating climate change in West Africa through the acquisition of the inaugural hybrid bond issued by a multilateral bank for this specific purpose. This initiative is detailed in the agreement signed between the Italian Climate Fund, overseen by Cassa Depositi e Prestiti (CDP) on behalf of the Ministry of Environment and Energy Security (MASE), and the West African Development Bank (BOAD), which serves as a multilateral development institution for the countries of the West African Economic and Monetary Union (WAEMU).
The agreement, formalized today at the Cassa Depositi e Prestiti headquarters in the presence of Edmondo Cirielli, Deputy Minister of Foreign Affairs and International Cooperation; Serge Ekue, President of BOAD; and Dario Scannapieco, CEO of CDP, entails the Climate Fund's subscription to a hybrid bond valued at €100 million, issued by BOAD. The proceeds will be utilized to construct and rehabilitate infrastructure for renewable energy production, thereby diversifying the energy mix, reducing CO2 emissions, and lowering energy production costs. This effort will contribute to the realization of several United Nations Sustainable Development Goals (SDGs), particularly SDG 7 (“Affordable and Clean Energy”), within the WAEMU member states: Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo.
“This Sustainable Hybrid Private Placement, issued in line with our Sustainability Framework, will help BOAD to strengthen its capital structure and therefore reinforce its rating profile while serving its Member Countries’ electricity generation needs. This second hybrid bond transaction closed by BOAD in accordance with its Djoliba Strategic Plan shows our commitment to further advance economic growth and sustainable development through impact-focused and innovative financing solutions” declared M. Serge EKUE, President and chairman of BOAD.
The Sustainable Hybrid Private Placement will fortify BOAD's capital structure, augmenting its capacity to mobilize novel climate finance within the region. The bond issuance, subscribed by the Italian Climate Fund, stands as one of the pioneering endeavors of its kind globally, issued by a multilateral bank, akin to the hybrid bond issued by the African Development Bank in January 2024. Notably, this initiative aligns with the recommendations formulated by the G20 during the Italian presidency, aiming to bolster the investment capacity of multilateral development banks.
The Italian Climate Fund, endowed with an allocation of 4.2 billion euros, is dedicated to financing public and private projects in emerging and developing nations that contribute to the attainment of climate and environmental objectives, in consonance with Italy's international climate commitment.
"The Italian government's commitment to selecting and supporting qualified entities to ensure concrete and productive investments in Africa continues, in perfect alignment with the objectives and guidelines of the Mattei Plan" stated Gilberto Pichetto Fratin, Italian Minister of Environment and Energy Security. "Countries will benefit from the first euro-denominated hybrid bond that the Ministry of the Environment and Energy Security has been able to create, thanks to the technical and financial expertise of Cassa Depositi e Prestiti. The installation of green energy plants will support sustainable economic growth in Africa, and at the same time, the proposed financial solution is highly innovative: a distinctly Italian approach that highlights our new way of engaging in cooperation with African countries."
"Steps like the signing of this agreement allow us to realize the vision of the Mattei Plan, particularly confirming the strategic role of the Climate Fund," stated Edmondo Cirielli, Deputy Minister of Foreign Affairs and International Cooperation, who spoke at the signing ceremony. "We aim to promote economic growth and environmental sustainability in West Africa and across the continent, always in a spirit of equal partnership. Actors like CDP and BOAD are crucial in this context."
"This operation marks a significant milestone for the Italian Climate Fund, the climate finance instrument of the Italian government, managed by CDP on behalf of the Ministry of the Environment and Energy Security. The first euro-denominated hybrid bond issued by an African multilateral development institution, which will have tangible benefits for the capitalization of BOAD and, consequently, the African banking system, will allocate additional resources to support projects in the renewable energy sectors across eight West African countries. This is another initiative, which adds to the initiatives already undertaken as part of the Mattei Plan, aimed at promoting the continent's efforts towards climate change mitigation, in line with the United Nations' Agenda 2030 Sustainable Development Goals," has declared Dario Scannapieco, CEO of Cassa Depositi e Prestiti.
