Proceeds from loans secured through AfDB's partial guarantee will be allocated exclusively to social and green investment sectors.
The Board of Directors of the African Development Bank on Friday approved a partial credit guarantee of EUR 400 million to Senegal to facilitate the mobilization of the country's inaugural sustainable financing to be exclusively allocated to green and social investments, in line with Senegal's Sustainable Financing Framework.
The financing by the Republic of Senegal will be in the form of a sustainable loan or loans for an amount of up to EUR 500 million. The Bank's guarantee enables financial establishments that are considering financing the operation to be protected against losses resulting from Senegal's failure to pay principal and interest on this loan up to EUR 400 million. This guarantee is approved at a time when financing costs for African sovereigns have increased significantly, following the tightening of international monetary policy.
The guarantee will enable Senegal to contract part of the financing in CFA Francs, thus improving the sustainability profile of its debt. With the support of the African Development Bank, Senegal can obtain financing at a more favorable cost compared to an operation which would have been carried out without a guarantee. Thus, the Bank's support aims to improve Senegal's access to the sustainable finance market under very favorable conditions.
Senegal's Sustainable Financing Framework published in June 2023, supports the diversification and mobilization of financing sources necessary to achieve the country's sustainable development objectives. Responding to international best practices, the Framework lays down modalities for project selection, liquidity management, as well as monitoring and evaluation. The Framework specifies ten sectors eligible for sustainable financing: agriculture; social protection and fight against poverty; water and sanitation; health; education; employment and financial inclusion of young people, women and entrepreneurs; connectivity ; promotion of low-carbon energies ; preservation of biodiversity; and adaptation to climate change.
''We welcome the approval of this project which will allow Senegal to implement green and social projects aligned with the Country Strategy Paper 2021-2025 of the African Development Bank Group for Senegal,'' declared Mohamed Cherif, African Development Bank Group Country Manager for Senegal.
The operation is aligned with the Plan for an Emerging Senegal (PES), adopted in 2014 to meet Senegal's economic, social and environmental objectives. The PES is structured around three strategic axes, namely: (i) structural transformation of the economy and growth, (ii) human capital development, social protection and sustainable development, and (iii) strengthening governance, institutions, peace and security.
Contact:
Media Contact:
Romaric Ollo Hien, Communications and External Relations | [email protected]
Technical Contacts:
Akane ZOUKPO SANANKOUA, Chief Investment Officer, Financial Sector Development Department
Albin KAKOU, Principal Investment Officer, Financial Sector Development Department
Abdoul Aziz BA, Investment Officer, Financial Sector Development Department
