Togo: African Development Fund to provide a partial credit guarantee to support the financing of green and social projects

The Board of Directors of the African Development Bank Group has approved a EUR 200 million partial credit guarantee (PCG) to support Togo’s inaugural sustainable financing to implement green and social projects.

The Partial Credit Guarantee for Mobilisation of Sustainable Financing for Togo project – supported through the African Development Fund, the Bank Group’s concessional lending arm – will enable the government to raise sustainable financing competitively from international commercial banks, diversifying its funding sources and lengthening its maturity profile.

The Togolese government will allocate the proceeds to eligible projects and initiatives in sectors aligning with the UN Sustainable Development Goals and the country’s Sustainable Financing Framework. These include: preservation of land and water biodiversity; climate adaptation; sustainable agriculture, forestry and fisheries; pollution prevention and control; access to carbon-free, reliable and affordable energy; food sovereignty and security; educational services; support for employment, financial inclusion and economic empowerment; connectivity and digital inclusion; and social safety nets and poverty reduction.

Solomon Quaynor, Vice President for Private Sector, Infrastructure, and Industrialisation said: “We are honored to support Togo in accessing long-term and competitively priced commercial financing from financial institutions to be exclusively allocated to eligible expenditure in areas aligned with its Sustainable Finance Framework. The approval of this Partial Credit Guarantee reflects the African Development Bank Group’s unwavering commitment to allow our regional member countries to make optimal use of their resources within the Bank Group windows to mobilize private capital”.

"This intervention will contribute to deepening financial markets through Togo's first-ever sustainable financing and expanding and diversifying the country's investor base,” said Ahmed Attout, Bank Group Director for Financial Sector Development.

” The proposed PCG will further prepare the country for similar fundraising efforts with lower levels of coverage or on its own risk, as international investors will become familiar with Togo’s credit risk through the proposed PCG,” he added.

The project is also aligned with Togo’s 2020-2025 Government Roadmap, a national strategic document setting out inclusive and sustainable growth targets, as well as ADF priorities targeting development of quality, sustainable, and climate-resilient infrastructure, and governance; and capacity-building and sustainable debt management in beneficiary countries.

Wilfrid Abiola, the Bank Group’s Country Manager for Togo, said: “The operation will support Togo's efforts to foster strong, equitable, and inclusive growth. It is in line with the Bank Group objective to contribute to the acceleration of the structural transformation and diversification of the Togolese economy to create decent jobs with high added value, and to build socio-economic resilience for sustainable and inclusive growth” added

Cover photo: The partial credit guarantee will enable the government of Togo to raise funds for projects aligned with the United Nations Sustainable Development Goals (SDGs).