COP28: Ecobank signs its SLL for US$200m with a Syndicate of EDFIs led by Proparco


COP28: Ecobank signs its SLL for US$200m with a Syndicate of EDFIs led by Proparco

A US$200 million Sustainability-Linked Loan has been launched by a syndicate of European Development Finance Institutions (EDFIs), chaired by Proparco and comprising Norfund, DEG, FMO, and EFP, to support the Sustainability and Climate strategy of Ecobank Group.

Since this is the first sustainability-linked loan to a financial institution in sub-Saharan Africa, it represents a significant milestone. The establishment of a climate strategy and the release of Climate Disclosures are two significant climate commitments that are connected to the facility.

A Climate Action Plan is also included in the facility. The teams at Ecobank Transnational Incorporated will receive long-term advising support from Proparco in collaboration with the German consulting firm IPC to help them meet these challenging goals.

The parent organization of the Ecobank Group, which is in charge of 33 banking subsidiaries throughout Africa, is Ecobank Transnational Incorporated (ETI), with its headquarters located in Lomé. ETI is a major player in the banking industry in sub-Saharan Africa, providing market-leading financial services and a wide range of products for SMEs, even in unstable economic environments.

Proparco has consistently strengthened its relationship with the Ecobank Group over the years by offering a variety of loans, bond subscriptions, and risk-sharing programs, including trade finance to ETI and its affiliates, with the goal of granting underprivileged groups access to capital.

ETI is taking bold steps to address sustainability issues that the company faces and that are typical in the financial sector as part of its goal to progressively incorporate sustainability into its operations and finance strategy. Thus, ETI has committed to creating
1. A report on climate disclosure to discuss its exposure to physical climate hazards, exposure to carbon-intensive sectors, and green lending; and

2. A climate strategy that includes goals for sustainable finance, targets for reducing greenhouse gas emissions from both operational and financed sources, first-sector decarbonization plans for the industries with the highest levels of carbon emissions, and an exclusion policy for thermal coal mines and coal-fired power stations.

Numerous European Development Funds (DFIs) have backed this finance, indicating how confident ETI's banking partners are in the pan-African banking organization. Leading arranger and lender Proparco was followed by European Financing Partners, DEG, FMO, and Norfund. This deal demonstrates the caliber of ETI's leadership in the African banking industry and how it is opening doors for other players.

Through this partnership, Ecobank will be able to accomplish sustainable goals and make a big difference.

Jeremy Awori, Chief Executive Officer of the Ecobank Group, commented:

 “Sustainability is integral to Ecobank’s mandate and pan-African purpose. The signature of this sustainability-linked loan agreement is another confirmation of the seriousness which the Ecobank Group accords to sustainability, which for us is both a responsibility as well as an opportunity. This sustainability-linked loan builds upon our success as the first pan-African banking Group to issue Tier 2 Sustainability Notes in 2021. We take pride in paving the way for other financial institutions on the continent. We are grateful for the collaboration with our esteemed partners, led by Proparco, including Norfund, DEG, FMO, and European Financing Partners. Together we are committed to making a positive impact and promoting sustainable financing practices across the continent”.

Proparco is proud to support a long-standing partner in integrating the climate agenda as a cornerstone of its strategy and operations. ETI is paving the way for the entire African financial industry. This first ever Sustainability-linked loan to a banking group in sub-Saharan Africa is a flagship” said Françoise LOMBARD, Chief Executive Officer of Proparco.

Norfund is proud to once again support ETI – one of the leading pan-African financial institutions – in its important role of providing essential financial services across the Continent” said Tellef Thorleifsson Chief Executive Officer of Norfund.

DEG is delighted to continue this important partnership with ETI as a leading pan-African banking group. We look forward to ETI becoming an important catalyst for climate action across the continent by means of this facility that is also perfectly aligned with DEG’s Impact and Climate strategy” commented Michael FISCHER, DEG’s Director Financial Institutions Africa.

“ETI has been a client of FMO for more than a decade and is considered a long-standing partner. We are very happy to follow Proparco in this Friendship Facility, focused on the Climate Strategy of the Group, reflecting ETI’s pro-active ambition on this front. FMO’s funds will be geared towards Least Developed Countries, making a difference there where it is needed the most,’’ said Michael Jongeneel, CEO of FMO.  

“No financial institution can afford to ignore the opportunities and challenges that a changing climate presents. Today, ETI and Proparco break new ground for climate action in Africa,” added Dörte Weidig, Managing Partner at IPC

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