In a groundbreaking development, Ecobank Transnational Incorporated (ETI), the Lomé-based parent company of the Ecobank Group, has successfully secured a $200 million Sustainability-Linked Loan (SLL) in collaboration with a syndicate of European Development Finance Institutions (EDFIs) led by Proparco. This marks a significant milestone as the first-ever sustainability-linked loan to a sub-Saharan African financial institution.
The syndicate, comprising Proparco, Norfund, DEG, FMO, and EFP, announced their support for Ecobank Group’s Sustainability and Climate strategy through this substantial loan. The facility is intricately tied to two major climate commitments, namely Climate Disclosures and the formulation of a comprehensive Climate Strategy, further solidifying Ecobank’s dedication to environmental sustainability.
As part of the collaboration, Proparco, in conjunction with German consulting firm IPC, will provide extensive advisory support to assist Ecobank in achieving its ambitious climate-related targets. The loan is a testament to the ongoing partnership between Proparco and Ecobank Group, which has seen the provision of various financial instruments and facilities aimed at fostering financial inclusion and supporting underserved segments.
Ecobank Transnational Incorporated oversees 33 banking subsidiaries across the African continent and is recognized as a key player in the sub-Saharan Africa banking sector. The Sustainability-Linked Loan represents a strategic move by ETI to integrate sustainability into its operations and financing strategy, signaling its commitment to address environmental challenges prevalent in the financial industry.
The key components of ETI’s sustainability commitments include the development of a comprehensive Climate Disclosure report, communicating the institution’s green lending practices, exposure to carbon-intensive sectors, and physical climate risks. Additionally, a robust Climate Strategy is being formulated, encompassing sustainable finance objectives, GHG emissions reduction targets, and sector decarbonization strategies.
The successful financing arrangement has received backing from several European DFIs, highlighting the confidence of ETI’s banking partners in the pan-African banking group. Proparco played a pivotal role as the lead arranger and lender, supported by Norfund, DEG, FMO, and European Financing Partners.
Jeremy Awori, CEO of the Ecobank Group, expressed his enthusiasm for the collaboration, stating, “Sustainability is integral to Ecobank’s mandate and pan-African purpose. 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.”
Françoise LOMBARD, CEO of Proparco, emphasized the historic nature of the transaction, stating, “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.”
The collaboration between Ecobank and the European DFIs signifies a significant step toward promoting sustainable financing practices and making a positive impact across the African continent. The loan is expected to empower Ecobank in implementing its ambitious sustainability objectives, setting a precedent for climate action within the African financial sector.