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BOAD issued the first-ever Sustainability Bond in Africa

2-minute read


On January 14th, Banque Ouest Africaine de Développement (BOAD), the regional development bank of the member states of the West African Economic and Monetary Union (WAEMU), issued the first ever Sustainability Bond in Africa. Natixis was appointed Sole Structuring Advisor & Joint Bookrunner.


This Sustainability Bond Framework is “overarching” and will pave the way for future bond issuances in various formats: Green Bonds, Social Bonds & Sustainability Bonds. Amounting to €750 million with a 12-year maturity, the inaugural transaction was significantly oversubscribed by 6 times with anchor orders 80% from Europe and 17% from the U.S. and drawing key SRI investors’ interest (reportedly more than 80% of the book according to our proprietary classification). It led to best coupon (2.75%) and Reoffer Spread (MS +300 bps) conditions ever achieved by the bank in the international market.


A Framework consistent with BOAD’s ambition to improve socio-economic & living conditions of the populations in the WAEMU

Within WAEMU, progress in human development has been slow despite the implementation of different national and regional development strategies. According to the Human Development Report from the UNDP [1] and its Human Development Index (HDI), member states are still classified as countries with low human development scores and remain below the Sub-Saharan countries' average.


In this context and as emphasized in its new Strategic Plan for 2021-2025 (DJOLIBA), BOAD appears as a key player to counterbalance this dynamic and intends to become “the Reference Bank, for a sustainable impact on the integration and transformation of West Africa”.


The Sustainability Bond Framework is therefore fully aligned with the Bank’s DNA and its objectives to contributing to the UN Sustainable Development Goals.


Framework’s key highlights: broad scope of eligible project categories with granular & localized eligibility criteria “to leave no one behind” [2]

In line with BOAD’s broad mandate to financing priority development projects, the Framework combines a large scope of projects falling under 26 sub-categories of eligible categories (13 social & 13 green) leveraging from granular suitable criteria aiming to be aligned with best market practices but also localized with the region’s features & specificities. The exemplary nature of the bank’s commitments in this Framework has been valued in Vigeo’s Second Party Opinion [3], which gave its highest assessments scores on the alignment with ICMA’s Green & Social Bond Principles.


Innovative Geospatial eligibility criteria have been included for some Eligible Social Projects (i.e. development of electricity transmission & distribution infrastructure when less than 50% of the population has access to electricity or development of rural and feeder roads and Public transport for rural population living at more than 2 km away from an all season road) in order to ensure that those expenditures are directed towards areas where the social objectives gaps are the greatest.


These geospatial criteria rely on WAEMU’s poverty mapping analysis that are conducted by the Statistical Institutes in each WAEMU country. We emphasize the fact that poverty in the WAEMU is higher in rural zones: average poverty rate in rural areas is almost double that of urban sectors, reflecting inequality of opportunities within those areas (on average, poverty rate stands at 27.5% in urban areas versus 54% in rural ones).


Natixis has had the honor to be mandated as Sole Sustainability Bond Framework Structuring Advisor under the leadership & full dedication from all relevant BOAD’s teams (Resources Mobilization, Development Evaluation Results, Climate Finance, Environment, Private Sectors, Infrastructure & Finance).


[1] United Nations Development Program (UNDP), Human Development Report 2019 - available here.

[2] Banque Ouest Africaine de Développement (BOAD), Sustainability Bond Framework (January 2021) - available here.

[3] Vigeo Eiris, Second Party Opinion on the sustainability of BOAD’s Sustainability Framework (December 2020) - available here.