Rome, Italy — The Italian Climate Fund has subscribed to the first ever hybrid bond for climate change mitigation issued by a multilateral bank, the West African Development Bank (BOAD).
The funds will be used to build and rehabilitate infrastructure for the production of electricity from renewable sources aimed at mitigating climate change and to diversify the energy mix, avoid CO2 emissions and reduce energy production costs.
The initiatives will be targeting the eight West African countries that hold equity in BOAD: Benin, Burkina Faso, Côte d’Ivoire, Niger, Senegal, Togo, Mali, and Guinea-Bissau.
A €100 million operation to finance projects addressing climate change mitigation in West Africa through the subscription of the first hybrid bond issued by a multilateral bank with this exclusive purpose. This is outlined in the agreement signed by the Italian Climate Fund, managed by Cassa Depositi e Prestiti (CDP) on behalf of the Ministry of Environment and Energy Security (MASE), and the West African Development Bank (BOAD), a multilateral development bank of the West African Economic and Monetary Union countries (WAEMU).
Specifically, the agreement, which was signed today at the headquarters of Cassa Depositi e Prestiti in the presence of Edmondo Cirielli, Deputy Minister of Foreign Affairs and International Cooperation; Serge Ekue, President of BOAD; and Dario Scannapieco, CEO of CDP, involves the subscription by the Climate Fund of a hybrid bond amounting to €100 million, issued by BOAD. The funds will be used to build and rehabilitate infrastructure for the production of electricity from renewable sources, in order to diversify the energy mix, avoid CO2 emissions and reduce energy production costs, thus contributing to the achievement of several UN Sustainable Development Goals (SDGs), especially SDG7 (“Affordable and Clean Energy”), in the WAEMU Member Countries: Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, e Togo.
“This Sustainable Hybrid Private Placement, issued in line with our Sustainability Framework, will help BOAD to strengthen its capital structure and therefore reinforce its rating profile while serving its Member Countries’ electricity generation needs. This second hybrid bond transaction closed by BOAD in accordance with its Djoliba Strategic Plan shows our commitment to further advance economic growth and sustainable development through impact-focused and innovative financing solutions” declared M. Serge EKUE, President and chairman of BOAD.
The Sustainable Hybrid Private Placement will enable BOAD to strengthen its capital structure, enhancing its ability to mobilize new climate finance in the region. The bond issue subscribed by the Italian Climate Fund is one of the first in the world of this kind issued by a multilateral bank, including the hybrid bond issued by the African Development Bank in January 2024. Finally, the initiative is in line with the recommendations formulated from the G20 during Italian presidency aimed at strengthening the investment capacity of multilateral development banks.
The Italian Climate Fund, with an allocation of 4.2 billion euros, is aimed at financing public and private projects in emerging and developing countries that contribute to the achievement of climate and environmental goals, in line with Italy’s international climate commitment.
“The Italian government’s commitment to selecting and supporting qualified entities to ensure concrete and productive investments in Africa continues, in perfect alignment with the objectives and guidelines of the Mattei Plan” stated Gilberto Pichetto Fratin, Italian Minister of Environment and Energy Security. “Countries will benefit from the first euro-denominated hybrid bond that the Ministry of the Environment and Energy Security has been able to create, thanks to the technical and financial expertise of Cassa Depositi e Prestiti. The installation of green energy plants will support sustainable economic growth in Africa, and at the same time, the proposed financial solution is highly innovative: a distinctly Italian approach that highlights our new way of engaging in cooperation with African countries.”
“Steps like the signing of this agreement allow us to realize the vision of the Mattei Plan, particularly confirming the strategic role of the Climate Fund,” stated Edmondo Cirielli, Deputy Minister of Foreign Affairs and International Cooperation, who spoke at the signing ceremony. “We aim to promote economic growth and environmental sustainability in West Africa and across the continent, always in a spirit of equal partnership. Actors like CDP and BOAD are crucial in this context.”
“This operation marks a significant milestone for the Italian Climate Fund, the climate finance instrument of the Italian government, managed by CDP on behalf of the Ministry of the Environment and Energy Security. The first euro-denominated hybrid bond issued by an African multilateral development institution, which will have tangible benefits for the capitalization of BOAD and, consequently, the African banking system, will allocate additional resources to support projects in the renewable energy sectors across eight West African countries. This is another initiative, which adds to the initiatives already undertaken as part of the Mattei Plan, aimed at promoting the continent’s efforts towards climate change mitigation, in line with the United Nations’ Agenda 2030 Sustainable Development Goals,” has declared Dario Scannapieco, CEO of Cassa Depositi e Prestiti.
