African Development Fund and Republic of Togo Sign Agreement for EUR 200 Million Sustainable Loan

Lomé: The African Development Bank Group and the Government of Togo have signed a partial credit guarantee agreement to support the country's mobilization of a sustainable financing facility of EUR 200 million. Provided by the African Development Fund, the concessional lending arm of the African Development Bank Group, this partial credit guarantee will enable the government of Togo to leverage its country performance-based allocation by four times to raise EUR 200 million from international commercial lenders including Legal and General (L and G) and Deutsche Bank. The African Development Bank is the lead arranger. According to African Press Organization, funds mobilized under the partial credit guarantee will be allocated to green and social projects including climate adaptation, biodiversity preservation, sustainable agriculture, access to clean energy, and pollution control. This is in line with Togo's Sustainable Financing Framework as well as the country's 2020-2025 Government Roadmap, which prioritize s inclusive growth and climate-resilient development. Jake Harper, Senior Investment Manager, Asset Management at L and G, stated that channeling debt financing for sustainable outcomes will generate momentum towards bridging the $4 trillion annual SDG funding gap. L and G is proud to have partnered with the Fund as its first non-bank beneficiary lender, and the Government of Togo to support the sovereign's crucial growth agenda. These transactions and innovative financing methods are combating the historic risk-return misperception and demonstrating the compelling investment opportunity for commercial institutional investors to contribute to global sustainable development with investment-grade credit risk. Maryam Khosrowshahi, Deutsche Bank Managing Director, Chair Global Sub-Saharan Africa, Head Sub-Saharan Africa Coverage, expressed that Deutsche Bank is honored to have been selected to work on this landmark inaugural exercise for the Republic of Togo together with partners at L and G, as well as the Afr ican Development Fund, and Global Sovereign Advisory, Financial Advisors to the country. They have been able to deliver long-term funding to the country at efficient terms in support of critical green and social projects under their Sustainable Finance Framework. Approval of this sovereign operation comes as the African Development Fund enters the final stages of its 17th replenishment process. The project aligns with the Fund's intended shift toward directly accessing capital markets. This transaction also showcases the innovative use of the ADF guarantee to increase financing volumes available for low-income countries, beyond the traditional performance-based allocations. It marks the first use of the Guarantor-of-Record structure with the ADF sharing a portion of the guarantee exposure with highly rated credit insurance partners, said Hassatou NSele, Bank Group Chief Financial Officer and Vice-President.