Economic development agency, the Emerging Africa Infrastructure Fund (EAIF) and pan-African multilateral development financial institution, the International Finance Corporation (IFC), have partnered to establish a special financing vehicle aimed at bolstering energy access in Ivory Coast.
Dubbed Fonds Commun de Titrisation de Créances Electricité Pour Tous (FCTC EPT), the investment vehicle represents the first-ever social asset-backed security in West Africa.
As co-investors, the EAIF and IFC will deploy the capital in two tranches, with financial consulting firm and arranger Africa Link Capital serving as mandated lead arranger. The IFC and EAIF will invest $96 billion via FCTC EPT, with the EAIF committing $48 million for the launch of the social asset-backed security. Certified as a social bond, distribution will be managed by Ivorian brokers BoA Capital Securities and NSIA Finance.
Josiane Kwenda, IFC Country Manager for Ivory Coast, said “This investment aligns with the Government of Ivory Coast’s vision to achieve universal access to electricity by 2030 and will bring hundreds of thousands of households onto the grid, greatly improving their living and working conditions.”
The first phase of the social bond will be supported by revenue generated from collected tariffs from the country’s Electricity for All program (PEPT) – an initiative that subsidizes upfront grid connection costs for low-income households.
Ivory Coast’s state-owned electricity utility Compagnie Ivoirienne d’Électricité will leverage the social bond to expand the grid network and connect over 800,000 low-income consumers to the grid over the next four years, thereby increasing the country’s energy access rate by 13%.
Having facilitated the connection of 1,6 million consumers onto the grid, “PEPT’s implementation has been a game changer to increase access to electricity for underserved populations in rural and urban areas in Ivory Coast,” stated Zahalo Silué, Chairman of PEPT’s Fund, adding that, “The IFC anchoring this first bond underscores the key role capital markets can play to support access to electricity and socio-economic development goals.”
The bond will also support the utility’s prepaid electric meter installation program.