Ecobank secures $200 million loan to fund climate ambitions

Ecobank secures $200 million loan to fund climate ambitions

Ecobank Transnational Incorporated (ETI), a banking group based in Lomé, announced on Friday that it has signed an agreement to provide the lender with a $200 million sustainability-linked loan.

Proparco, Norfund, FMO, DEG, and EFP are the five European Development Institutions that make up this group.

The credit, which supports Ecobank Group's sustainability and climate strategy and includes a climate action plan, is reportedly the first of its kind given to a financial institution in sub-Saharan Africa.

According to an ETI statement, the German consulting firm IPC and Proparco, which is also the facility's lead arranger, will provide advisory support to ETI's teams in order to help them actualize the targets.

“Over the years, Proparco and Ecobank Group have continuously reinforced their partnership through Proparco’s provision of numerous loans, bond subscriptions and risk-sharing facilities including for trade finance to ETI and its subsidiaries, aimed at providing access to finance for underserved segments,” the document stated.

In June 2021, ETI made a similar move and raised $350 million worth of Tier 2 sustainability notes. The bond's maturity date is June 2031.

According to ETI, part of its commitment to addressing the sustainability issues the company faces is creating a climate disclosure report that includes details on its green lending practices, susceptibility to both physical and intangible climate risks, and exposure to carbon-intensive industries.

This calls for creating a climate strategy that includes goals for sustainable finance, first-sector decarbonization plans for the most carbon-intensive industries, a policy of exclusion for thermal coal mines and coal-fired power plants, and targets for reducing greenhouse gas emissions from both operational and financed sources of emissions.

“Sustainability is integral to Ecobank’s mandate and pan-African purpose,” said Jeremy Awori, chief executive officer of the Ecobank Group.

“The signature of 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.”