West African Development Bank (BOAD) and International Finance Corporation (IFC) Sign €600 Million Reciprocal Financing Agreement to Strengthen Local Currency Financing in West Africa
The West African Development Bank (BOAD) and the International Finance Corporation (IFC), a member of the World Bank Group, have announced a significant partnership aimed at enhancing local currency financing, fostering private sector growth, and creating jobs within the West African Economic and Monetary Union (WAEMU). This agreement, signed during the Africa CEO Forum in Kigali, involves two reciprocal financing facilities totaling up to €600 million, available in both euros (EUR) and West African CFA francs (XOF).
Partnership Details and Strategic Goals
Under the terms of this collaboration, the IFC will extend long-term EUR funding to BOAD. This funding is intended to facilitate the bank’s lending activities across various sectors, including energy, agribusiness, transport, urban development, and micro, small, and medium enterprises (MSMEs) in alignment with BOAD’s strategic plan for 2026-2030, titled “Djoliba….La suite.” In exchange, BOAD will offer the IFC a flexible XOF facility designed to support cost-effective, long-term local currency financing for impactful projects that generate employment in the region.
This initiative, supported by Galite, BOAD’s structuring advisor, aims to institutionalize local currency financing as a foundational element of regional development in West Africa.
Significance of the Agreement
Makhtar Diop, Managing Director of the IFC, emphasized the importance of this transaction, noting that it marks the first reciprocal facility established between development finance institutions. He stated that this partnership will not only enhance BOAD’s capacity to expand private-sector lending across WAEMU but will also diversify IFC’s sources of long-term local currency financing at competitive rates. This, in turn, will benefit various projects while promoting regional growth and job creation. Diop highlighted that the agreement underscores the strength of the partnership between BOAD and IFC, showcasing their ability to deliver effective financial solutions in support of the IFC’s 2030 objectives.
Serge Ekué, President of BOAD, reiterated the significance of improving access to long-term local currency financing as a core priority of the “Djoliba…La suite” strategic plan. He noted that the collaboration with IFC enhances BOAD’s ability to serve the private sector across all eight member states of WAEMU. Ekué remarked that this operation reflects a mutual ambition to deepen cooperation between development finance institutions, thereby supporting sustainable and inclusive growth in West Africa.
Challenges in the WAEMU Region
In the WAEMU region, the predominance of short-term bank lending poses challenges for securing long-term financing necessary for infrastructure and other transformative investments across various sectors. Given that most private sector borrowers generate revenues in XOF, local currency financing is crucial for mitigating foreign-exchange risks.
The reciprocal financing structure aims to optimize resource mobilization, aligning the long-term objectives of both institutions with the financing needs of WAEMU. It is expected to strengthen local markets by bolstering the XOF market and expanding diverse, resilient funding options for West African enterprises. Additionally, this initiative will contribute to macroeconomic stability by helping to preserve the stability of foreign-exchange reserves throughout the WAEMU region.
Historical Collaboration Between BOAD and IFC
The IFC and BOAD have established a robust history of collaboration in the WAEMU region, with joint financing initiatives in key growth sectors such as housing, MSME finance, digital development, and infrastructure. This latest agreement further solidifies their commitment to fostering economic development and resilience in West Africa.
For further details, refer to the original reporting source: www.zawya.com.
Published on 2026-05-15 23:43:00 • By the Editorial Desk
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