ATIDI, BOAD Sign Non-Sovereign Loan Portfolio Cover to Enhance Investments in Key Economic Sectors

• ATIDI and the West African Development Bank (BOAD) sign EUR100 million portfolio cover policy. 
• ATIDI will provide a five-year comprehensive non-payment cover to a portfolio of current outstanding loans issued by BOAD to non-sovereign entities across West Africa. 
• This transaction represents a significant milestone between ATIDI and BOAD’s efforts to mobilize private sector investments in various economic sectors of the WAEMU region 

Nairobi, 30 May, 2024: The African Trade & Investment Development Insurance (ATIDI) and the West African Development Bank (BOAD) signed a five-year, EUR100 million portfolio cover policy on current outstanding loans issued by BOAD to non- sovereign entities in Benin, Burkina Faso, Côte d’Ivoire, Senegal and Togo.

ATIDI will provide a comprehensive non-payment cover to BOAD’s portfolio of outstanding loans. Specifically, it will cover first loss principal repayments on a pro rata basis with the Bank, up to a maximum limit of EUR100 million across the EUR224 million loan portfolio. During the policy period, BOAD and ATIDI may also agree on attaching new loans to the portfolio.

By leveraging ATIDI’s risk mitigation tools and expertise, BOAD will obtain capital relief as the loan portfolio amortizes. The benefits of capital relief are multifold. Firstly, it enables BOAD to optimize its capital allocation by reducing the required amount of capital reserves, thereby freeing up resources for additional lending activities. Secondly, it enhances BOAD’s risk-adjusted returns by improving the efficiency of its balance sheet and lowering the cost of capital, ultimately bolstering its financial performance and sustainability. Lastly, it strengthens BOAD’s capacity to support key development projects in its Member States by providing greater financial flexibility and resilience against adverse market conditions or unforeseen events.

The cover represents a significant milestone between ATIDI and BOAD’s efforts to mobilize private sector investments in high-impact economic sectors such as energy, transportation, digitization, financial services and housing. By offering comprehensive coverage for eligible loans extended by financial institutions to projects in these priority areas, ATIDI mitigates risks and incentivize lenders to channel funds into high-impact ventures.

The deal also underscores the importance of multilateral cooperation in addressing complex development challenges and creating an enabling environment for private sector participation in emerging markets. It is the second balance sheet optimization transaction ATIDI has supported, the first being the African Development Bank’s ‘Room to run’ for the private sector, valued at USD500 million on which ATIDI is still on-risk.

Quote from Manuel Moses, CEO, ATIDI:

« We are honored to partner with BOAD in launching this innovative policy, which underscores our shared commitment to promoting sustainable development and private sector investment in West Africa, and notably in Member States of our organization. We believe that the policy will play a catalytic role in mobilizing private sector investments and accelerating the pace of socio-economic progress across the region.”

Quote from Serge EKUE, BOAD President:

While tightening our collaboration with ATIDI, this forward-thinking operation marks a significant step in our strategy to leverage the credit insurance market, which we initiated in November 2021. It increases the insured portion of the Bank’s loan portfolio to approximately 15%, thereby enhancing its overall rating.”

Press Release 2024/03/05/Nairobi

Press Contacts:

ATIDI

Lawrence Mensah

Sr. Communications Officer African Trade & Investment Development Insurance l.mensah@atidi.africa

BOAD

Communication and Public Relations Department

Tel.: +228 22 23 25 65

Fax: +228 22 23 24 38

Email: boadsiege@boad.org

Note to editors:

About ATIDI

ATIDI was founded in 2001 by African States to cover trade and investment risks of companies doing business in Africa. ATIDI predominantly provides Political Risk, Credit Insurance and, Surety Insurance. Since inception, ATIDI has supported USD85 billion worth of investments and cross border trade into Africa. For over a decade, ATIDI has maintained an ‘A/Stable’ rating for Financial Strength and Counterparty Credit by Standard & Poor’s, and in 2019, ATIDI obtained an A3/Stable rating from Moody’s, which has now been revised to A3/Positive.

www.atidi.africa – Media registration link: https://www.atidi.africa/media-kit/

About BOAD

The West African Development Bank (BOAD) is the common development finance institution of the member countries of the West African Economic and Monetary Union (WAEMU). It is an international public institution whose purpose, as provided under Article 2 of its Articles of Association, is to promote the balanced development of its member countries and foster economic integration within West Africa by financing priority development projects. It is accredited to the three climate finance facilities (GEF, AF, GCF). Since 2009, BOAD sits as an observer at the UNFCCC and actively participates in discussions on devising an international climate finance system. Since January 2013, it has been home to the first Regional Collaboration Centre (RCC) on Clean Development Mechanism (CDM), whose aim is to provide direct support to governments, NGOs and the private sector in identifying and developing CDM projects. The Bank is an active member of the International Development Finance Club (IDFC) bringing together 26 national, regional and bilateral development banks.