Italy’s Climate Fund invests $100 million in West African Development Bank to help combat climate change
The Italian Climate Fund has invested €100 million in the West African Development Bank (BOAD) to support renewable energy projects in eight West African countries.
The funds will be used to build and rehabilitate infrastructure for renewable energy production, reducing CO2 emissions and energy costs.
The investment is part of Italy’s commitment to climate change mitigation and sustainable development in Africa. The agreement was signed by the Italian Climate Fund, managed by Cassa Depositi e Prestiti (CDP), and BOAD, a multilateral development bank.
The eight beneficiary countries are Benin, Burkina Faso, Côte d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal, and Togo. The project aligns with the United Nations’ Sustainable Development Goals, particularly SDG7 (“Affordable and Clean Energy”).
This investment marks a significant milestone in Italy’s efforts to support climate change mitigation in Africa, promoting economic growth and environmental sustainability through innovative financing solutions. The Italian Climate Fund, with an allocation of 4.2 billion euros, aims to finance public and private projects in emerging and developing countries that contribute to climate and environmental goals.
The agreement is also in line with the recommendations formulated by the G20 during Italy’s presidency, aimed at strengthening the investment capacity of multilateral development banks. The investment is expected to have a tangible impact on the region, supporting sustainable economic growth and reducing reliance on fossil fuels.
BOAD President Serge Ekue emphasized the importance of the investment, stating that it will help strengthen BOAD’s capital structure and reinforce its rating profile while serving the electricity generation needs of its member countries.
This Sustainable Hybrid Private Placement, issued in line with our Sustainability Framework, will help BOAD to strengthen its capital structure and therefore reinforce its rating profile while serving its Member Countries’ electricity generation needs. This second hybrid bond transaction closed by BOAD in accordance with its Djoliba Strategic Plan shows our commitment to further advance economic growth and sustainable development through impact-focused and innovative financing solutions” declared M. Serge EKUE, President and chairman of BOAD.
Italian Minister of Environment and Energy Security Gilberto Pichetto Fratin highlighted the innovative approach of the investment, showcasing Italy’s commitment to supporting Africa’s sustainable development.
The Italian government’s commitment to selecting and supporting qualified entities to ensure concrete and productive investments in Africa continues, in perfect alignment with the objectives and guidelines of the Mattei Plan” stated Gilberto Pichetto Fratin, Italian Minister of Environment and Energy Security. “Countries will benefit from the first euro-denominated hybrid bond that the Ministry of the Environment and Energy Security has been able to create, thanks to the technical and financial expertise of Cassa Depositi e Prestiti. The installation of green energy plants will support sustainable economic growth in Africa, and at the same time, the proposed financial solution is highly innovative: a distinctly Italian approach that highlights our new way of engaging in cooperation with African countries.”
The Sustainable Hybrid Private Placement will enable BOAD to strengthen its capital structure, enhancing its ability to mobilize new climate finance in the region.
The bond issue subscribed by the Italian Climate Fund is one of the first in the world of this kind issued by a multilateral bank, including the hybrid bond issued by the African Development Bank in January 2024.
Finally, the initiative is in line with the recommendations formulated from the G20 during Italian presidency aimed at strengthening the investment capacity of multilateral development banks.
About the Italian Climate Fund:
The Italian Climate Fund is the innovative financial instrument promoted by the Italian government to support climate finance projects in developing countries and emerging markets. The Fund, established by the Budget Law 2022 at the Ministry of Environment and Energy Security and managed by Cassa Depositi e Prestiti S.p.A., has an endowment of 4.2 billion euros and is dedicated to finance initiatives across both public and private sector aimed at fostering the achievement of the goals set by international agreements on climate and environmental protection to which Italy is a party.
