(Ecofin Agency) – BADEA is about to finalize an increase in its shares in the capital of BOAD, after a series of capital support operations for the institution headed by Serge Ekué. Sidi Ould Tah, president of BADEA, indicated that the Arab bank plans to extend these financing mechanisms to around ten other entities, including development banks and guarantee funds.
The Arab Bank for Economic Development in Africa (BADEA), rated Aa2 by Moody’s, is finalizing a new injection of $100 million into the capital of the West African Development Bank (BOAD), announced Serge Ekué , President of BOAD, during the Rebranding Africa Forum, which was held in Brussels from October 17 to 19, 2024.
« BADEA finalizes a contribution of 100 million additional capital. Currently, it holds 1% of our capital, and this will increase to 3% “, explained the capital markets specialist. This contribution comes in addition to a series of successive investments, bringing BADEA’s capital commitments to more than 600 million euros in the West African institution.
This new operation follows a first phase of recapitalization, completed in December 2022, which enabled the Lomé-based bank to raise 554.38 billion FCFA (around 843 million euros). The Arab Bank then lent 400 million euros to WAEMU member states to finance their share in the BOAD capital increase.
In December 2023, the second phase of recapitalization, approved by the WAEMU Council of Ministers, allowed BADEA to acquire the status of category B shareholder, with a participation of 30 million dollars (18.48 billion FCFA), equivalent to 1.2% of the subscribed capital of BOAD, which grants him a place on the board of directors. At the same time, BADEA also invested in the first hybrid capital instrument developed by BOAD for an amount of $100 million.
« With this new injection of 100 million dollars, BADEA will have contributed 600 million euros to strengthening our capital. This amount, thanks to the leverage effect, will allow us to mobilize up to 2.4 billion euros in financing capacity ,” emphasized Serge Ekué.
Sidi Ould Tah, during a separate press briefing, justified this massive commitment by the importance of BOAD for the UEMOA zone. “ BOAD is a key institution, with solid governance and a well-established strategic plan. This is why we decided to support its recapitalization with an innovative financial mechanism, making it possible to raise funds on international and regional markets. »
The former Mauritanian Minister of Economy and Finance revealed that, in addition to BOAD, around ten other institutions are about to benefit from similar financing, in the form of concessional loans to States or hybrid instruments intended for regional development banks and guarantee funds. “ Guarantee funds play an important role in removing the obstacles faced by SMEs in accessing financing, in particular the absence of guarantees “, explained Sidi Ould Tah.
Last June, BADEA also announced its intention to acquire a stake in the African Solidarity Fund (FSA), a multilateral financial guarantee institution based in Niamey – one of the best rated on the continent – with a contribution of $286.8 million.
Fiacre E. Kakpo, special envoy to Brussels
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