Togo Prepares €350M Commercial Loans Backed by AfDB Guarantee

Public finance
Monday, 12 May 2025 14:39
Togo Prepares €350M Commercial Loans Backed by AfDB Guarantee

(Togo First) - Togo plans to raise €350 million through two commercial loans from international banks, confirmed S&P, following a €200 million guarantee from the African Development Bank (AfDB) secured in November 2024.

This first-time arrangement allows Lomé to access better market terms thanks to AfDB’s solid backing via the African Development Fund (ADF). Togo wants to fund green and social projects and reduce reliance on the costly, volatile regional debt market.

The Togolese government published its Sustainable Financing Framework in October 2024, validated by S&P. The loans will finance sustainable agriculture, water management, social protection, digital inclusion, and climate-resilient infrastructure.

Togo faces soaring regional rates and shorter maturities in the WAEMU market since 2022, pushing Lomé to rebalance its debt portfolio. S&P projects non-WAEMU financing could reach 50% of Togo’s debt by 2026, up from 42% at end-2024.

Togo has already secured a $200 million World Bank loan for 2025 and aims to finalize these two new AfDB-backed loans soon. While S&P cites several multilateral institutions as potential guarantors, only AfDB’s €200 million guarantee is public. The World Bank’s new Country Partnership Framework also offers innovative finance options through IDA and its guarantee platform, supported by MIGA.

This operation could set a precedent for other regional countries to combine commercial borrowing with multilateral guarantees to secure better financing terms.

This article was initially published in French by Fiacre E. Kakpo

Edited in English by Ange Jason Quenum

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