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Strong demand for Côte d’Ivoire’s first corporate green bond


A Côte d’Ivoire shopping mall owner has issued the first corporate green bond in Francophone West and Central Africa, with market participants expecting the deal to spur further issuance in the region.

The eight-year notes from Emergence Plaza, the owner of Côte d’Ivoire’s most visited retail complex Cosmos Yopougon, were issued today at a yield of 7.5%. Proceeds from the CFA10bn (US$18.1m) bond will be used to refinance an existing local bank loan and to reinforce the financial and operational strength of the company. The bond, which was oversubscribed, priced at 150 basis points lower than the 9% interest rate it was paying on an existing CFA8.4bn bank loan. 

Growing sustainable finance in Africa

The rapidly growing global market for green bond issuance has eluded most in Africa, with the continent accounting for fewer than 1% of the more than US$300bn of green bonds issued annually. Of the total US$3.96bn of green debt issued to date in Africa, just US$64m was issued by non-financial companies prior to the Cosmos Yopougon deal, according to data compiled by the Climate Bonds Initiative, a green finance advocacy group. Cosmos Yopougon is one of only three African non-financial companies to issue a green bond, following deals by Acorn Holdings in Kenya and North South Power Company in Nigeria. The issue also marks the first green bond from a West African real estate-related company.

"Much of Africa has been unable to benefit from the international clamour for green bonds to spur environmentally friendly commerce at competitive borrowing costs for those able to demonstrate their green credentials," said Jean François Brou, chief executive officer of Société Ouest Africaine de Gestion d'Actifs (SOAGA) in Cotonou (Benin), which manages CFA80bn of assets and bought the Cosmos Yopougon bonds. "I expect this landmark deal will help kickstart more green bond issuance from local companies that see the value in aligning their businesses with independently verified ecological and business targets."

A shopping success story

Opening its doors in 2018, the Cosmos Yopougon shopping mall was the first operational building in Francophone West and Central Africa to be awarded the EDGE green building certificate by the World Bank Group’s International Finance Corporation - an initiative to encourage developers to design their buildings with resource efficiency in mind. EDGE’s monitoring software helps building managers reduce water and power consumption. Cosmos Yopougon cut its carbon emissions by 44% last year by using the EDGE system to optimise its energy use. 

"It is encouraging to see the success of Francophone West and Central Africa’s debut green bond, which we believe will be the first of many in the region," said Kadi Fadika-Coulibaly, Managing Partner of Hudson & CIE, the placement agent of the transaction. "The development of this market is especially important in light of the UN’s recent climate change report, which underscores the need for issuers and investors to increase their focus on sustainability issues. At the same time, we also recognise the potential for green bonds to support more environmentally friendly real estate investment and development, so we believe this bond will pave the way for more issuance on that front as well."

Cosmos Yopougon has teamed up with local clean tech companies to further expand the building’s sustainability initiatives, including collaboration with local waste recycling businesses. Through this initiative, the shopping mall managers measure precisely how much waste has been recycled on a daily basis, with a target of 20% of all waste to be recycled by the end of this year and 25% by the end of 2022. 

"Our experience shows that you can integrate climate initiatives, be cost efficient and ultimately deliver attractive returns for investors; it doesn’t necessarily cost more to be green," said Cheick Sanankoua, co-founder and managing partner of HC Capital Properties, which developed, financed, and manages Cosmos Yopougon. "This has helped put green financing on the map in the region - if you build green you can get access to competitive financing, which is a language people understand. Hopefully that gets more people to start thinking about alternative ways to improve their projects by making them ecologically sound."

Cosmos Yopougon’s ethos is focused on both environmental and social sustainability. The shopping mall is targeted at low-to-middle income consumers - the first retail complex of its scale to serve this market segment in the Francophone West and Central Africa region. This has paid off by making Cosmos Yopougon the most visited shopping centre in the region, with a record 397,360 monthly footfall in May 2021 and a very high occupancy rate of 93%. HC Capital Properties says it plans to issue further green bonds to finance the development of more retail complexes in Francophone West & Central Africa.

"Our entire business model is centred on providing world standard retail and leisure without solely targeting the rich and elites," says Sanankoua. "Cosmos Yopougon is the first of many shopping centres we intend to build in the future that caters to this market - all of which will support job creation and help formalise the economy as well as develop local supply chains and allow local stores and businesses to grow."

Local placement agent Hudson & CIE structured and arranged the bond sale, while French law firm Gide was the legal advisor on the deal.

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