Structured financing with positive impact

Investments in green growth
Orabank is committed to supporting investment through adaptation to global warming, facilitating access to affordable sustainable energy to ensure the development of a low-carbon economy and to participate in mitigating the causes of climate change. In the context of the fight against climate change, the Orabank Group advises its customers, industrialists, service providers or institutions in renewing their energy resources so as to replace fossil fuel consumption with renewable and clean energy.
In developing countries, financing for green growth is a major challenge and the Orabank Group wishes to position itself as the reference bank for the structured financing of responsible projects of a large scale promoting economic and social development. Its ambition is to develop a specialized financing offer >5 million€, requiring a specific approach in terms of structuring (amount, duration of the loan, legal and financial arrangement).
In 2020, Orabank Togo sponsored and actively participated in the activities of the association “TERREAU Fertile” which works in the field of promoting socio-economic and cultural investment, and facilitating and promoting trade. Orabank Togo was invited to take part in the FERIN trade fair. This meeting allows the facilitation of exchanges, the promotion of investments and entrepreneurship between various public and private bodies.
Oragroup has arranged, alongside its subsidiary Orabank Gabon, a bond issue in the form of green bonds of FCFA 20 billion launched by FMCT (Façade Maritime du Champ Triomphal), a subsidiary of FGIS. Orabank Gabon participated in this operation up to 10 billion FCFA. The funds raised will finance a real estate project comprising three (3) buildings. These buildings will be subject to an environmental certification Excellence in Design for Greater Efficiency (EDGE). Developed by the International Finance Corporation (IFC), a subsidiary of the World Bank, EDGE certification is awarded to buildings of all types that have reduced energy and water consumption by more than 20% compared to the average for their country and region.
On July 10, 2020, Oragroup and the West African Development Bank (BOAD) announced the closing of the financing of approximately 60 billion FCFA of the Kékéli Efficient Power thermal power plant in Togo. This project is sponsored by Eranove and its subsidiary Kekeli Efficient Power and the Oragroup consortium and the BOAD for the mobilization of 70% of the financing of this project. The construction of this 65MW plant, with an estimated cost of 86 billion FCFA, will use the combined gas-steam cycle technology. This technology will produce more electricity without additional gas consumption and by limiting CO2 emissions to 30% of the atmosphere. Orabank Togo, the subsidiary of the Orabank banking group, is also involved in the project as a security agent, bank and lender, together with the West African Development Bank, in a banking pool that also includes the Africa Finance Corporation (AFC), the Banque Atlantique Togo, the Banque Internationale pour l’Afrique au Togo (BIA Togo) and NSIA Banque Benin.
On 5 March 2021, Africa50, the pan-African infrastructure investment platform, and its partners, together with Oragroup, holding company of the pan-African banking group Orabank, announced the establishment of a FCFA 50 billion bridge loan mobilized from Orabank Senegal, Orabank Benin, Orabank Burkina and other Orabank Group partner banks. The Malicounda project, whose shareholding consists of Melec Powergen, Africa50, and the national electricity company Senelec, consists of the construction and operation of a 120MW combined cycle power plant, located in Malicounda, 85 kilometers from Dakar. Oragroup has structured and arranged the syndication of the bridge loan to a bank pool made up of UEMOA banks, which will allow the remaining construction work to be completed during the year. Through this operation, the Orabank Group confirms its strategic vision, its leadership in its countries of presence, in the support and financing of major infrastructure projects by commercial banks, particularly in the energy sector.

SUNREF project towards a low carbon transition

In order to promote private investments in the field of energy control in West Africa, the Agence Française de Développement (AFD) supports the banks of the region in the allocation of credits for “green” projects under the SUNREF program. West Africa is experiencing an energy crisis that is hampering its economic and social development. Many countries in the region are therefore facing significant difficulties due to the growing gap between energy demand, supply capacity and low level of investment in the sector. In this context, SUNREF, the AFD Green Finance label, aims to facilitate access to affordable sustainable energy to ensure the development of a low-carbon economy and to contribute to the mitigation of the causes of climate change. Through SUNREF West Africa, AFD assists countries in the region in reducing their greenhouse gas emissions and energy dependence on external sources through the use of local resources. All this while promoting sustainable and environmentally friendly socio-economic development.
In order to optimize private sector energy consumption, AFD supports green investment projects through SUNREF and encourages West African banks to finance the renewable energy and energy efficiency sectors. SUNREF is one of the innovative tools developed by the Agence Française de Développement (AFD) and co-financed with the European Union and the French Global Environment Facility to promote the emergence of a “green” finance adapted to the needs of the economic players of countries in transition. As part of a partnership with AFD, the Orabank Group financed numerous projects between 2014 and 2018 to support the development of a low-carbon economy in West Africa and enable economic actors to adapt to this transformation. Among SUNREF’s partner banks, Oragroup has been a key partner in this program. Projects funded by Oragroup are located in Togo, Senegal, Burkina Faso, Benin and Niger.
Oragroup was able to support the financing of 12 projects generating significant climate benefits, for an overall investment of nearly 6 million euros (3.9 BCFA francs). Among these projects, 4 of them concern investments in energy control (purchase and installation of engines, ovens, cooling system, air conditioning, more efficient lighting), 5 in renewable energy (solar) and 3 projects are mixed, combining energy efficiency and renewable energy. In terms of impacts, these once-in-force investments are expected to result in annual energy savings of 2567 MWh, annual renewable energy production of 5283 MWh and 1 868 tons of CO2 avoided per year.

A high-efficiency dual-fuel oven in Togo

NEW SOTOLES, a steel company, has acquired a new high-efficiency dual-fuel furnace and a device to replace the use of diesel oil with LPG. The expected benefits of this investment are the reduction of dependence and pressure on the local electricity grid, the reduction of the plant’s environmental footprint and the improvement of SOTOTOLES’ competitiveness by controlling its energy bill. This operation was made possible through a loan from Orabank Togo, supported by AFD through the SUNREF program, in order to reduce its energy expenditure and improve its energy efficiency. The New SOTOLES produces corrugated sheet and galvanized plate, wire and tubes.
New SOTOTOLES has 8 production units and has been operational since 1992. It has a production capacity of 6,000 tons of steel bars per month. With a loan of 403,963 euros from Orabank Togo, the new SOTOTOLES made a green investment to acquire a high-performance oven and install a liquefied petroleum gas system. The annual energy savings are 4,516,000 kWh and 427,794 liters of diesel oil and 2,404 teqCO2 avoidance. Other energy efficiency and renewable energy measures are also under way.
The Hage holding Group, which holds the New SOTOTOLES, is now able to replicate this type of investment in other subsidiaries represented in the UEMOA countries.

Positive impact

Positive impact projects
The Orabank Group has set up an Environmental and Social Risk Management System (SYMRES) to ensure that the credit activity within it is carried out in strict compliance with the environmental and social ambitions of the group through measures to adapt to climate change. As a financial intermediary with economic operators, Orabank is an actor in disseminating good practices in the field of sustainable development. Orabank is committed to actions to finance green savings for access to renewable energy and clean water.
Integrating into a pro-environmental approach ensures a return on investment and a significant impact in the fight against climate change. Orabank funds energy-efficient and energy-efficient projects. In the industrial and hotel sector, the Orabank Group directs its customers to energy-efficient solutions that generate a 30% to 40% reduction in consumption. These savings from customers on their invoices can thus be reinvested in their development.
Oragroup has been commissioned by Diamond Cement Guinée (DCGN) to mobilize a global facility of USD 11 million to finance its project to acquire equipment for the operation of a limestone deposit and the construction of a clinker manufacturing plant in the Sugueta District/Kindia Administrative Region, Republic of Guinea. The limestone quarry will be operated by the company Sougueta Mining (SOMICO), a wholly owned subsidiary of DCGN. This company will be responsible for supplying raw materials (inputs) to the future clinker manufacturing plant of DCGN. The clinker plant will be built on an area of 4.7km² and will have an annual capacity of 500KT (1.5kT/day) in line with the production capacity of the DCGN cement mill unit (i.e. 500kT/year). The total cost of the project is estimated at USD 75 million distributed between the projects for the exploitation of the limestone deposits in Sougueta and for the installation and operation of a clinkerization unit.
The “4 star” Sancta Maria luxury hotel structure in Togo has received the support of the Agence Française de Développement under the SUNREF program through Orabank funding. The hotel had two objectives: to reduce its energy bill, which is very high due to the use of inefficient air conditioners, and to reduce its impact on the environment, in order to join the current dynamic of Togo, which seeks to give an increasing place to renewable energy and energy efficiency measures, in the fight against the effects of climate change. The annual energy savings represent 227.6 MWh and an amount of €42,689, a reduction of 37%, increasing its competitiveness.

SOTER/PAL Project - Solar power plant

Oragroup was requested by the Society of Renewable Energy Technologies (SOTER) as part of a project that aims to reduce considerably the monthly energy consumption bill of the Autonomous Port of Lomé (PAL), by implementing sustainable and environmentally friendly solutions through: (i) replacement of existing SHP headlamps and lamps with LED headlamps and lamps; (ii) replacement of roofs of storage to be used as support for solar panels; by sandwich panels of aluminum roofing; (iii) construction, operation, maintenance and provision of a 2 MW solar photovoltaic power plant.
The implementation of the said Project was backed by a performance contract that will link it to the SOTER. The total cost of the project is 2.3 billion CFA francs, financed from the available resources of the SUNREF line. The SOTER project for the Autonomous Port of Lomé (PAL) is composed of an energy efficiency measure and a renewable energy production measure. The technical details are presented as follows:
  • Replacing current lighting with efficient lighting. The 2,000 linear fluorescent tubes (TFLs) with electromagnetic ballast, the 336 external projectors, the 159 type 1 lamp posts and the 53 type 2 lamp posts will be replaced by Diode lamps and projectors.
  • Électroluminescente (DEL) pour réduire la puissance d’éclairage installée. Cette technologie est d’une part plus efficace, mais elle permet également de rallonger la durée de vie des lampes et la réduction des coûts d’entretien de l’éclairage. L’économie d’énergie engendrée par cette mesure est évaluée à 975 759 kWh par an. Soit un taux d’économie de 65%.
  • Electroluminescent (LED) to reduce installed lighting power. This technology is more efficient, but it also increases the life of lamps and reduces the cost of maintaining lighting. The energy savings resulting from this measure are estimated at 975,759 kWh per year. That is a saving rate of 65%.
  • The installation of a 2,423 MWc solar photovoltaic power plant without self-consumption storage contributes to the PAL’s autonomy in terms of electricity. The measure envisaged in the LIP will produce renewable electricity estimated at 3,567,000 kWh. This self-production represents 42% of the energy consumption of the reference year, equivalent to a reduction in emissions of 1,426,800 tCO2. The measures in the SOTER project will ultimately reduce the electricity bill and the operating costs of the PAL generators and its energy dependence on CEET (national electricity company).

Post-COVID funding

The management of the health crisis generates unforeseen costs for the management of the health of employees and economic impacts for public and private actors are expected, with the cost of health management being very substantial. A prioritization of the state’s actions will be carried out and the turnover of the companies will be affected. In Africa, in our countries of operation, there is no mechanism for partial unemployment and layoffs are immediate. The rate of defaults of SMEs and individuals on loans is expected to increase. Central banks will provide liquidity, but the effects will be long-term. 2020 will be a difficult year and the Orabank Group will need to support financing needs in priority sectors such as raw materials. The fight against poverty is essential. The health crisis is pushing for telework and reducing travel, reducing transportation and GHG emissions.
We are waiting for a general awareness of the investments of the health sector, to hold laboratories and to strengthen the sector. International organizations will be important allies in the provision of credit lines. For the future, it is important to consider the key issues – climate, biodiversity, water and urban development. The Orabank Group will make a direct contribution to the establishment of infrastructure networks.

Funding of agribusinesses in sub-Saharan Africa

The Finance In Motion Fund has partnered with Oragroup to finance sub-Saharan African agribusinesses with voluntary sustainability certifications through a EUR 23 million senior loan. This investment will promote sustainable and clean production and consumption practices among agribusinesses in the region.
Since June 2021, Oragroup has been in talks with an investment company specializing in agricultural financing in Africa as part of a fund-raising operation for an amount of EUR 25 million. The funds will be used to finance private companies involved in agricultural campaigns in the countries where the Orabank Ivory Coast subsidiary operates ( Ivory Coast, Burkina Faso, Guinea Bissau, Niger and Senegal). Oragroup received the financing agreement from the Investment Committee of the company on June 30, 2022. Steps are underway for the disbursement of funds. The financing of agricultural campaigns is a strong commitment of ORAGROUP in its desire to participate in the financing of the real economy while supporting sectors that have an impact on the development of economies and climate finance.