Côte d’Ivoire shopping mall owner issues first corporate green bond

CÔTE D’IVOIREEmergence Plaza, the promoter of the Cosmos Yopougon shopping center in Abidjan, succeeded in mobilizing the 10 billion FCFA (US$18.1m) sought as part of its bond loan launched in July.

The firm announces that it has closed the oversubscribed operation which is the first issue of private initiative green bonds from Frenchspeaking West and Central Africa.

“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.”

Proceeds from the 10bn bond will be used to refinance an existing local bank loan and to reinforce the financial and operational strength of the company.

The bond priced at 150 basis points lower than the 9% interest rate it was paying on an existing 8.4bn CFA franc bank loan.

“Much of Africa has been unable to benefit from the international clamour for green bonds to spur environmentally friendly commerce.”

Jean François Brou – CEO of SOAGA

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$300 billion of green bonds issued annually.

Of the total US$3.96 billion of green debt issued to date in Africa, just US$64 million 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, CEO of Société Ouest Africaine de Gestion d’Actifs (SOAGA) in Cotonou (Benin), which manages FCFA 80bn 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.”

HC Capital Properties, which developed, financed, and manages Cosmos Yopougon, 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,” Cheick Sanankoua, co-Founder and Managing Partner of HC Capital Properties, said.

“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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