Côte d'Ivoire is set to implement a debt-for-development swap with the support of the World Bank Group, aimed at improving its debt profile and channeling funds towards education. This initiative marks the first instance of such a swap being supported by the World Bank Group.
The operation will address approximately €400 million of Côte d'Ivoire's costly commercial debt maturing in the next five years. With assistance from the World Bank Group's guarantee platform, Côte d'Ivoire plans to repurchase this high-interest debt using a commercial loan with more favorable terms. This transaction is expected to free up around €330 million over five years, resulting in lifetime savings of at least €60 million in net present value terms, which will be directed towards critical educational investments.
Robert Beugré Mambé, Prime Minister of Côte d'Ivoire, stated: “Our government has implemented a robust fiscal consolidation reform agenda, resulting in sound debt management. We are proud to be the first country to operationalize the World Bank Debt for Development Swap framework... This pioneering approach reflects our commitment to exploring creative solutions that enhance the well-being of our citizens while contributing to the sustainability of our planet.”
The swap is facilitated by a policy-based guarantee, with half of a €500 million guarantee supporting this transaction and the remainder enabling Côte d'Ivoire to secure a Sustainability-Linked Loan (SLL) for diversifying its investor base.
Anna Bjerde, World Bank Managing Director of Operations, commented: “Too many countries face mounting debt service payments that are consuming resources they could spend on development priorities like education... Through a pioneering debt-for-development swap...the Government of Côte d’Ivoire is aiming to address these two challenges at once.”
This approach distinguishes itself from other recent swaps by avoiding expensive structures and utilizing existing country systems. It also aims to enhance an ongoing education program in Côte d'Ivoire through monitoring newly agreed results and outcomes.
This initiative forms part of broader financing under the Third Investment for Growth Development Policy Financing (DPF), which focuses on strengthening competition in key sectors and expanding access to health and education services.