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ANNUAL REPORT 2018

4ANNUAL REPORT 2018

MESSAGE FROM THE PRESIDENT

The West African Development Bank (BOAD)

celebrated its 45th anniversary in 2018. To

mark the occasion, it held a forum in Lomé

on 14 and 15 November on the theme "Solar

energy in the WAEMU economies: overview of the

situation, challenges and policies". The event was

very revealing; the lessons learned and recom-

mendations made will be put to good use

through the policies and actions that the Bank's

member countries, with support from community

institutions, agencies and partners, will be keen

to promote.

The opening ceremony of the forum was chaired

by the current President of the WAMU Confe-

rence of Heads of State and Government, His Ex-

cellency Mr. Alassane Ouattara, President of the

Republic of Côte d'Ivoire. It was also attended by

His Excellency Mr. Komi Sélom Klassou, Prime Mi-

nister of Togo, representing his country's Head of

State. I would like, in this regard, to reiterate my

sincere gratitude to the Conference of Heads of

State and Government for the strong and rene-

wed support for BOAD on this occasion.

The Bank's activities in 2018 took place in a

conducive economic and social environment. The

economic dynamism that began in 2012 in the

WAEMU region continued during the year, with a

growth rate of 6.6 percent. This performance was

driven both by the service sector (banking, trade)

and by the implementation of national or regional

development programmes, particularly in agricul-

tural investment and the modernization of key

infrastructure.

5ANNUAL REPORT 2018

MESSAGE FROM THE PRESIDENT

It is against this background that the Bank conti-

nued to support the economies by providing finan-

cing totaling XOF426.8 billion. The loans and other

assistance thus granted will foster the implemen-

tation of investment projects in various sectors, in-

cluding transport facilities, agriculture, energy,

industry and promotion of SMEs/SMIs. Financing

for the year brought the Bank's total net commit-

ments to XOF5,311 billion as of 31 December

2018, covering a total of 1,149 operations, with a

cumulative disbursement rate of 62.3%.

In terms of resource mobilization, the investment

grade ratings, confirmed by Moody's and Fitch, at

the end of the 2018 annual review, gives the Bank

access, under good conditions, to the international

financial market. Nevertheless, the Bank continues

to maintain fruitful cooperative relationships with

its development partners. In this regard, two bila-

teral agreements were been signed, worth a total

of US$45 million (XOF 25.4 billion). The Bank also

continued to mobilize grants from international en-

vironmental funds (GEF, AF and GCF), which were

used to develop and finance low-carbon and cli-

mate change projects.

In terms of internal governance and risk manage-

ment, the year was marked by the adoption of IFRS

9 and a new benchmarking of the internal rating

models for counterparties. Work is also underway

on developing the "Risk Appetite Framework",

the "economic capital" and a modern financial

management system.

Finally, I would like to reiterate my deepest gratitude

to the high authorities of WAEMU for their conti-

nued support to BOAD. I would also like to thank

our partners very much for their commitment and

support. Finally, I would like to congratulate the

Bank's staff on the results achieved and encourage

them to continue their relentless efforts in the ser-

vice of the development of the member countries.

CHRISTIAN ADOVELANDEPresident, BOAD

7ANNUAL REPORT 2018

TABLE OF CONTENTS

MESSAGE FROM THE PRESIDENT ...................................................................................................................4LIST OF ACRONYMS AND ABBREVIATIONS ....................................................................................................8SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 ....................................................................................9HIGHLIGHTS OF 2018 ..................................................................................................................................10

1. ECONOMIC AND SOCIAL ENVIRONMENT .....................................................................................16 1. INTERNATIONAL ECONOMIC ENVIRONMENT ...............................................................................18 2. ECONOMIC ENVIRONMENT IN THE WAEMU REGION.................................................................20 2.1. Economic situation..........................................................................................................................21

2.2. Human development ......................................................................................................................22

2. ACHIEVEMENTS IN 2018..........................................................................................................................24 1. GENERAL PICTURE ..................................................................................................................26

2. ACHIEVEMENTS PER STRATEGIC AREA..................................................................................30 2.1. Speeding up regional Integration through sustained financing of infrastructure...............................31

A. Development and interconnection of transport infrastructure .....................................................31

B. Implementation of regional strategies and programmes ..............................................................31

2.2. Support for inclusive growth, food security and sustainable development .......................................33

A. Development of basic infrastructure ...........................................................................................33

B. Sustainable development ............................................................................................................35

2.3. Support for businesses and governments, developping financial engineering and services ...............37

A. Promoting Public-Private Partnership (PPP) ..................................................................................37

B. Support for the development of industries and the emergence of regional companies.....................39

2.4. Deepening the resource mobilization process ..................................................................................41

A. Agreements signed in 2018........................................................................................................41

B. Loans approved by the Board of Directors ...................................................................................41

C. Resource mobilization on capital markets ...................................................................................41

D. Subsidies ....................................................................................................................................41

E. Cooperation and promotion of partnerships................................................................................41

2.5. Aligning management and governance...........................................................................................42

A. Legal certainty of operations.......................................................................................................42

B. Marketing and communication ...................................................................................................42

C. Staff performance ......................................................................................................................43

D. Asset management and safety of persons and property ..............................................................44

E. Monitoring and evaluation of operations and knowledge management ......................................44

F. Governance, control systems and risk management .....................................................................46

G. Upgrading the IT system.............................................................................................................47

H. Financial management................................................................................................................48

THEME FOR THE YEAR: SOLAR ENERGY IN THE WAEMU ECONOMIES: OVERVIEW OF THE SITUATION, CHALLENGES AND PROSPECTS . . .50

LIST OF ANNEXES........................................................................................................................................................72

8ANNUAL REPORT 2018

LIST OF ACRONYMS AND ABREVIATIONS

AFD : Agence Française deDéveloppement (FrenchDevelopment Agency)

AIBD : Aéroport International BlaiseDiagne

AfDB : African Development Bank

BADEA : Arab Bank for EconomicDevelopment in Africa

BCEAO : Central Bank of West AfricanStates

EIB : European Investment Bank

IDB : Islamic Development Bank

EBID : ECOWAS Bank for Investmentand Development

BOAD : West African Development Bank

BTP : Construction, Public works

UNFCCC : United Nations FrameworkConvention on Climate Change

ECOWAS : Economic Community of WestAfrican States

COP : Conference of Parties

CPCS : Canadian Pacific ConsultingServices

RCC : Regional Collaboration Centre

CFAF/XOF : Franc de la CommunautéFinancière Africaine (Franc of theAfrican Financial Community)

FDC : Development and CohesionFund

FDE : Energy Development Fund

EDF : European Development Fund

GEF : Global Environment Facility

IMF : International Monetary Fund

IAS/IFRS : International AccountingStandards / InternationalFinancial Reporting Standard

ICOR : Incremental Capital OutputRatio

HDI : Human Development Index

IPP : Independent Power Producer

IRED : Regional Initiative forSustainable Energy

IRENA : International Renewable EnergyAgency

KfW : Kreditanstalt für Wiederaufbau(German State-owneddevelopment bank)XOF’B : Billions of XOF

OECD : Organization for Economic Co-operation and Development

OMVS : Organization for theDevelopment of the SenegalRiver

PACITR : Community Action Programmefor Road Infrastructure andTransport

CDP : ECOWAS CommunityDevelopment Programme

REP : Regional Economic Programme

RIP : Regional Indicative Programme

LDC : Least Developed Countries

SME-SMI : Small and M edium Enterprises -Small and Medium Industries

PPIAF : Public-Private InfrastructureAdvisory Facility

PPP : Private-Public Partnership

TFP : Technical and financial partner

SAP : Systems, Applications andProducts for data processing

EU : European Union

WAEMU : West African Economic andMonetary Union

URDPPP : Regional Public-privatePartnership Project DevelopmentUnit

WAPP : West African Power Pool

9ANNUAL REPORT 2018

SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018

Date of establishment 14 november 1973 Commencement of operations in 1976 Shareholders - WAEMU member countries: Benin, Burkina, Côte d’Ivoire, Guinea

Bissau, Mali, Niger, Senegal, Togo - BCEAO (Central bank) - Non-regional shareholders: Germany, AfDB, EIB, Belgium, France,

India, People’s Republic of China, Kingdom of Morocco Mission Promoting the balanced development of member countries and

contributing towards the economic integration of West Africa Vision BOAD: A solid development bank for the economic integration and

transformation of West Africa

Authorized capital as at 31 December 2018 XOF1,155 billion Subscribed capital as at 31/12/2018 XOF1,103.6 billion Total balance sheet as at 31/12/2018 XOF2,568.2 billion Operational staff of the Bank as at 31/12/2018 295 employees

Loans granted in 2018 43 operations involving a total of XOF426.8 billion in theform of:

Direct loans : XOF393.3 billion, representing 92.1% Indirect loans : XOF20.0 billion, representing 4.7% Equity investment : XOF13.5 billion, representing 3.2%

Breakdown of loans per sector:

Non-commercial sector : XOF246.7 billion, representing 57.8% Public commercial sector : XOF70.6 billion, representing 16.5% Private sector : XOF109.5 billion, representing 25.7%

Breakdown of loans per category

National projects : XOF388.1 billion, representing 90.9% Regional projects : XOF38.7 billion, representing 9.1%

Cumulative approvals, 1976 - 2018 XOF5, 311 billion (€ 8.1 billion) covering 1,149 operations.

10ANNUAL REPORT 2018

HIGHLIGHTS OF THE YEAR 2018

2 January Adoption of IFRS 9 and calibration of internalrating models

27 March and 4 April Maintaining the Bank's investmentgrade ratings

10-11 April Holding of a workshop to launch thepreparation of the regional project to supportsustainable waste management and reduceemissions of persistent organic pollutants(POPs) and mercury in WAEMU countries.

27 June Approval of the agro-food processing projectin Togo (Kara Region)

9 January Holding of a regional workshop on the promotion ofclimate-smart agriculture

7 June Participation in an EU-organizedhigh-level conference in Brussels onjob creation, growth andcompetitiveness in West Africa

27 June 109th Board Meeting

5-10 July Participation in the 7th

meeting of the HighLevel Committee onFood and NutritionalSecurity

27 August - 2 September Launch of 2 BOAD competitions: the first on"Footprints of BOAD", and the second for start-ups operating in renewable energies in theWAEMU region

18-19 SeptemberWorkshop on the restitution anddissemination of the study oncapacity building for PPPdevelopment in WAEMU

21 March 108th Board Meeting



20 November Validation workshop of theevaluation report of the portfolioof non-market projects financed byBOAD in Togo from 2000 to 2015

19 September 110th Board Meeting

20 SeptemberOfficial launching of the World Bank/WAEMU Projectto promote affordable housing finance in WAEMU

2-3 October BOAD Open Days in Dakar(Senegal)

13 November Inauguration of BOAD residential area

14-15 November Commemoration of BOAD's 45th anniversaryand Forum on solar energy in WAEMUeconomies

5-6 December Maintenance of ISO 27001certification of the Informa-tion Security ManagementSystem

17 December Participation in the meeting of the SenegalConsultative Group on the financing ofPhase II of the Emerging Senegal Plan (PSE)

19 December 111th Board Meeting



2 January

Adoption of IFRS 9 and calibration of internalrating models

In order to comply with international standards,the Bank adopted the IFRS 9 accounting standardstarting in January 2018. This approach prompteda review of its method for depreciating financialinstruments. The impairment of these instrumentsis now based on the probabilities of default asso-ciated with each rated counterparty.

The Bank also calibrated its internal rating models,changing from three to six rating models and es-tablishing an internal masterscale based on that ofthe Global Emerging Markets Consortium (GEMS).This is a repository shared by several multilateral orEuropean development banks.

9 January

Holding of a regional workshop on thepromotion of climate-smart agriculture

The Bank held a regional workshop at its headquar-ters in Lomé, Togo, to validate the full proposal forthe project to promote climate-smart agriculture inWest Africa.

This project was the outcome of collaboration bet-ween the Bank and other subregional institutions orbodies such as the ECOWAS Commission and theWAEMU Commission.

The programme will be deployed in five countries(Benin, Burkina Faso, Ghana, Niger, Togo) and will fos-ter inclusive growth, food security and the mobiliza-tion of concessional or grant resources from thefinancial mechanisms under the United Nations Fra-mework Convention on Climate Change (UNFCCC).

27 June 2018

108th Board Meeting

The Board of Directors of the West African Develop-ment Bank (BOAD) met at Dakar in Senegal and ap-proved new operations totaling XOF190 billion andan equity investment of XOF5 billion.

27 March and 4 April

Maintaining the Bank's investment grade ratings

The Bank hosted the annual review missions of twointernational rating agencies, Moody's and Fitch. Atthe end of their review, the two agencies confirmedthe ratings assigned since 2015, namely Baa1 stable(for Moody's) and BBB stable (for Fitch).

10 -11 April

Holding of a workshop to launch the prepara-tion of the regional project to support sustai-nable waste management and reduceemissions of persistent organic pollutants(POPs) and mercury in WAEMU countries.

The workshop was held at the Bank headquartersin Lomé to launch the preparation of the project.This was part of the procedures for project formulationand submission to the Global Environment Facility. Theproject is aimed at supporting the promotion of a cir-cular economy in the area of solid waste management(biomedical, electrical and electronic waste, etc.) andthe reduction of greenhouse gas emissions from themisuse of such waste in the target countries.

7 June

Participation in an EU-organized high-levelconference in Brussels on job creation, growthand competitiveness in West Africa

The President of BOAD participated in the high-levelconference on job creation, growth and competiti-veness in West Africa on the sidelines of the 5th EU-West Africa RIP Strategic Steering Committeemeeting, held in Brussels. Organized jointly by theEuropean Union Commission and the ECOWAS andWAEMU Commissions, this conference brought to-gether many representatives of the private sector,development banks, as well as government autho-rities from West African countries. The event washeld to discuss ways to improve business climate insupport of the private sector, with a view to foste-ring the emergence of new business and employ-ment opportunities for young people.



27 June

109th Board Meeting

The Board of Directors of the West African Deve-lopment Bank (BOAD) held its 109th ordinary mee-ting at its headquarters in Lomé (Togo). At thismeeting, the Board approved eleven (11) new ope-rations including seven (7) medium and long-termloans totaling XOF90.8 billion, a refinancing facilityinvolving XOF10 billion, a short-term loan in anamount of XOF5 billion and equity investments involving XOF6 billion.

27 June

Approval of the agro-food processing projectin Togo (Kara Region)

As part of a program to develop 10 agropoles in Togo,the Bank co-financed the implementation of the firstphase of the agro-food processing project in Togo.

The project is aimed at creating, within a limited anddeveloped area, as many favorable economic, legaland logistical conditions as possible for private inves-tors to take an interest in and establish themselves inthe agricultural sector.

It involves the development of a 46 ha agropark, theconstruction of dams, the development of plannedfarming areas, lowlands, tracks, electrification of vil-lages and the establishment of agricultural processingcentres, among other things.

5-10 July

Participation in the 7th meeting of the High LevelCommittee on Food and Nutritional Security

Chaired by the Head of State of Niger, H.E. Mr. Is-soufou Mahamadou, the High-Level Committee onFood and Nutrition Security held its 7th meeting onJuly 10 in Niamey. The main objective of the mee-ting was to renew dialogue on appropriate ways topromote food security and sustainable processingof agriculture in the WAEMU region.

27 August - 2 September

Launch of 2 BOAD competitions: the first on"Footprints of BOAD", and the second for start-ups operating in renewable energies in theWAEMU region

BOAD organized both competitions as part of thecommemoration of its 45th anniversary. The first re-sulted in the selection of photos of BOAD-fundedprojects in its member countries. The second involvedthe innovative initiatives and projects promoted bystart-ups in renewable energy, particularly solarenergy. This second competition aimed to promotethe skills of local developers and promote green jobs. The top prize awarded to a Malian, for a photo ofthe Segou interchange in Mali.

Two prizes were awarded for the start-up competi-tion, given the respective strengths of the two bestentries: the first to a Togolese, promoter of a KYA-SoP electro-solar power plant project, and the secondto a Senegalese for a “smart solar water pump pro-ject, with a digital training and marketing platform”.

The two award-winning start-ups will also receivesupport from a Danish equipment manufacturer overa period of six months, as well as a week training atthe Entrepreneurship Centre of the Danish TechnicalUniversity.

18-19 September

Workshop on the restitution and disseminationof the study on capacity building for PPPdevelopment in WAEMU

The Regional Public-Private Partnership Project De-velopment Unit (URDPPP), in partnership with theWAEMU Commission and PPIAF, held a workshopon 18 and 19 September at BOAD headquarters inLomé to present and disseminate the World Bank-funded study on this topic.

The workshop was attended by representatives ofthe various PPP Units or Directorates in the WAEMUmember countries, other representatives of membercountries, the World Bank, PPIAF, AfDB, EBID, AFDand OMVS.



The study was to: (i) strengthen the regional insti-tutional framework for the implementation of PPPsin the WAEMU region, (ii) support the harmoniza-tion of PPP strategies within the WAEMU region, (iii)and facilitate greater frequency and implementationof PPP projects at the regional or even national level.

19 September

110th Board Meeting

The Board of Directors of the West African Deve-lopment Bank (BOAD) held its 110th ordinary mee-ting in Abidjan (Côte d’Ivoire). At this meeting,Board members approved nine (9) new operationsincluding six (6) medium and long-term loan pro-posals totaling XOF74 billion, two (2) short-termloans amounting to XOF16 billion and one equityinvestment of XOF2.5 billion.

20 September

Official launching of the World Bank/WAEMUProject to promote affordable housing financein WAEMU

The President of the WAMU Council of Ministers,Mr. R. Wadagni, Minister of Economy and Financeof Benin, officially launched the project. The event,which was held in Abidjan, was also attended byWAMU Ministers of Finance or Housing, Heads ofWAEMU institutions, and representatives of TFPs,including the World Bank.

The project is intended to broaden access to long-term housing finance in the WAEMU region. Theproject implementation will involve the granting ofloans and provision of technical assistance (seeBOAD 2017 Annual Report).

2-3 October

BOAD Open Days in Dakar (Senegal)

The Bank organized Open Days in Dakar, Senegal.

The purpose of the event was to raise awareness ofthe Bank's products and services, promote its image,and strengthen the close relationship with the targetaudience in that Member country.

The meeting featured two main sessions: (i) an infor-mation workshop for journalists and local authoritieson BAOD's strategy and commitment to climate fi-nance; and (ii) an open forum with private sectoroperators.

The event brought together more than 100 partici-pants representing public sector, national and inter-national financial institutions, public and privateorganizations, companies and media professionals.

13 November

Inauguration of BOAD residential area

The President of BOAD and the Togolese Ministerof Economy and Finance inaugurated the BOADHousing Project in Lomé, which was built by theBank for its staff pursuant to a decision by its Boardof Directors.

The launch of this major housing project is part ofthe Bank’s policy of incentivizing of encouraging itsstaff, as well as part of its social actions aimed at pro-viding a safe living environment for its employees. Itis also part of a move to support the host country’snational housing and urban development policy.

The project located at Baguida, 14 km from the citycentre, sits on a 7.62 ha site owned by the Bank. Theproject has: i) 134 fully secured and connected villas,



ii) 3.50 km of roads and various networks (asphaltroads, covered drains, electricity and public lighting,drinking water supply, connection to optical fibre), iv)sports and social infrastructure (leisure centre) on a8,000 m² site provided by the Togolese Government,and iv) 1.26 km of adjacent asphalted roads.

14-15 November

Commemoration of BOAD's 45th anniversaryand Forum on solar energy in WAEMUeconomies

The opening ceremony of this event was attended byHis Excellency Mr. Alassane Ouattara, President of theRepublic of Côte d'Ivoire, current President of theWAEMU Conference of Heads of State and Govern-ment, as well as by Mr. Komi Sélom Klassou, Prime Minister of Togo, representing the Togolese President.

The forum featured three panel discussions on: (i) boos-ting and developing the solar economy in the WAEMUregion, (ii) climate finance and resource mobilization,and (iii) cross-references based on experience.

Conclusions from this forum are reflected in the thematic section of this annual report.

20 November

Validation workshop of the evaluation reportof the portfolio of non-market projectsfinanced by BOAD in Togo from 2000 to 2015

The workshop, attended by some forty (40) partici-pants, was held at the Bank headquarters to stimu-late discussion on the main conclusions andrecommendations of the evaluation report. It alsoprovided a platform for participants to share theirexperiences on the issues raised by the evaluation,and to ultimately agree on the conditions for validating the report.

At the end of the discussions, the participants com-mended the initiative of such an evaluation and va-lidated the report submitted.

5-6 December

Maintenance of ISO 27001 certification of theInformation Security Management System

The Bank successfully underwent the second super-vision audit of its information security managementsystem, conducted by the AFNOR Certification Body.This enabled it to maintain its ISO 27001 Version2013 Certification.

17 December

Participation in the meeting of the SenegalConsultative Group on the financing of Phase IIof the Emerging Senegal Plan (PSE)

The Bank participated in the meeting of the Advi-sory Group for the financing of Phase II of the ESPon 17 December in Paris. The event, which was heldat the World Bank Regional Office, was organizedby the Government of Senegal.

The meeting, which brought together Senegal's de-velopment partners, as well as other public and pri-vate investors, to finance the second phase of theprogramme, was a great success.

19 December

111th Board Meeting

During this meeting held in Dakar (Senegal), 3 pro-jects involving XOF15.21 billion were approved, the-reby bringing BOAD’s cumulative commitments (alloperations combined) to XOF5,308.71 billion, sincethe commencement of its operational activities.

ECONOMIC AND SOCIAL ENVIRONMENT

1

Farmer at Molodo, Mali


World economic growthwas estimated at 3.7% in 2018

Growth in the WAEMUregion is expected toreach 6.6% in 2018

The African Union,through its agenda 2063,hopes for “a prosperousAfrica based on inclusivegrowth and sustainabledevelopment”.



INTERNATIONALECONOMIC ENVIRONMENT

Tour Postel in Abidjan,Côte d'Ivoire

1Growth in sub-Saharan Africa was expected to reach 2.9% in 2018, same as in 2017,

partly driven by improved growth prospects in Nigeria following a recovery in oil production and prices.



Global economic growth was estimated at 3.7% in2018, down from 3.8% in 2017. This slight decline re-flected a slowdown in activity, particularly in Germany,as a result of the introduction of new emission stan-dards in the automobile industry, and in Italy, wheresovereign and financial risks weighed heavily on do-mestic demand. Tariff increases in the United Statesand China in 2018 also had negative impacts on theglobal economy.

Growth in advanced countries reached 2.3% in 2018compared with 2.4% in 2017, in line with the declinein activity in the euro zone, which was 2.4% in 2017and 1.8% in 2018. The United States economy, on theother hand, grew by 2.9% in 2018 compared to 2.2%in 2017.

Emerging and developing countries also recorded aslight decline in their growth, which stood at 4.6% in2018 compared to 4.7% in 2017, in spite of the ac-celerated growth recorded in India (7.3% in 2018compared to 6.7% in 2017). China's growth slowedfrom 6.9% in 2017 to 6.6% in 2018, mainly due totighter financial sector regulations, weaker externaldemand and trade tensions with the United States.

Growth in sub-Saharan Africa was estimated at 2.9%in 2018, as in 2017. This situation was partly due toan improvement in Nigeria's growth prospects (1.9%in 2018 compared to 0.8% in 2017), under the posi-tive influence of a recovery in oil production andprices. In South Africa, however, growth was estima-ted at 0.8% in 2018 compared to 1.3% in 2017, inline with the climate of uncertainty in the run-up tothe 2019 general elections.

0

1

2

3

4

5

2018201720162015

Sub-Saharan AfricaEmerging & dev. countriesEuro countriesAdvanced countriesWorld

Graph 1Evolution of economic activity between 2015 and 2018

Sources: WEO (IMF, January 2019)



ECONOMIC ENVIRONMENT IN WAEMU

2"Since 2012, the WAEMU region has achieved significant economic performance,

in a context of controlled price trends, with an average annual growth rate of 6.3%,significantly higher than the rest of sub-Saharan Africa”.

Interchange at Markalajunction in Mali.



Since 2012, economies in the WAEMU region haveperformed siginificantly, with an average annualgrowth rate of 6.3%, significantly higher than the rest

of sub-Saharan Africa, which stands at 3.3%. Theseperformances are part of a context of price control(see graph below).

GDP growth rate in volume

2018201720162015201420132012

Annual inflation rate(shift in average indexes in %)

0

1

2

3

4

5

6

7

8

-0.5

0

0.5

1

1.5

2

2.5

3

3.5

Graph 2

Evolution of growth and inflation and the WAEMU region

Source: WAEMU Commission, Multilateral Surveillance Report, Dec. 2018

2.1. ECONOMIC SITUATION

Growth in the area in 2018 was expected to reach6.6%, as it was in 2017. All Member States were expec-ted to record a higher growth rate, driven by improvedperformance in all sectors.

The strong performance recorded by the primary sectorwas driven by favorable climatic conditions and conti-nued investment in national agricultural developmentprogrammes in the Member Countries. The secondarysector was boosted by strong performance in construc-tion and public Works, coupled with continuedconstruction of basic infrastructure and improved resultsin the extractive industries. Performance in the servicesector was driven largely by trade, transport and telecommunications.

Growth rates by country in 2018 are as follows: Benin(6.8%), Burkina (6.7%), Côte d'Ivoire (7.7%), Guinea-Bissau (3.8%), Mali (5.1%), Niger (5.2%), Senegal(6.8%) and Togo (4.8%).

Prices increased moderately in 2018, reflecting changesin international food prices, increases in the price ofcrude oil and the prospects for food production in theregion.

The growth outlook for 2019 is 7.0%, slightly above the6.6% recorded in 2018.



Source: UNDP Human Development Report 2018.

0.0 0.1 0.2 0.3 0.4 0.5 0.6

Benin

Senegal

Togo

Côte d'Ivoire

Guinea Bissau

Mali

Burkina Faso

Niger 0.354

MPI

0.423

0,427

0.455

0.492

0,503

0.515

0.505

HDI

Graph 3

HDI and Multidimensional poverty index2 (MPI) in WAEMU

In spite of the sustained growth recorded in the lastseven years, averaging 6.3%, the WAEMU region, likemany other African countries, is faced with persistentpoverty, which hinders the sustainable developmentof the continent's economy.

The UNDP Human Development Report 2018 indicatesthat among the main factors explaining the above-mentioned stagnation are the lack of decent jobs, par-ticularly for young people, gender inequalities,

population growth, limited access to basic social ser-vices (education, health, drinking water and sanitation,etc.) and means of production. Since 1990, membercountries have been ranked among countries with lowhuman development; in 2017, with a human develop-ment index1 (HDI) ranging from 0.354 in Niger to0.515 in Benin (see graph below), below the sub-Sa-haran average (0.537). Countries with a higher HDIalso have lower levels of multidimensional poverty, asshown in Figure 3 (Benin, Senegal and Togo).

2.2. HUMAN DEVELOPMENT

Conscious of the challenges facing African countries,the African Union, through its Agenda 2063 adaptedin 2015, hopes for “a Prosperous Africa based on Inclusive Growth and Sustainable Development”.

Thus, in 2018, it produced, in collaboration with theOECD, a report on the dynamics of development inAfrica, with a view to stimulating policy dialogue anddeepening reflection.

1 The Human Development Index is a composite index, which takes into account three fundamental dimensions of human development: life expectancy at birth; access to education; and gross national income per capital.

2 The Global Multidimensional Poverty Index (MPI) identifies multiple deprivations at the household level in health, education and living standards.



The report on the theme "Growth, employment andinequality" highlights the persistent inequalities and theshortage of quality jobs on the continent, despite solidgrowth. This report also proposes new developmentstrategies.

The report indicates that growth in the WAEMU regionis supported by private consumption and public invest-ment. However, private consumption remains heavilydependent on imports as the local supply of goodsand services is very limited, without industrializationand processing.

The labor market is dominated by the informal sector,characterized by largely unstable and low-productivityjobs. The agricultural sector remains the largest em-ployer in the Union, followed by the service sector.

A vast majority of the youth are unemployed. This phe-nomenon is explained not only by structural and socio-political factors,3 but also by a mismatch between skillsand market needs, as well as by a low level of training.

In terms of inequality, the average gap between theHDI (0.46) and the HDI (0.30) reflects a loss in humandevelopment caused by inequality. However, incomeinequalities have declined slightly in the WAEMU area,with the GINI index4 declining on average from 0.43over the period 1990-1995 to 0.41 between 2010 and2015. Gender inequalities persist, particularly in accessto economic and social opportunities, notwithstandingpolicies implemented to address them.

As a means of ensuring sustained, sustainable and in-clusive growth in the WAEMU region, the following de-velopment strategies are proposed for implementationin three main areas :

• Developing rural-urban links to create jobs bystimulating local economies through:

i) The formulation and implementation of industrialstrategies that promote activities that link ruralagricultural producers, industrial producers andurban consumers, particularly as part of agro-foodvalue chains,

ii) Strengthening infrastructure and national andtransboundary corridors,

iii) Securing land tenure and equitable access to landto reduce the risk of conflict and slow the ruraldrift of young people,

iv) Good policies for redistributing wealth.

• Upgrading local supply capacity in consumerproducts and services through:

i) A grouping of companies,

ii) Microfinance, training and innovation support pro-grammes to help microenterprises improve theirproductivity and income. Education policies shouldsupport investment in human capital and integrateentrepreneurial training into formal education, inorder to foster entrepreneurship among youngpeople. The local economy could also improve, bychanging the structure and destination of exports(dominated by raw materials), as well as imports(dominated by final consumption goods).

• Improving institutional capacity, regulatoryframework for business and taxation to attractinvestment: Governments should continue tocreate a conducive environment for business, in-vestment and capital accumulation (fight againstcorruption, fraud, tax evasion and embezzlementof public funds).

3 These include factors such as: obstacles to the creation and development of businesses, distortions in the labour market, political instability, etc.4 Index that makes it possible to assess inequalities in the distribution of a country's wealth. It is between zero (situation of perfect equality) and one (situation of perfect inequality).

ACHIEVEMENTSIN 2018

2

Pharmivoire production unit (Côte d'Ivoire)


XOF426.8 billion infinancing was providedby the Bank in 2018.

XOF252.3 billion wasinvested in strengtheningbasic infrastructure.

30% of cumulativecommitments at the endof 2018 were made toregional economicintegration projects


ACHIEVEMENTS IN 2018

GENERAL PICTURE1

In 2018, the Bank provided financing totaling XOF426.8 billion, including XOF380 billion in the form of medium and long-term loans

and XOF31.0 billion in short-term financing.

Womey Bridge construction site in Benin



Approvals Number of % (XOF’bln) operations Approvals

NON-COMMERCIAL SECTOR (a) 246.7 22 57.8

COMMERCIAL SECTOR (b = i + ii) 180.1 21 42.2

Public commercial (i) 70.6 8 16.5

Private (ii) 109.5 13 25.7

TOTAL (a+b) 426.8 43 100

Direct financing totaling XOF393.3 billion (92% of ap-proved loans) were provided to support new invest-ment projects, particularly in transport, electrification,safe drinking water, sanitation, food security, industryand services.

The refinancing facilities stand at XOF20 billion, or4.7% of the year's financing and went into streng-thening the productive capacities of SMEs throughnational financial institutions.

Table 1

APPROVAL5 (LONG, MEDIUM AND SHORT TERM) PER SECTOR IN 2018

5 Including equity investment

Financing by sector for the year was as follows:



2015 2016 2017 2018201420132012201120102009

Graph 4

BREAKDOWN OF APPROVALS PER TYPEOF FINANCING IN 2018 (XOF’bln)

Graph 5

EVOLUTION OF BOAD'S CUMULATIVE NET COMMITMENTS (XOF’bln)

5%Refinancing facilitiesXOF20 Bln

3%Equity investmentsXOF13.5 Bln

92%Direct loansXOF393.3 Bln

1,483.3

1,848.4

2,223.6

2,712

3,292.3

3,602.3

3,878.5

4,409.4

4,914.8

5,310.9

Four equity investments, involving a total of XOF13.5billion, were made in investment funds operating in theregion, namely CAURIS IV, AFIG II, ECP Africa IV andADIWALE I. The Bank also acquired a stake in the capi-tal of Banque Régionale des Marchés (BRM) HoldingSA, which is being created for XOF326.4 million,through the partial transfer of shares held in the capitalof BRM.

The new loans granted brought the Bank's total netcommitments to XOF5,311 billion as at 31 December2018, involving 1,149 operations.

Cumulative financing for regional economic integrationprojects stood at XOF1,601.8 billion, representing30.2% of commitments at the end of December 2018.

As regards financing arrangements, requests forfundraising resulted in the mobilization of XOF68 billion for the principals.

Technical assistance for project preparation involveda total amount of XOF2.3 billion for feasibility studies. Thisbrought the total amount of this category of assistanceto XOF31.2 billion at the end of December 2018.



The studies in question were inten-ded to prepare the projects for pos-sible financing by the Bank. Thesemade is possible to bring projects tomaturity, particularly in the fields ofcraft entrepreneurship, hydro-agri-cultural development, river trans-port, water resource protection andenhancement.

Between 2013 and 2017, the Bankgranted WAEMU member countriescash advances totaling XOF11.2 bil-lion to finance 41 operational stu-dies in various sectors.

The status of the studies referred toabove is as follows: i) eight (8) stu-dies have been completed, with atotal amount of XOF2.3 billion; ii)seventeen (17) studies are ongoing,with a total amount of XOF3.6 bil-lion; iii) fourteen (14) studies, witha total amount of XOF4.8 billion,are at the consultants prequalifica-tion stage; and iv) while two (2) stu-dies, involving a total amount ofXOF440 million are being with-drawn following funding by ano-ther financier.

The completed studies have resul-ted in the preparation of: (i) seven(7) projects that are being financedby BOAD, for which previous cashadvances have been or are being in-tegrated into the correspondingproject loans; (ii) one (1) project fi-nanced by other funders and forwhich the cash advance grantedwill be repaid by the Borrower, inaccordance with the agreement.

Out of a total amount of XOF11.2billion granted to member countriesbetween 2013 and 2017 to financeoperational studies, a total amountof XOF2.3 billion has been recovered

to date, under studies completedand integrated into loans.

The studies financed by the Bank in2018 bring to XOF13.5 billion thetotal amount allocated for the fi-nancing of studies over the last six(6) years*.

In terms of lessons learned, theBank's monitoring and evaluationactivities reveal that the conduct ofquality studies at the beginning ofthe project cycle reduces difficultiesin project implementation and pro-motes the sustainability of infra-structure.

The Bank's continued financing ofstudies to strengthen the quality ofimplementation and sustainabilityof infrastructure is therefore anecessity. In December 2018, theWAMU Council of Ministersrenewed the six-year endowment in order to support the Bank'sactivities in this area.

* The allocation of funds for this category of activities isbased on allocation chains renewed every 6 years.

INSERT 1

Between 2013 and 2018,

XOF13.5 billionwere spent onfinancing publicproject studies.

In 2018, in response to requests for cash advance for studies, the Bank financed seven public project appraisals,with a total amount of XOF2.3 billion. This type of financing was granted to the following member countries ata rate of 1.5%: Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger and Senegal.

As at 31 December 2018, annual disbursements stoodat XOF292.5 billion, compared to XOF309.6 billion in 2017.

At the same date, the total cumulative disbursementsamounted to XOF3,308.0 billion, corresponding to acumulative disbursement rate of 62.3% (cumulativedisbursements/cumulative commitments).

Financing of project studies



ACHIEVEMENTS PERSTRATEGIC AREA2

The Bank's achievements in 2018, based on its areas of intervention in the 2015-2019 strategic plan, are presented below.

Bella-Gaia roadin Niger



A. DEVELOPMENT AND INTERCONNECTIVITY OF TRANSPORT INFRASTRUCTURE

In the area of transport infrastructure, the Bank gran-ted loans totaling XOF38.7 billion for the implemen-tation of three integrative road projects in Mali, Nigerand Burkina Faso.

• Financing in the road transport sub-sector to-taling XOF35 billion has been granted, in Mali,for the construction of an interchange and anoverpass, as well as for the development of roadsin the city of Sikasso, and in Niger, for the asphal-ting of the Zinder road, which forms a link in thetrans-Saharan road linking Algiers to Lagos.

These funds will facilitate the construction of anoverall stretch of 18.4 km, contributing to pro-gress in regional integration, particularly by (i) improving traffic on Community roads inclu-ded in the PACITR, a component of the PER 2,and (ii) developing intra-regional trade.

• In the port sub-sector, a contribution of XOF3.7billion was made for the extension of the BoboDioulasso dry dock in Burkina Faso. This projectwill support the growth of trade flows betweenthe landlocked countries and the seaports.

B. IMPLEMENTATION OF REGIONAL STRATEGIES ANDPROGRAMMES

In collaboration with the other Community institutionsor bodies of the Union, the Bank contributes to the ini-tiation and subsequent monitoring of various pro-grammes selected at Community level. Theseprogrammes include: PER II, IRED, the Food Security Pro-gramme, the ECOWAS Community Development Pro-gramme (CDP), the 11th EDF Regional IndicativeProgramme (RIP) and the WAEMU High Level SpecialisedCare Centres Project (HSSHN).

Under PER II, the Bank is participating in the processof establishing a multi-donor trust fund to support thefinancing of projects under the PER. In this regard, theBank has proposed a draft Resolution for the creationof the Fund. The document sent to other members ofthe ad hoc Steering Committee is currently being re-viewed for finalisation and adoption of the regulationsof the fund (Decision to create and advocacy docu-ment with the TFPs). Work is also ongoing on the development of a new phase of the PER.

Some PER projects have been granted an interest ratesubsidy as part of France's Budget Support (GBS) toWAEMU. The Bank finalized the draft tripartite grantagreements for Benin, Burkina Faso, Mali, Senegal andTogo (Commission-BOAD-Member countries). Allthese tripartite agreements have been signed.

2.1. ACCELERATING REGIONAL INTEGRATION THROUGH SUSTAINED INFRASTRUCTURE INVESTMENT

As part of its support for efforts to integrate the Union's economies, two complementary categoriesof actions are generally carried out: the financing of regional projects and the monitoring of regionalactivities, in synergy with the other Community institutions or bodies.



The Bank also participated in the validation workshopof the interim evaluation report on France's overallbudget support to WAEMU, held from 10 to 14 De-cember 2018 in Lomé (Togo). Part of this support wasused to subsidize BOAD loans granted to the membercountries.

The Bank's actions in relation to IRED have involved themanagement of the EDF and the continued implemen-tation of projects financed by the EDF. Disbursementsas at the end of December 2018 stood at XOF132.1billion, or 76.9% of the total amount pledged.

The Bank also contributed to the preparation andorganization of meetings of the Technical Com-mittee, the Steering Committee and the Donors'Council.

Under the food security programme, the Bank par-ticipated in the 7th meeting of the High Level Panel ofExperts on Food and Nutritional Security (HLPE) in theWAEMU region, chaired by the President of Niger, H.E.Mr. Issoufou Mahamadou. The said meeting was heldfrom 5 to 10 July 2018 in Niamey, Niger, with the ob-jective of identifying appropriate ways of promotingfood security and sustainable agricultural processingin the WAEMU region.

Some of the key recommendations that emerged wereas follows: (i) support the regional mechanism for mo-nitoring, evaluation and impact analysis of national res-ponse plans, with a view to better guidingdecision-making in this area; (ii) promote effective ins-titutional and regulatory frameworks for the supervisionand coordination of interventions in the field of foodand nutrition security and resilience (code of goodconduct); iii) assist Member countries in mobilizing re-sources for the implementation of National ResponsePlans and Transhumance Management Plans; iv) assistMember countries in mobilizing the necessary resourcesto intensify the implementation of key programmes.

With regard to the ECOWAS Community Deve-lopment Programme (CDP), following the adop-tion of the Regional Strategy Paper, the ECOWASAuthority of Heads of State and Government had ins-tructed the ECOWAS Commission to initiate actionsto mobilize the required funding. This led to the adoption of the principle of organizing a Round Table.

The Bank took part in the 5th meeting of the StrategicOrientation Committee (COS) of the 11th European De-velopment Fund (EDF) in Brussels in June 2018 underthe Regional Indicative Programme (RIP) of the11th EDF. During the meeting, the COS reaffirmedits willingness to see the development banks participatein the delegated management of EU funds, if they satisfy the requirements for the "7 pillar assessment".

Lastly, as part of the WAEMU high-level specializedhealthcare centre project (PCSSHN), the Bank andthe WAEMU Commission decided, at a meeting in Ja-nuary 2018, to set up a consultative framework. Adraft terms of reference for the framework was sub-mitted to both institutions. The two institutions alsoheld a meeting in Lomé on 25 and 26 October 2018to formalize the consultative framework and draw upa roadmap for the implementation of the project.

BOAD study fund and the funds that may be providedby partners were identified as two sources of fundingfor the studies required to carry out the project. BOADis expected to provide cash advances totaling XOF2.3billion in 2019 for the studies. Given the limitedamount available, BOAD approached the Japan Inter-national Cooperation Agency (JICA), considering itsoperations in this type of initiative. Consultations areongoing.



A. DEVELOPMENT OF BASIC INFRASTRUCTURE

A total of XOF252.3 billion has been provided tostrengthen basic infrastructure. These funds willbe used to: (i) develop hydro-agricultural facili-ties, as well as roads and sanitation, (ii) promoteelectrification in both urban and rural areas, (iii)increase access to drinking water for the popula-tion, (iv) build social amenities (social housing,education) and, (v) boost local economies.

Two hydro-agricultural development projects,worth a total of XOF25.5 billion, were approved forCôte d'Ivoire and Togo respectively. These projects willinvolve the development and rehabilitation of approxi-mately 11,546 ha of farmland, to increase food pro-duction capacity by approximately 12,600 tonnes, aswell as the creation of 6 dams.

The funds provided will help achieve food and nutri-tional security, as well as alleviate poverty in the projectareas. This is expected to result in: (i) an increase inagroforestry and fisheries production, (ii) capacity buil-ding for stakeholders, as well as (iii) the creation of43,471 direct or indirect jobs.

In the area of urban roads, inter-urban roads andsanitation, six projects have received support, for atotal amount of XOF99.5 billion. These include: (i) therehabilitation of the Kédougou-Fouladou road in Se-negal, (ii) the development and asphalting of the Zin-der urban road network in Niger, (iii) the developmentand asphalting of the Blouf loop in Senegal, (iv) theCotonou rainwater sanitation programme, (v) thestorm drain of the Bangr Wéogo Park in Burkina Faso,(vi) and the integrated rehabilitation and developmentof the Gorou watershed in Côte d' Ivoire.

The road projects referred to above cover a total dis-tance of 152 km and will improve the living environ-ment and transport conditions in the affected areas.This will lead to an improvement in the competitivenessof the areas concerned, improve access to such areasand enhance their economic potential. Sanitation pro-jects will provide the necessary investments to sustaina-bly mitigate flooding in cities across the Union and toimprove the urban environment. Approximately 13,410linear metres (ml) of primary collectors will be built.

In the area of urban and rural electrification, atotal of XOF22.9 billion has also been provided for theconstruction of a 15 MW diesel thermal power plantin Bor, Guinea Bissau and the rehabilitation of powerdistribution facilities in Burkina Faso.

These projects, expected to create around 7,600 directand indirect jobs, are intended to boost the country'senergy production capacity and improve access toelectricity.

With respect to improving access to safe drinkingwater, a total of XOF30 billion has been allocated totwo projects to strengthen drinking water supply sys-tems. The objective of these projects, one in Côted'Ivoire and the other in Togo, is to ensure a sustaina-ble supply of safe drinking water to certain popula-tions in the city of Abidjan and semi-urban centres inTogo respectively.

Three projects in other social sectors (social hou-sing, real estate development and education) were financed to the tune of XOF44.4 billion.

In Benin, 944 social housing units were built in the mu-nicipality of Abomey-Calavi. The project will contribute

2.2. SUPPORT FOR INCLUSIVE GROWTH, FOOD SECURITY AND SUSTAINABLE DEVELOPMENT

As in the previous year, the Bank's financing for inclusive and sustainable growth was significant. Interventions in this area included strengthening basic infrastructure and promoting sustainable development.



Sanitation and combating flooding in WAEMU member countriesSome of the recurring natural disasters in the WAEMU region, which impede development programmes and causesignificant losses, both in the public domain and on private property, are droughts and floods. Floods often have lessimpact than droughts, but they remain just as devastating and costly. A visualization proposed by an internationalreinsurer can be summarized as follows, in terms of risks per country.

In 2012, a WHO study indicated thatfor every dollar (about XOF570) invested in sanitation, $5.5(XOF3,135) is obtained in returnfrom lower health expenditures, pro-ductivity gains and fewer prematuredeaths.

Sanitation is therefore a factor of de-velopment. For this reason, it is in-cluded in the sustainabledevelopment goals, particularly in re-lation to SDG 6. Countries in theWAEMU region are regularlyconfronted with flooding that occursduring the rainy season, makingpeople very vulnerable. Only 26% ofthese populations had access tobasic sanitation in 20156.

In line with its objective of suppor-ting sustainable development andinclusive growth, particularly bycontributing to the strengthening of

basic infrastructure, BOAD contribu-ted, during 2018, to the financing ofthree sanitation projects, for a totalamount of nearly XOF60 billion. Theprojects involved are as follows:

(i) the “rainwater sanitation pro-gramme for Cotonou in Benin”, (ii)the “integrated development andmanagement of the Gourou water-shed in Côte d'Ivoire”, and (iii) the

INSERT 2

to an improvement in the living environment of about7,300 people in the middle-income bracket.

Two of such projects in Senegal involve the construc-tion of 500 classrooms to replace temporary sheltersand the construction of a 20-storey multifunctionaltower. These projects will strengthen the quality ofeducation in the country on the one hand and the sup-ply of office space on the other hand, benefiting atleast 2,300 employees working in Dakar.

As part of a revitalization of local economies, anamount of XOF30 billion has been granted to BurkinaFaso to finance its Programme to Support the Deve-lopment of Local Economies. The financing will makeit possible to: (i) provide integrated local developmentkits, (ii) arrange a credit facility of XOF25 billion for acredit programme, (iii) build the capacity of 48,000informal production units.

Source : Swiss Re data, Rating according to the index for Risk Management sponsored by Inter-Agency StandingCommittee (IASC)

Togo

Flooding

Senegal

Niger

Mali

Guinea Bissau

Côte d’Ivoire

Burkina Faso

Benin

0 10

Risk and lowcosts

Risk and high costs

4.3

4.8

7.4

7

2.6

7.5

6.6

5.1

3.3

5.6

4.6

5.1

2.1

1

6

0.5

Drought

6 Source : World Health Organization report on " Progress in water, sanitation and hygiene: 2017 update and SDG estimates "



“project to strengthen the stormwa-ter drainage network in Ouagadou-gou: drainage of the Bangr WéogoPark in Burkina Faso”.

The purpose of the Cotonoustormdrain rehabilitation projectis to build approximately 13,410 li-near metres of primary collectors inCotonou, in eleven (11) catchmentareas between Cotonou East andCotonou West, as well as to pavesome sections supporting the saidcollectors.

Investments to be made are aimedat preventing flooding in the wa-tersheds concerned in a sustaina-ble way and at improving theurban environment, in order to fa-cilitate the movement of users andthe conduct of economic activities

in the areas concerned. The Bank'scontribution to the implementa-tion of the emergency phase of theproject is XOF20 billion.

In Côte d'Ivoire, the objective ofthe integrated development andmanagement programme for theGourou watershed is to contributeto strengthening and securing thesanitation network in the AbidjanDistrict by improving the socio-eco-nomic and health conditions of thepopulations of the four (4) com-munes covered by the Guru water-shed, namely Abobo, Adjamé,Cocody and Plateau. The implemen-tation of this project will make itpossible to solve the problems of re-current flooding in the heart ofAbidjan, through the installation ofa wastewater treatment system,

stormdrain and the construction ofa road network. The Bank contribu-ted XOF29.5 billion to the financingof the first phase of the project..

Finally, with regard to the project tostrengthen the rainwater sanita-tion network in Ouagadougou,divided into four (4) phases, theBank had already set up two (2)loans for a total amount of XOF18billion, in 2010 and 2012. The thirdphase, financed to the tune ofXOF10 billion in 2018, aims to deve-lop the outlet inside and downs-tream of the Bangr Wéogo Park, byrecalibrating several pond. It will si-gnificantly reduce the impact of floo-ding in the Bangr Wéogo park, whilestrengthening the sustainability of investments already made.

INSERT 2 (continued)

B. SUSTAINABLE DEVELOPMENT

Various activities were pursued with a view to opera-tionalizing the Bank's accreditation to the UNFCCCfinancial mechanisms.

The Bank, together with the Adaptation Fund (AF),developed and submitted the following comprehen-sive financing documents for the following operations:

(i) the regional project to promote climate-smart agri-culture in West Africa (USD14 million), in partner-ship with the ECOWAS Regional Agency forAgriculture and Food (RAAF);

(ii) the project to increase the resilience of farmers inManouri, Togo (USD10 million).

The grant allocated for the 1st project was finally ap-proved by the AF Board of Directors in July 2018 forthe amount announced above. The grant agreement

between BOAD and the AF was signed on 26 December 2018.

Two projects were submitted to the Global Environ-ment Facility (GEF) for approval, following theBank's accreditation in 2015. These include:

(i) The project to hybridize diesel engines from multi-functional platforms to solar systems in Togo,which was approved in 2017 for grant funding ofUSD2,672,905. The project grant managementagreement was signed between the Bank and theTogolese Government on 12 October 2018;

(ii) the regional project to support sustainable wastemanagement and reduce POPs emissions. A grantof USD18.9 million is expected to be provided forthe project. Studies and a full financing proposalfor this project are being prepared for submissionand final approval in the first quarter of 2019.



Application for grants from the Green ClimateFund (GCF), for the preparation of development andscaling of 1,500 ha of hydro-agricultural facilities,with practices resilient to climate change in Niger,was approved for an amount of US$439,134. In ad-dition, two projects were prepared and submitted forfinancing by the Fund. These are: (i) the solar ruralelectrification project in Mali, for a total amount of€46.2 million, and (ii) the regional climate financingmechanism project, aimed at intensifying the use ofsolar energy in the least developed countries (LDCs)of French-speaking West Africa, for a total amountof €247 million.

Other environmental and climate finance actionswere also implemented during the year. This includesthe Bank's participation in the following events orrounds of negotiations:

i) A cycle of two structured Green Climate Fund dia-logues with Africa in Bamako, Mali, and with LDCsin Addis Ababa, Ethiopia.

BOAD's participation in these meetings was aimedat strengthening its engagement with the Fund andmember countries, and facilitating interactions onpotential project pipelines at the national and regio-nal levels. It also enabled a better understanding ofthe priorities of the different stakeholders and toshare the views and experiences of other partnersin the preparation and implementation of climateprojects.

ii) The 24th COP on climate change held in Katowice,Poland.

In addition, the environmental and social dimensionwas taken into account in the evaluation of the pro-jects financed, in accordance with the guidelines ofthe institution's policy in this area.

At the same time, the Regional CollaborationCentre (RCC7) supported the Bank's actions in deve-loping carbon projects and climate finance, as wellas in seeking to mobilize climate finance resources.

As part of the development of carbon projects andclimate finance, the RCC continued its assistance tothe development of standardized baselines, in parti-cular, by updating the non-renewable biomass factorin Benin.

In the area of climate finance resource mobilization,the RCC provides assistance to WAEMU countries tofinance projects with a climate component. It alsocontributed to the Bank's accreditation as an obser-ver to the International Capital Market Associations,as part of the green bond issuance project.

The RCC, in collaboration with the Nairobi Frame-work Partnership, held the 1st edition of the AfricanClimate Week in April 2018 in Nairobi, Kenya. Withthe UNFCCC and Young Volunteers for the Environ-ment (JVE), the Centre signed a memorandum of un-derstanding for the establishment of a trainingacademy for young African leaders on climatechange issues, including the negotiation aspectscontained in climate change agreements.

7 An entity hosted by BOAD, and stemming from cooperation with the United Nations Framework Convention on Climate Change.



A. PROMOTING PUBLIC-PRIVATE PARTNERSHIPS (PPP)

As part of the promotion of public-private partnershipprojects, the Regional PPP Project Development Unit(URDPPP) implemented the following actions: (i) par-ticipation in regional projects; (ii) preparation of astudy to propose innovative financial instruments tofacilitate PPP financing in the WAEMU region; (iii) ca-pacity building for PPP actors at member country level;(iv) creation of an information and consultative plat-form; (v) appraisal and promotion of PPP projects; (vi)organization of meetings of the Advisory Committeeon PPP (CO-PPP).

As part of the regional projects, the URDPPP parti-cipated, as a member of the WAEMU Commission'sPPP Working Group (PPP-WG), in meetings of sectoralexperts and of ministers involved in the approval ofdraft PPP strategies and the Community PPP Directive.In addition, it finalized the first version of two draftRegulations, on the institutional framework and ope-rations of the Unit at regional level'' as well as on theUnits implementation of regional PPP projects'. Thesetwo draft Regulations were the subject of inter-insti-tutional consultations between Community institu-tions, before their submission to the WAEMUCommission for submission to the Council of Ministersin 2019.

A limited shopping is also under way with respect tothe study to propose innovative financial instrumentsto facilitate the financing of PPPs in WAEMU. Similarly,a consultant was recruited by the Bank to set up aninformation and exchange platform.

With regard to capacity building for PPP actors,sectoral technical experts working in the PPP Units ofMali and Senegal have received training in the follo-wing areas: (i) socio-economic evaluation of projects;(ii) financial analysis of projects; (iii) quantitative

analysis for the selection of the project implementa-tion scheme and the use of the financial benchmar-king model; (iv) qualitative analysis of the differentmodes of project implementation.

The URDPPP also participated, as a trainer, in the trai-ning session organized by the Regional Higher Schoolof Magistracy (ERSUMA), which was targeted at PPPplayers in the OHADA area.

With regard to the appraisal and promotion of PPPprojects, the dry dock projects in Kayes and Sikasso(Mali) and the Environmental and Natural ResourcesManagement Support Project (Senegal) underwentqualitative and quantitative analysis. The exercise re-sulted in a pre-selection and a comparative analysis ofthe implementation methods of these projects.

In addition, the URDPPP held a workshop to validatethe Preliminary Summary Project (PSA) studies for theconstruction of parking facilities for heavy duty andcargo trucks on both sides of the Benin-Togo border(i.e. Sanveecondji and Hillacondji). The conclusions andrecommendations of the study were forwarded to theauthorities of Togo and Benin for decisions to be takenbefore the possible continuation of the project.

At the same time, the Unit continued its work on thePCSSHN project, participating in the work of theConsultation Framework set up between the Bank andthe WAEMU Commission.

Lastly, the URDPPP held the seventh session ofthe Advisory Committee on PPPs (CO-PPP), aforum for sharing experience on PPPs in the Union.It also held a workshop on the sidelines of the mee-ting, in partnership with the WAEMU Commission,to present and disseminate the study on capacitybuilding for PPP development in WAEMU.

2.3. SUPPORT FOR BUSINESSES AND GOVERNMENTS, DEVELOPMENT OF FINANCIAL ENGINEERING

AND SERVICES



Building capacity to develop PPPs in WAEMU

The World Bank financed a study on this issue with the active participation of BOAD.

The study seeks to: i) strengthen theregional institutional framework forPPP implementation, ii) contribute tothe harmonization of PPP strategies,and iii) facilitate the developmentand implementation of PPP projectsin the WAEMU region.

It has been divided into three distinctcomponents: i) institutional streng-thening; ii) building a portfolio ofPPP projects; iii) financing strategy.

Work on the first component in-cludes an assessment of the dispa-rities between the draft regionaldirective and the national laws go-verning PPPs. The analysis of thecurrent practice made it possible toassess the experience and skills ofthe institutions involved in the im-plementation of PPPs in each coun-try and to identify capacity buildingneeds. The component report re-commended the definition of aninstitutional framework for the de-velopment and implementation ofregional projects, as well as the es-tablishment of a flexible legal fra-mework that could be adapted tothe specific features of each projectand that is compatible with nationalregulations.

The second component made it pos-sible to build a portfolio of projectslikely to be developed under PPPs in

WAEMU, and also identify two prio-rity projects. However, the analysiscarried out only made it possible toidentify a regional project within themeaning of the definition containedin the draft Directive. In addition, the18 MW Gourbassi hydroelectricpower project in Mali, which is beingcarried out by OMVS, has under-gone extensive financial study.

The third component studies themodalities of PPP financing in theWAEMU region, in order to developrecommendations for the mobiliza-tion of resources tailored to eachphase of project development. Inaddition to reviewing the sources offunding available in the region, thiscomponent includes, as such, a de-tailed analysis of the funding instru-ments for project preparation.

The recommendations include:

- Aligning the country definitions ofPPPs with the regional definitions;

- Improving project preparation;

- Strengthening the analysis of thebudgetary sustainability of PPP projects;

- Strengthening the measurement ofcountries' commitments;

- Training and providing technicalsupport to the various countries inthe structuring of their projects;

- Handling the first phases of projectdevelopment, from identificationto feasibility study;

- Promoting competition and hand-ling informal offers, in accordancewith the regional strategy;

- Mobilizing dedicated teams withgood experience in PPP structuring;

- Leveraging on the resources of De-velopment Finance Institutions,which remain the main financiersof infrastructure projects in sub-Saharan Africa;

- Seeking alternative sources of fi-nancing (green finance, resourcesfrom emerging countries, particu-larly Islamic finance and Asian financing;

- Using blending finance instrumentsthat are tailored to project profita-bility and risk (provision of invest-ment grants, mobilization ofguarantee or risk hedging tools);

- Examining the profitability of eachproject in order to define an appropriate financing scheme.

INSERT 3



B. SUPPORT FOR THE DEVELOPMENT OF INDUSTRIESAND EMERGENCE OF REGIONAL COMPANIES

In terms of industrial development and the emer-gence of regional companies, four (4) direct loanstotaling XOF57.5 billion were granted. These include(i) the refurbishing works at the Hôtel 2 Février in Togo,(ii) the expansion of shea butter production plant inBurkina Faso, (iii) the establishment of a cement fac-tory in Côte d'Ivoire, and (iv) the expansion of the production capacity of a cement plant in Senegal.

Three (3) refinancing facilities totaling XOF20 bil-lion were granted to financial institutions in theUnion. These will increase the capacity to offer pro-ducts adapted to SMEs. In addition, a subordinatedloan of XOF6.5 billion was granted to NSIA BankBenin.

The Bank's equity investments include four opera-tions for a total amount of XOF13.5 billion. Theseoperations include CAURIS IV, AFIG Funds II, ECPAfrica Fund IV and ADIWALE I. The Bank also acqui-red a XOF326.4 million stake in Banque Régionale

des Marchés (BRM) Holding SA, which is being created, through the partial transfer of shares held inthe capital of BRM.

Five short-term operations worth a total of XOF31billion were negotiated. These include:

- a XOF5 billion loan to a Malian state-owned textilecompany to finance operating needs;

- a XOF6 billion loan to a company in Burkina Fasofor the import of raw materials (clinker, limestoneand gypsum) for cement production;

- a XOF10 billion credit facility to a bank in BurkinaFaso to support the import of agricultural inputs;

- a XOF5 billion credit facility to a Senegalese finan-cial institution to refinance operations for the 2018-2019 agricultural year;

- A XOF5 billion credit facility to a Senegalese bankto help finance the groundnut season.

Cumulative short-term financing Short-term financing in 2018

33.9%AgricultureXOF101.2 Bln

28.9%EnergyXOF86.2 Bln

12%Finances

XOF35.7 Bln

9.7%TransportXOF29 Bln

15.5%IndustryXOF46.2 Bln

80.6%Agriculture

and rural development

XOF25 Bln

19.4%IndustryXOF6 Bln

Graph 6

BREAKDOWN OF SHORT-TERM FINANCING PER SECTOR AS AT 31 DECEMBER 2018 (IN BILLION)



Short-term financing is provided to strategic sectors,most of which is directed towards agriculture, energyand industry.

In the area of financing arrangements, the Bankmobilized XOF68 billion for the following principals:i) Caisse des Dépôts et Consignation (CDC), for theconstruction of a 20-storey multifunctional tower inDakar, ii) PFO Africa Côte d'Ivoire, for the construc-tion of a water treatment plant for Abidjan, iii) theSenegalese government for the construction of roadand utility networks in Diamniadio.

Also, steps are being taken to mobilize approximatelyXOF270 billion for various borrowers: i) the Govern-ment of Senegal, to finance the construction of theroads and various networks in Diamniadio; ii) EranoveSA, to build a 65 MW thermal power plant in Togo; iii) Phoenix Properties Investment, to build a 4-starhotel in Abidjan, under the "Radisson Red" brand; iv) MK Construction and the Government of Côted'Ivoire, for the reinforcement of the Kanawolo-Ko-rhogo road axis; v) the Government of Niger, for addi-tional works relating to the Hamani Diori interchangeand the development of the Katako market area.

Support for the expansion of cement production capacity in Senegal and Côted’Ivoire

In 2018, BOAD committed a total amount of XOF50 billion to support two cement projects in Côte d'Ivoire andSenegal, with a total capacity of more than five (5) million tonnes and a total cost of XOF320.6 billion.

The first of the two projects involvesthe expansion of the production ca-pacity of Les Ciments du Sahel (CDS)SA, in Kirène, Senegal. This includesthe installation of a third integratedand autonomous clinker and cementproduction line with a capacity of2.7 million tonnes of cement peryear. BOAD's provided XOF25 billionfor this project, which is expected tocreate about 2,500 jobs during im-plementation and 4,200 jobs duringoperation.

The second project involves the ins-tallation of a cement production unit

by CIMENTS DE CÔTE D'IVOIRE (CI-MIVOIRE), in Abidjan, Côte d'Ivoire.The clinker crushing capacity of theinstalled unit will be 3 million tonnesof cement per year. The Bank's pro-vided an amount of XOF25 billion tothe project, which is expected tocreate 387 jobs during implementa-tion and 440 during operation.

These projects are intended to in-crease supply to meet the growingdemand at the national and regio-nal level, and to substitute competi-tive domestic production forimports. BOAD's collaboration in

their implementation confirms itscommitment to further work in theinfrastructure and construction sec-tor. Indeed, in the subregion, thetargeted sector faces major chal-lenges, both in terms of theconstruction and upgrading of roadinfrastructure and in terms of peo-ple's access to decent housing,through housing projects or privateindividual housing.

The implementation of the two pro-jects will also lead to an improve-ment in tax revenues in the twocountries directly involved.

INSERT 4

BOAD provided a total of XOF159.8 million ingrants as financial assistance to member countriesand regional institutions.

The projects supported include: (i) capacity building,(ii) organization of steering committee meetings, do-cument validation workshops, fora and (iii) work onthe preparation of programming documents.



Key resource mobilization actions included the mobili-zation of credit facilities from partners and the streng-thening of cooperation.

A. AGREEMENTS SIGNED IN 2018

With regard to the credit facilities, two agreementswere signed with the Arab Bank for Economic Deve-lopment in Africa (BADEA). These facilities were in respect of:

- the first loan of USD30 million (XOF16.9 billion) forone year and intended exclusively to finance importsof WAEMU member countries from Arab countries;

- the second, involving an amount of USD15 million(XOF8.5 billion) and repayable in 10 years, is intendedto refinance private sector projects.

B. LOANS APPROVED BY THE BOARD OF DIRECTORS

During the year, two loan proposals were approved bythe Board of Directors. These are as follows:

- the proposal for a €30 million (XOF19.678 billion)credit facility, repayable in 10 years, from the Aus-trian Development Bank to finance infrastructureprojects and productive private sector investments inWAEMU countries;

- The proposal for a €50 million (XOF32.797 billion)credit facility from the Belarus Development Bank, re-payable in 10 years, for the refinancing of projectsusing goods and services of Belarusian origin.

C. RESOURCE MOBILIZATION ON CAPITAL MARKETS

The Bank has been considering ways to explore otheropportunities in the international financial market andto set up a mechanism for the repayment of its Euro-bonds. It has worked on the implementation of a "Ne-gotiable European Commercial Paper (NEU-CP)"programme, which involves issuing short securities onthe French money market. It has also engaged with

external partners issuing green bonds, as well as withsome regional financial market players, with a view toissuing a medium-term green bond.

In addition, in order to better control the conditionsfor the repayment of its Eurobonds, the Bank has decided to create a sinking fund.

D. SUBSIDIES

The Bank has since December 2015 obtained approvalfrom its Board of Ministers to set up a subsidy mecha-nism for its concessional financing. In 2018, this me-chanism was increased by XOF28 billion, bringing thetotal subsidy resources to XOF81.2 billion over the lastthree years (2016-2018).

E. COOPERATION AND PROMOTION OF PARTNERSHIPS

Various discussions and reviews were conducted withtraditional partners on the upcoming organization ofbilateral thematic meetings. This was the case withAFD, KfW and BADEA.

The Bank has also initiated technical discussions withKfW on two operational issues: the establishment of aconcessional loan programme adapted to natural disas-ters (PACAN) and the creation of a fund for digital trans-formation in West Africa. These two initiatives areexpected to be supported by the German Government.

The sinking fund is intended to help governments inFrench-speaking West African countries to developtheir IT systems in order to improve their productivityand services to the public. The Bank is expected to bean major player in the implementation of the project,as well as the Fund Manager. An identification missionto WAEMU countries is scheduled for the first half of2019, in order to carry out a first summary assessmentof digitization needs.

In addition, the Bank is pursuing its efforts to submitto an audit of the 7 pillars in order to be eligible forindirect management of European Union financing.

2.4. DEEPENING THE RESOURCE MOBILIZATION PROCESS



2.5. ALIGNING MANAGEMENT AND GOVERNANCE

A. LEGAL CERTAINTY OF OPERATIONS

As part of the legal security of operations, the actionsfocused mainly on the following points:

As part of the legal security of operations, the actionsfocused mainly on the following points:

• regulatory monitoring to align the Bank's acti-vities with the normative frameworks applicableto international financial institutions;

• management of guarantees taken to hedge fi-nancing, particularly, by continuing the globalreview and evaluation of the Bank's hedges inthe various WAEMU countries;

• legal procedures to clean up the downgradedloan portfolio;

• review of BOAD's environmental and socialcompliance verification system and grievanceprocedure, which is one of the mechanisms forthe structured and continuous management ofrisks and environmental and social impacts associated with projects financed by the Bank.

Furthermore, with a view to aligning risk managementrelated to money laundering and terrorist financingwith the relevant regional and international recom-mendations, an updated version of the Bank's finan-cial security policy was adopted by its Board ofDirectors in December 2018.

B. MARKETING AND COMMUNICATION

In the area of communication, the Bank has upda-ted its communication and public relations strategy byadopting a modus operandi for its presence on socialnetworks. The new communication strategy is des-igned to "affirm and promote BOAD's leadership" infinancing major development projects in the WAEMUregion.

In keeping with this ambition, the Bank has developedand implemented a media plan based on three typesof media; those with a broad audience, those that canbe used as a complement and those that offer oppor-tunities for visibility. The objective is to have a morestructured presence of BOAD in various media spaces,thus making it possible to intensify and better orga-nize the dissemination of information on its activitiesand products, both in the WAEMU region and for itsinternational partners.

The media presence thus enabled the Bank's manage-ment to participate effectively in high-profile TV pro-grammes, in particular "Réussite" by Canal Plus,"Décryptage" by Africa 24 and "Focus" by Africa-news. The same applies to the regular publication ofeditorial content in pan-African news media such asJeune Afrique, Financial Afrik, La Tribune Afrique, Eco-fin, as well as in-flight magazines on Brussels Airlines,Ethiopian Airlines, Air Côte d'Ivoire, Asky Airlines.



The Bank also produced monthly reports in the 8WAEMU countries, as well as radio reports on variousprojects financed in Senegal, Côte d'Ivoire and Togo,which gave an opportunity to the project beneficiariesto highlight the impact of BOAD financing on theirdaily lives. The Bank also produced a new corporatevideo, with short versions in radio and television spotson its areas of intervention and products.

As part of its digital strategy, the Bank carried out anSEO (Search Engine Optimization) audit in order to im-prove the referencing of its website. It also focused onusing social networks (Facebook, Twitter, Youtube) to extend the reach of its publications to new targets,generate interest and attract audience on these pages.

As part of its press relations and non-media promo-tional activities, the Bank held open days in Dakar, Se-negal. This was in the form of an informationworkshop for journalists and local authorities on"BOAD's strategy and involvement in climate fi-nance". The event also featured an open forum withprivate sector stakeholders.

The Bank reviewed and updated its marketing strategywith a view to improving its sales approach and customer relations.

The Bank also continued to promote its products andservices through participation in trade fairs, fora andother thematic meetings. As part of efforts to increaseits visibility, poster campaigns on advertising spacesand in business lounges at some WAEMU airportshave been initiated.

C. HUMAN RESOURCES

Previously undertaken actions in the area of human re-sources management policy modernization have beencontinued. Thus, the implementation of the system forsetting objectives and evaluating staff performancehas been strengthened. The same was true of targetedindividual or collective training actions, all aimed at capacity building.

As at 31 December 2018, BOAD had a total staff com-plement of 308, including 295 operational staff, 10seconded staff and 3 on leave of absence.

Category Staff strength as at Staff strength as at Staff strength as at 31.12.2016 31.12.2017 31.12.2018

PROFESSIONAL STAFF 153 164 170

SUPPORT STAFF 119 112 125

TOTAL 272 276 295

Table 2

STAFF STRENGTH OF BOAD BETWEEN 2016 AND 2018



The change in the number of employees in 2018 isdue to the implementation of the multi-year employ-ment and skills forward-planning programme. Thisplan, developed on the basis of the 2015-2019 stra-tegic plan, takes into account (i) the resourcing ofstaff, (ii) the needs of the various units and depart-ments, (iii) as well as the special skills required in themanagement of new activities.

Thus, 34 new staff members, including 33 new re-cruits and one (1) on return from secondment, joinedthe Bank this year, while there were 15 departures forvarious reasons, representing an increase in the num-ber of operational staff of 19 in comparison to 2017.

Also, as part of its "Young Graduates" programme tofoster smooth succession of its staff, the Bank recrui-ted fourteen (14) young graduates from the commu-nity area and the diaspora, who are on professionalinternships in the organizational units.

D. ASSET MANAGEMENT AND SAFETY OF PERSONSAND PROPERTY

Actions undertaken in this area have focused on impro-ving the working environment, continuing or comple-ting certain building programmes and implementingthe energy efficiency programme.

In terms of improved working environment,changes have been made, including: (i) the rehabilita-tion of various halls at headquarters and the creation ofnew workspaces, (ii) the cladding of the headquartersbuilding, (iii) the enhancement of fire safety and accesscontrol systems, (iv) the renovation of the video surveil-lance system, (v) further standardization of furniture inheadquarters offices and resident missions..

With regard to the real estate program, theconstruction work on 134 housing units in the BOADresidential area for staff members, as well as those re-lated to the amusement centre, has been completed.

The implementation of the energy efficiency pro-gram continued with the replacement of office lampswith brighter and more compliant LED lamps.

E. MONITORING AND EVALUATION OF OPERATIONSAND KNOWLEDGE MANAGEMENT

In the area of ex-post project evaluation, the Bankorganized the portfolio evaluation validation works-hop in Togo, which covered nineteen (19) projectsspread over four (4) sectors of intervention. The Bankhas also started country portfolio evaluation in Benin.This second evaluation exercise involves sixteen (16)operations, divided into four (4) areas of intervention,namely: (i) rural development, (ii) energy, (iii) road infrastructure and (iv) drinking water supply.

The overall objective of the country portfolio8 evalua-tion is to assess the development outcomes of projectsfinanced by the Bank. The specific objectives include:(i) assessing the impact of projects financed in each ofthe sectors concerned; (ii) identifying the factors thathave affected the performance of the projects; (iii) ma-king recommendations on the various interventions.

With regard to socio-economic impact assess-ments and thematic assessments, the Bank conti-nued, in collaboration with the International Initiativefor Impact Evaluation (3ie), the socio-economic impactassessment of the Matam agricultural developmentproject, phase 2 "extension" in Senegal, as well as theM'Bahiakro hydro-agricultural development project inCôte d'Ivoire. The second surveys and analyses havebeen conducted.

The Bank's efforts in monitoring and evaluatingdevelopment outcomes has led to activities des-igned to contribute to (i) a better assessment of theprospective impacts of nineteen projects and (ii) theestablishment of a system for collecting and analysingdevelopment outcome indicators. In addition, theBank provided various partners (AFD, KFW, AfDB, etc.)with the values of development outcome indicatorsfor projects financed.

8 Refers to a set of projects/programs from one or more sectors of intervention within the same geographical area



In this regard, some countries areaiming to scale up their investmentfrom a current average of around24.5% to at least 35% in order toplace real growth on a sustainablefooting above the 7-8% thresholdrequired to create jobs and reducepoverty . This explains the ambitionof the development plans adoptedduring the decade.

The Bank on its part is supportingthese efforts. Over the last tenyears, it has granted, on average,XOF420 billion in yearly loans to itsmember countries.

However, the Bank, like the interna-tional financial community, doesnot lose sight of the fact that the in-vestments necessary to achieve theabove-mentioned objectives requiresignificant amounts of borrowingresources, and that the sustainabi-lity of the resulting repaymentconditions deserves attention.

Moreover, the overall quality of in-vestments, as well as their real ef-fects on growth, are matters ofconcern for both governments andfunders. It is to help address thisissue that the WAEMU Commis-sion, in collaboration with otherCommunity institutions (notablyBCEAO and BOAD), commissioneda study on the quality of MemberStates' public investment expendi-ture. The study was to examine thestructural conditions that must ac-company an increase in public in-vestment expenditure in order topromote strong economic growth.Some of the findings or conclusionsfrom this study are as follows:

Current state of public capitalexpenditure

i) There is a significant proportion ofrecurrent expenditure in coun-tries' qualified “capital” expendi-ture. This is particularly the casewith expenses related to the ope-ration of the project managementunits;

ii) Domestic financing is growingcompared to external financing,in all countries except Guinea Bis-sau where external resources ac-count for 94% of investmentsdue to government's recourse tothe (regional) capital market;

iii) Four sectors account for the bulkof investments: production sup-port infrastructure, rural deve-lopment, education and health;

iv) The content of public capital ex-penditure is not harmonizedacross WAEMU.

Macro-econometric analysis ofthe quality of public investmentexpenditure

Analyses show that investments,both public and private, have a si-gnificant and positive effect on eco-nomic activity in most membercountries. The effect is mixed forsome countries, due mainly tocrowding-out effects and/or poormanagement of public capital ex-penditure.

Expenditure on human capital for-mation is also a component with adirect positive effect on growth.

However, given the scale of needs,their share in public investment remains low.

Moreover, studies have showed thatinvestments are less effective inWAEMU countries than in referencecountries. This shows a stagnation,or even a decline in marginal capitalproductivity over the recent period.

These analyses confirm the findingsof other studies conducted byBCEAO and the IMF. The IMFstudy indicates, for example,that about 40% of the poten-tial impact of public invest-ment is lost.

Recommandations

With the exception of Côte d'Ivoire,which has achieved 80% of its prio-rity investment programme (PIP), theother WAEMU countries have lowrates. These countries should put inplace mechanisms to remove bar-riers to the successful implementa-tion of their PIP projects andprogrammes. A strengthening of pu-blic expenditure management couldalso improve their efficiency and im-pact on growth.

In any case, all member countriesshould continue their investment ef-forts, particularly in energy andtransport infrastructure, in agricultu-ral mechanization and training ofquality human capital in order tosupport value chains in industry,agriculture and services alike.

INSERT 5

Since the start of the decade, WAEMU member countries have been developing key infrastructure in order to reduce deficits in this area and sustainably improve living conditions for their populations.

Quality of public investment expenditure in WAEMU member countries (*)

(*)Study on the quality of public capital expenditure inWAEMU member countries



In terms of knowledge management, the Bankhas continued to operationalize its information mo-nitoring, visibility and image tools. In this regard, ithas maintained the monitoring of relevant informa-tion sources, collected useful knowledge on the areasof interest of its structures, and analyzed informationrelating to its reputation on Internet and social net-works. The Bank has also strengthened its monitoringsystem by setting up a monitoring system for itscounterparties.

F. GOVERNANCE, CONTROL SYSTEMS AND RISK MANAGEMENT

Year 2018 saw a strengthening of the Bank's gover-nance and the continued upgrading of managementtools.

Internal audit and financial control: in accordancewith the programme approved by the Audit Commit-tee, audits were carried out on internal processes andongoing projects in the member countries. The re-commendations made make it possible to strengthenthe internal control system, risk management and theimprovement of the project execution process.

All transactions for the acquisition of goods and ser-vices as well as the disbursement of funds have beenchecked for compliance and legality.

The Bank has also continued to update its internalaudit procedures in the light of developments in inter-national standards and best practices in this area.

Bank Audit Committee: the Audit Committee heldits three regular meetings during which it examined: i) the financial statements for the year ended 31 De-cember 2017; ii) the summary statement of financingproposals examined by the Bank in 2017; iii) the

interim financial statements of BOAD as at 30 June2018 before their approval by the Board of Directors;iv) the outcome of the call for tenders for the appoint-ment of the Bank's External Auditor for 2019 to 2021inclusive; (v) the balance sheet of activities for 2018and the draft programme of internal audit activitiesfor 2019; (vi) the situation of the Bank's portfolio asat 30 September 2018; (vii) the Bank's interim finan-cial statements as at 30 September 2018; (viii) the sta-tus of follow-up on its recommendations; and (ix) thestatus of follow-up on the implementation of the recommendations of the External Auditor.

The Bank will continue to strengthen its control me-chanisms in 2019. As part of its continuous assuranceand quality improvement program (PAAQ), the inter-nal audit department will be evaluated by an externalauditor to improve its services.

External audit: PRICEWATERHOUSECOOPERS (PWC),the External Auditor has reviewed and certified wi-thout qualification the Bank’s, FDC and FDE accountsfor the 2017 financial year. These accounts have beenapproved by the Council of Ministers. The firm alsocarried out a limited review of the interim financial sta-tements as at 30 June 2018, in accordance with IAS34 of the IFRS accounting framework.

Ethics, prevention and fight against fraud andcorruption: the Bank continued to consolidate itsmeasures to combat fraud and corruption. This hasbeen achieved by i) increasing the number of staff inthe Ethics Division, ii) conducting training/sensitizationsessions for staff of that division, and iii) improvingworking tools. The Ethics Division dealt with variouscases of compliance with the Staff Code of Ethics, aswell as allegations of fraud, which gave rise to recom-mendations for improving the prevention system.



Procurement control: This involved both contractsfinanced as part of the Bank's operations and internalprocurement. Training sessions were held on theBank's procurement procedures for stakeholders in thepublic procurement chain in two member countries(Mali and Niger). Côte d'Ivoire, Togo and Guinea Bissau will receive the same training in 2019, followingBenin, Senegal and Burkina Faso.

Result and performance-based management: the mainpillars of the Bank's results and performance-basedmanagement system, namely the programme budgetapproach, budgetary control, performance evaluation,the network of dashboards and management cost accounting, were consolidated during the year.

The cost accounting management system was revita-lized during the period, with the effective productionof the 2016 and 2017 annual reports.

As part of its efforts to continuously improve its infor-mation system, the Bank has developed and deployeda new dashboard network management application. As part of the monitoring of the Bank's overall perfor-mance, quarterly key performance indicators (KPI) ana-lysis notes were produced, as well as summary notesof the evaluations of responsibility centre performancecontracts.

The Bank continued to manage its credit, market andoperational risks.

In order to improve current practices, the portfolio ra-ting models have been calibrated according to bestpractices, with the development of new models forproject finance, sovereign portfolio and equity invest-ments. The reading of the rating system was thus lin-ked to that of the international rating agencies. Interms of impairment of receivables, IFRS 9, whichcame into force internationally in 2018, has been implemented.

G. UPGRADING THE IT SYSTEM

During the year, the Bank continued to modernizeand secure its information system.

In terms of modernization, it has finalized the pro-ject to interconnect its resident missions with head-quarters through the implementation of an internalcommunication network based on VSAT techno-logy. New collaboration and communication toolssuch as SKYPE FOR BUSINESS have been deployed.The various platforms concerned enable the Bank'susers to securely optimize communication amongstthemselves and with their external correspondents.

In addition, the banking operations managementapplication was reviewed and optimized on a moremodern technological platform in order to preparefor an easy transition to SAP Banking. The Bank'sstaff has also continued with the stabilization andappropriation of the SAP modules already in ope-ration. These include: finance and managementcontrol (FICO), human resource management (HR)and supply management (MM).

The deployment of a high value-added module forpersonnel management, "Employer Self-Service/Managers Self-Service (ESS/MSS)", conti-nued with the implementation of functionalitiessuch as i) the online publication of pay slips, and ii)the online consultation of personnel information.

In terms of security, the Bank monitored technolo-gical developments and subsequently trained and cer-tified some of its staff to ISO 27001 and ISO 27005standards. All due diligence (intrusion test, IS securityaudit, etc.) was carried out in order to maintain theBank's ISO 27001 certification of its WSIS.



0

500

1000

1500

2000

100

150

200

250

300

EQUITY DEBT DEBT RATIO

20182017201620152014201320122011201020092008

237.8

260.2

168.5

181

197

212

145

155.8

225

261.9240

Graph 7

Evolution of equity, debt (XOF'bln) and debt ratio

H. FINANCIAL MANAGEMENT

Pricing and financial management: the Bank's pri-cing model ensures greater flexibility in the pricing ofoperations subject to financing.

Also, the financial steering project launched in 2017continued in 2018. The changes expected as part ofthis project include i) an improvement in the manage-ment of both on and off-balance sheet risks, ii) astrengthening of financial reporting, combined withfinancial management control.

The feasibility study conducted as part of the firstphase of the project was completed at the end of

2017. The second phase relating to the operationali-zation of the financial management system began inthe first half of 2018 and is expected to be completedin the second half of 2018.

Financial situation: the Bank's total balance sheet in-creased from XOF2,573.5 billion as at 31 December2017 to XOF2568.2 billion as at 31 December 2018.

The Bank's financial situation remains sound, with a ba-lanced financial structure. At the end of December 2018,shareholders' equity represented approximately 27.6%of the balance sheet total and the ratio "outstandingborrowings/shareholders' equity" (debt ratio) stood atapproximately 240.9% for a 300% statutory threshold.



The operation is characterized by the following keyfeatures:

- a dominant share of loan income, which is theBank's main activity (75.02% of the budget incomegenerated);

- a generally controlled cost of borrowing resources(4.23% on average, market resources and concessionalresources combined);

- a net banking income of XOF54.3 billion as at 31December 2018 as against XOF37.4 billion as at 31December 2017;

- a prudent cash management in accordance with theliquidity policy;

- the application of a prudent and proactive provisio-ning policy with the implementation of IFRS 9 basedon the principle of "expected losses".

The overall gross deterioration rate of the portfoliostood at 2.21% at the end of December 2018 com-pared to 2.34% at the end of December 2017. TheBank intends to continue to monitor and improvethe quality of the portfolio.

The Bank's operations continue to yield positive re-sults, despite the loss of embedded margins over thepast few years due to the lack of sustainable conces-sional resources. Net profit at the end of 2018 stoodat XOF18.2 billion compared to XOF13.2 billion at31 December 2017. Part of this result will contributeto the replenishment of the subsidy mechanism, buta major part will be allocated to strengthening equitycapital.

The Bank will continue to control its spending inorder to maintain an attractive interest rate thatmeets the requirements of development financing.

It should also be noted that the capital adequacyratio (internal approach) is 22.9%. The level of theBank's capital remains in line with its risk level.

Solar energy in theWAEMU economies:

overview of the situation,challenges and prospects

THEME FORTHE YEARSolar energy in theWAEMU economies:

overview of the situation,challenges and prospects

THEME FORTHE YEAR


Solar radiation onhorizontal plane reaches2200 kWh/m²/year inWAEMU.

More than 600 MW ofgrid-connected solar andwind power are beinggenerated in the area.

The development ofsolar energy isconstrained by thestructure of the energysector.


SOLAR ENERGY IN THE WAEMU ECONOMIES

As part of the commemoration of its 45th anni-versary, BOAD held a forum on 14 and 15 Novem-ber 2018 on the theme "Solar energy in theWAEMU economies: overview of the situation,challenges and policies".

The aim of this forum was to promote an emer-ging regional renewable energy economy, in ge-neral, and solar energy, in particular. The choiceof theme also reflected the Bank's commitmentto contribute to the implementation of the ob-jectives of the Regional initiative for sustainableenergy (IRED) adopted by the WAEMU Confe-rence of Heads of State and Government in 2009.

One of these objectives is to significantly in-crease, over the next few years, the rate of accessto electricity and the share of renewable energiesin the energy mix of WAEMU member countries.

Currently, the rate of access to electricity in thesecountries is about 40.1% on average, and 14.7%for rural areas. These rates are even lower thanthe sub-Saharan averages of 42.8%, in general,and 24.8% for rural areas.

However, energy is a crucial driver of economicgrowth and improved quality of life. The condi-tions of its production, distribution or accessibi-lity increasingly determine the relevance ofpublic ambitions and policies aimed at inclusiveand sustainable economic development. This mayalso help to explain why access to energy is an in-tegral part of the sustainable development goals.

Power generation is one of BOAD's priority sec-tors of intervention. The Bank is involved firstand foremost in financing projects, but also inthe formulation of regional strategies, in synergywith community bodies or institutions such as theWAEMU Commission, BCEAO, WAPP, CEB and va-rious technical and financial partners.

At the end of December 2018, BOAD's commit-ments to energy projects stood at XOF1,069.5 bil-lion for 133 projects. These included fifteen (15)renewable energy projects, financed with a total

of XOF138.7 billion (13% of the Bank's financingin the energy sector), and more specifically, sevensolar energy projects totaling XOF84 billion. Ho-wever, the Bank has a lot to achieve in the areaof renewable energies, and especially solarenergy.

The November 2018 forum concluded that theWAEMU countries can, with solar energy, quicklyachieve very competitive kWh costs, in line withdevelopments observed at the internationallevel.

In an increasing number of countries, solarenergy is now the cheapest source of electricity,and examples of solar installations exist in all sec-tors, with proven reliability for all power levels,from Watt to GW, kW and MW. As for the steadydecline in the cost of solar energy, it is expectedto continue, and a further halving is expected by2030.

Apart from the attractiveness of a lower cost forpower generation, there could also be a de-cor-relation of this cost with hydrocarbon prices, aswell as advances in terms of energy indepen-dence. In addition, an improvement in the solarenergy rate, in the countries' energy mix, wouldease public finances in the face of the structuraldeficits of public electricity supply companies.

A trend such as the one mentioned above couldeven, in the long run, generate a certain attractionof energy-consuming industrial companies to areasin Africa with low-cost solar energy production.

This second part of the BOAD annual reportcontains a combination of information from a li-terature review conducted for the forum andviews collected during the discussions held du-ring the forum. It consists of four sections rela-ting successively to the following sub-themes: (i)solar energy in the WAEMU space ecosystem, (ii)the main obstacles to the take-off of solar energyin the WAEMU, (iii) private investment and pro-duction, (iv) the prospects for solar developmentin the WAEMU area.



SOLAR ENERGY IN THE ECOSYSTEM OFTHE WAEMU REGION

1

West Africa's solar potential is very high. The WAEMU region, in particular, enjoys good sunshine

Installation of solar panels



Source: Canadian Pacific Consulting Services (CPCS) based on IRENA 2017 data

0.0

0.2

0.4

20172016201520142013201220112010

Average cost of fossil energy

Average cost of solar energy

Cos

t of k

Wh

(US$

of 2

016)

Graph 1

Average cost of solar energy and fossil energy

West Africa's solar potential is very high. The WAEMUregion, in particular, enjoys good sunshine conditions:horizontal radiation exceeds 2200 kWh/m²/year inNiger and often varies between 1800 and 2100kWh/m²/year in Senegal, Mali, Burkina Faso and nor-thern Benin. However, the sun's resource is still largelyunderexploited throughout this area.

It would be possible to obtain very competitive costsin the short term, in line with international trends, withprices per kWh estimated, in some European coun-tries, at around 4 euro cents, or XOF25. Photovoltaicsolar technology thus offers a real opportunity to in-crease the access of populations and companies toclean and competitive energy, whether grid or off-grid.

1.1. GENERAL OVERVIEW

The cost of solar energy is expected to continue tofall steadily, and further halving is expected by 2030.In addition, the cost of storage appears to be increa-singly affordable, with a reduction in the price ofbatteries to around 40% over the next five years.

The graph below shows that the drop in the price ofsolar energy is an accelerator of its deployment andgeneralization. This development is supported by theimplementation of supportive public policies.



Graph 2

Development phase of the solar market and corresponding support policies

Source: International Energy Agency.

Recent successes and ongoing experiences in WAEMUcountries should therefore be encouraged and repli-cated. In total, there are more than 600 MW of solarand wind power connected to the grid, currently beingclosed or under construction. However, there is still a

need to reduce the implementation time of solar pro-jects in the region (5 to 7 years) in order to achieve aduration of around 2 years, in line with technologicaladvances.

Start-up Take-off Extension

Price of solar energy

International price benchmarking

Deployment of solar energy

Start-up phase

- First private projects appear- A strong public support isnecessary to encourage the firstinvestors

- The regulatory framework(authorization procedure, etc.) is still under development.

Take-off phase

- The market is growing fast- The role of public players is tofoster convergence to externalprices

- The regulatory framework isgetting improved and fine-tuned

Extension phase

- The market has grownsignificantly

- Prices are in line with externalprices

- Grid integration is the majorconstraint.

Evolution of solar market

Support policies



Country Project Type of project Installed capacity Implementation statusBenin DEFISSOL Public 25MW Financing agreement signed

with AFD & EUBenin Solar projects within the framework IPP 45MW Development stage

of the Compact MCC Burkina Faso Zagtouli 2 Public 17 MW RFP being prepared. Financing

by the European InvestmentBank

Burkina Faso Koudougou Public 20 MW RFP being prepared. Financingby the World Bank

Burkina Faso Kaya Public 10 MW RFP being prepared. Financingby the World Bank

Côte d’Ivoire Korhogo Solaire IPP 25 MW Under development, the start ofconstruction has been announced

Côte d’Ivoire Boundiali Public 37,5 MW Construction under way. Co-finan-cing KfW/EU/Ivorian Government

Guinea Bissau Bissau, Gabu and Public 22 MW Funding provided by BOAD Canchungo power plants

Mali Kita / Akuo Energy IPP 50 MW Development stageMali Sikasso / Power Pro IPP 50 MW Development stageMali Ségou solaire (Scatec) IPP 33 MW Development stageMali Koutiala IPP 25 MW Development stageNiger Agadez Hybrid Power Plant Public 13 MW Construction expected in 2019Niger Gorou Banda Public 20 MW Financing agreement signed at

the end of 2018 (EU/AFD)Senegal Kahone et Kaël (Scaling Solar) IPP 60 MW Power purchase agreement

signed at the end of 2018Senegal Diass Public 23 MW Under construction

TOTAL 440 MW

Table 2

SOLAR POWER PLANTS UNDER CONSTRUCTION OR IN AN ADVANCED STAGE OF DEVELOPMENT

Source: CPCS, 2iE research

Country Project Type of project Installed capacity Date commissionedBurkina Faso Zagtouli 1 Public 33 MW 2017Burkina Faso Ziga Public 1.1 MW 2017Niger Malbaza Public 7 MW 2018Senegal CICAD Public 2 MW 2014Senegal Senergy II (Dagana, Bokhol) IPP 20 MW 2016Senegal Malicounda IPP 22 MW 2016Senegal Senergy (Santhiou, Mekhe) IPP 30 MW 2017Senegal Ten Merina / Cheikh Anta Diop IPP 30 MW 2017Senegal Sakal (Barale Ndiaye, Louga) IPP 20 MW 2018Senegal Energy ressources (Kahone) IPP 20 MW 2018

TOTAL 185 MW

Table 1

SOLAR POWER PLANTS IN OPERATION AS AT END 2018

Source : CPCS, 2iE research



1.2. THE AMBIVALENT INTEREST OF OFF-GRID SOLAR APPLICATIONS

Given the high cost of expanding existing networks,decentralized systems have been developed to ensurethat people in rural areas have access to electricity.These systems are based on rapid deployment of solarenergy for accelerated energy inclusion.

Several solutions are now available on the market, frommini-solar lamps to autonomous solar installations ofseveral kilowatts. These solutions are based on lower

solar panel costs, technological advances in battery per-formance and longevity, the development of energy-ef-ficient electrical devices and the development ofappropriate marketing and payment solutions (mobilemoney and pay-as-you-go model). For example, solarkits distributed according to the pay-as-you-go modelmake a significant contribution to increasing access toelectricity for disadvantaged populations, particularly inSenegal, Burkina Faso, Côte d'Ivoire and Mali.

Country Sale of autonomous solar systems in the first half of 2018 (units)Benin 5 700Burkina Faso 23 000Côte d'Ivoire 17 000Mali 16 000Niger 4 000Senegal 31 000Togo 4 500

Table 3

SALE OF AUTONOMOUS SOLAR SYSTEMS IN THE FIRST HALF OF 2018 (UNITS

Source : CPCS

However, one of the major challenges is to be able todefine a balanced regulation that is strict enough toprotect consumers from bad practices, flexible enoughnot to stifle market dynamics, and flexible enough toadapt to future innovations.

In Senegal, mini-grids are governed by the same legaland regulatory framework as large operators. They arerequired to sign a distribution concession contract withthe Ministry of Energy and obtain a license to sell power.

Benin, on the other hand, adopted on 3 October 2018a "decree regulating off-grid electrification". Accor-ding to this text, only mini-grids over 500 kVA willhave to obtain a concession, smaller systems requiringonly a simple authorization.

Although off-grid solar energy is capable of improvingpeople's living conditions, it is not competitive for low-power uses, such as engines. The productive use ofelectricity - crafts, conservation or processing of agricul-tural products, carpentry, welding, etc. - is thus limitedin localities that only have off-grid systems or mini-net-works. Off-grid therefore generally does not allow theemergence of income-generating activities, whichwould stimulate a dynamic of economic development.

Solar, photovoltaic or thermal energy has many otherautonomous applications: solar ovens, solar dryers,cold production, industrial heat production, etc. Howe-ver, the most convincing and relevant applications inthe context of WAEMU countries are in public lighting,solar pumping and solar hot water.



The solar energy market in WAEMU faces two majordifficulties related to the qualification of the workforceand the quality of equipment on the market.

A study10 commissioned by SNV (Dutch Cooperation)in Burkina Faso found a failure rate of 71%, especiallyon domestic installations. The same study found thatthere is a link between qualification and quality of fa-cilities. We are therefore faced with a challenge bothin terms of the qualification of technicians and thequality of equipment.

To address these challenges, it is important to providethe WAEMU region with good expertise and a skilledworkforce, by promoting technology and skills transfers.

There should also be market regulation through appro-priate regulation (certification of installers) and the es-tablishment of quality control systems.

Ultimately, training opportunities in solar energy shouldbe strengthened and diversified. Admittedly, there arealready some qualifying or diploma training modulesof various kinds, but serious challenges lie in providingadequate equipment for training centres (educationallaboratories, etc.). There are also concerns about thetraining of trainers, the need to strengthen the synergyof actions between the various institutions involved intraining, as well as the development of relevant standards that meet the needs.

10 Study on the link between the qualification and quality of renewable energy services in Burkina Faso, SNV, CEAS Burkina, OCADES, AGEREF, March 2018

1.3. TECHNICAL CAPACITY AND TRAINING

About 90% of solar module production takes placein Asia, with China accounting for 66% of the total.Europe holds 6% of the market, while the UnitedStates holds 2%. In Africa, local manufacturing ca-pacity remains limited, but several plants have beenestablished in recent years in Kenya, Senegal, Ghana,Burkina Faso and South Africa.

Local and regional demand is expected to have a si-gnificant impact on plant profitability, while conditio-ning any economies of scale necessary for theproduction of competitively priced solar modules.

While it is difficult to compete with China, several as-sembly plants in Africa have focused on the qualityof their products and enjoy the preference of somebuyers for modules made by local companies.

1.4. LOCAL MANUFACTURING OF SOLAR EQUIPMENT



MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU

2

“Institutional, regulatory, legal, technical and financial impediments will have to beovercome in order to maintain the momentum towards a real take-off of solar energy

in the WAEMU countries.”

Installation of solar panels.



Several hurdles will have to be overcome in orderto maintain the momentum and achieve a real take-off of solar energy in the WAEMU countries. These

obstacles are institutional, regulatory, legal, techni-cal (or related to the very nature of solar energy)and financial.

The lack of coordination between the various institu-tional players and a lack of precision in defining therole of each, make it difficult to implement private pro-jects that are also confronted with a lack of experiencein the field of solar technology. This often explains thedelays in the examination of applications and the verylong development times of large projects.

The lack of institutional framework for projects is alsoone of the most important impediments. There is no

coordination of the work of the various stakeholders(ministries, regulators, etc.). In addition, negotiationsand decisions generally take time: it takes on averageseven (7) years to develop a solar IPP project. For exam-ple, projects in Senegal began their development in2008-2009, in Burkina Faso around 2009-2010, in Maliin 2012. These development times, which are too long,explain the high rates of return expected from investorsas well as the high development costs of projects.

The development of solar energy potential is constrai-ned by the way the electricity sector is structured. InWest Africa, the top-down integrated monopolymodel has long been the norm. However, a certainopenness has been observed since the late 1990s,with the emergence, alongside the top-down integra-ted monopoly of the independent production modelwith a single buyer. For the former, only one company,usually state-owned, has the right to generate, trans-mit and sell power. With this type of organization, only

public projects led by the national electricity companycan see the light of day.

With the recent model independent power productionis allowed, but only the national company can pur-chase the power generated.

The table below presents the different organizationalmodels of the power sector in the WAEMU region.

2.1. LACK OF INSTITUTIONAL ORGANIZATION

Country Type of organizationBurkina Faso Vertically integrated public monopolyGuinée Bissau

Niger Independent Power Producer (IPP) + Single Buyer in charge of power generation, transmission and distribution. Unregulated market

Côte d'Ivoire Mali IPP + Single buyer in charge of power generation, transmission and distribution. Regulated marketSenegal Togo PP + Single buyer in charge of power generation, transmission and wholesaleBenin

Table 4

STRUCTURE OF THE POWER SECTOR IN WAEMU

Source : ERERA 2017



In recent years, there has been significant progress inregulation, with the introduction of independentpower generation. Nevertheless, it is still imperfect.

There is a lack of clarity in the way over-the-coun-ter (OTC) contracts are awarded, leading to contrac-tual complications. OTC transactions remain the mostwidely used mode of transaction in the WAEMU region,while legislation prohibits bilateral negotiations bet-ween private developers and governments. The sameapplies to the community directives on public procure-ment procedures, which recommend calls for tenders.

However, national regulations allow OTC contracts forspecific cases (emergency concepts, pilot project, tech-nical requirements, etc.); these cases often do not applyto renewable energies. In the case of over-the-countertransactions, the terms and conditions must be descri-bed in decrees which, unfortunately, are not alwaysavailable. This leads to many delays and additional costsfor independent power generation projects.

2.2. LEGAL AND REGULATORY UNCERTAINTIES

Definition of legal, regulatory and institutional frameworks

Laws are enacted to define the main parameters of the sectoral organization.

The legal framework (i) specifieswhich entities are authorized toproduce electricity, and how, (ii) lays down the principles of pos-sible support or incentive measuresfor solar energy production and (iii)defines the role of sectoral institu-tions (ministry, regulator, etc.).

The regulatory framework specifies(i) the conditions for obtaining thepermits, licences, authorizations,approvals and contracts for theproduction of renewable energy, (ii) any financial support measuresfor renewable energy (e. g. invest-ment subsidies or preferential feed-in tariffs) and (iii) the procedures foraccess and connection to the gridfor renewable energy projects, (iv)the technical parameters to be metfor injecting renewable electricityinto the national grid, generallyunder the network code.

The frequent discrepancy betweena principle laid down by law and its

translation into regulation is an obs-tacle to the development of solarprojects.

The institutional framework variesfrom one country to another, depen-ding on national political and secto-ral choices. As a general rule, thefollowing stakeholders are present inmost WAEMU countries: the Minis-try of Energy, the National ElectricityCompany, the Regulatory Authority,the Rural Electrification Agency andthe Renewable Energy Agency.Other actors include the Ministry ofFinance (tax incentives, paymentguarantees, subsidies, compensa-tion), the Ministry of the Environ-ment (permits and authorizations),the Investment Promotion Agency(investor support), the StandardsAgency (definition of norms andstandards for solar equipment). Hereagain, there may be a gap betweenthe mandates of these different ins-titutions as laid down by law or bytheir statutes, and actual practice.

Thus, at the institutional level, ex-perience shows that the main chal-lenges for a private solar projectdeveloper include:

• good coordination of the actionsof institutional actors and clarityin the definition of their roles. Thisproblem can be solved by settingup a single window, which be-comes the project developer'ssole point of contact, and thencoordinates the procedures of theinstitutional actors involved;

• strengthening the capacities andhuman resources of the variousinstitutions in order to reduce de-lays in the processing of requests;

• reinforcement of solar-specific ex-perience of institutional players.The first solar projects often paythe price of institutional learning.

INSERT 1



For off-grid solar energy, certain features of the legaland regulatory framework now represent obstacles tothe full development of the market. Indeed, someWAEMU countries (Senegal) treat mini-grids in thesame legal and regulatory way as large operators. Thislack of flexibility threatens to stifle the dynamics of theoff-grid solar market.

The relaxation of the regulatory framework for pri-vate mini-grids, a finer targeting of subsidies for ruralelectrification, and the generalization of tax and cus-toms incentives could help to accelerate the progressof off-grid solar energy.

• Saturation of the power grid

Solar power plants are heavily dependent on sunlightand generate electricity during the day, while it is inthe evening, at nightfall, that demand is highest. Solarpower production can also vary rapidly depending onthe weather: when the sky gets cloudy, other meansof power generation must be mobilized to compen-sate for drop in solar power generation. The limits ob-served are therefore both on the generation side andon the transmission and distribution side.

The increase in the share of solar energy in the energymix of WAEMU countries is hampered by the frequentgrid saturation. Indeed, WAEMU networks are fragileand small, and often already saturated. Studies carriedout on the grids point to the need to strengthen thetransmission lines in order to achieve the objectives setby the Union in terms of the energy mix. Thus, whilesolar can provide the answer to the energy demand,

the achievement of the objectives will remain constrai-ned by the constraints of power transmission from thepower producer to the consumer.

• Solar energy storage constraints

Given the intermittent nature of solar power genera-tion, its integration into the grid requires the additionof storage batteries. The electricity produced duringthe day can thus be consumed at night. The challengefacing the WAEMU countries is how to manage thisintermittency, particularly by procuring reliable batte-ries that are suited to the climatic conditions of thearea. In Senegal, for example, solutions are being de-ployed. The addition of storage batteries of severaltens of megawatts is being considered to solve the in-termittency of solar power generation, while the dis-patching centre plans to equip itself with weatherforecasting and control-command tools to manageweather hazards.

2.3. CONSIDERABLE TECHNICAL CONSTRAINTS



Factors that hinder the participation of commercialbanks include: (i) the risky profile of entrepreneurs,combined with the lack of a mechanism to guaranteecredit to SMEs and start-ups, (ii) the generally highcost of financing for operators, (iii) the lack of long-term resources for financing solar energy projects (10 to 20 years).

Indeed, one of the greatest risks in the developmentof grid-connected solar projects in sub-SaharanAfrica is the buyer's risk of non-payment, particularlyif the buyer is a national electricity company withoutdeep pockets. For their part, while SMEs and start-ups active in off-grid solar energy (solar kits and lan-terns) represent an opportunity for commercial banksto intervene, such ventures remain quite risky. Also,banks and investors require the establishment of se-curities and financial guarantees to cover (i) defaultsby the operator and (ii) the termination clause.

Although countries have similar profiles, it is surpri-sing to see the diversity of financial structuring. Fur-thermore, governments are often not prepared forthe implementation of these guarantees, so negotia-tions are often very lengthy, leading to delays and hi-gher costs per kWh. Several mechanisms can be usedto mitigate risk and thus reduce the cost of financing:

- sovereign guarantees to secure payments (Senegalhas set up such guarantees for all IPPs);

- partial risk guarantees from development financeinstitutions (DFIs);

- political risk insurance by institutions such as MIGA,EIB, African Trade Insurance Agency (ACA) andOverseas Private Investment Corporation (OPIC).

The participation of DFIs, which provide concessionalfinancing (or grants) and credibility to projects, is veryuseful to keep the cost of financing down.

2.4. DIFFICULTIES FOR OPERATORS TO ACCESS FINANCING



PRIVATE INVESTMENTAND PRODUCTION roles of the private sector andgovernment

3

“The advent of solar energy as a clean and competitive source of energy has coincidedwith a broad movement towards liberalization of the electricity sector and increased private

sector participation in infrastructure development.”

Solar panel installation site.



The advent of solar energy as a clean and competitivesource of energy has coincided with a broad move-ment towards liberalization of the electricity sector andincreased participation of the private sector in infra-structure development.

In fact, most of the solar capacity installed in the areahas been developed by independent power producers.They are granted long-term (15-20 years) concessionsand power purchase agreements (PPAs11). Thesecontracts are concluded respectively with governmentsand national electricity companies, which are generallysingle buyers (or mining and industrial companies) andoften have payment guarantees (sovereign guaranteesand escrow accounts).

In the WAEMU region, the first IPP was launched inCôte d'Ivoire with the construction of the Vridi thermalpower plant, but it was in Senegal in 2016 that thefirst solar IPP appeared as part of the construction ofthe Bokhol power plant, with a capacity of 20 MW.Since then, many power plants have developed in theform of IPP.

In Côte d'Ivoire, a 37.5 MW solar power plant projectin the northern town of Boundiali was announced in2018. In Mali, the Kita IPP (50MW) co-financed byBOAD just reached financial closing in October 2018.

Public authorities in the WAEMU region have playeda vital role in the take-off of solar energy projects, inparticular by defining the organizational arrange-ments for the electricity sector and setting up instru-ments to support solar energy (subsidies, tax orcustoms facilities, sovereign guarantees, etc.). The or-ganizational arrangements are generally laid downby legal and regulatory texts and have an impact onthe development of the sector. Several modalitiesexist, but the most dominant type in the WAEMU re-gion is the type that allows for independent powergeneration and sale to a single buyer who has a mo-nopoly on transmission and distribution (usually thenational electricity company).

In Senegal, discussions are underway to establish anorganizational model for the sector based on thirdparty access to the grid. This model will end SENELEC'smonopoly as sole buyer. It is intended to foster theemergence of entirely private initiative projects, whichwill sell their power, not to SENELEC, but directly toprivate, industrial or large consumer buyers. Theoreti-cally scheduled for 2019, the implementation of thismodel could be delayed for a few years due to the lackof a specific regulatory framework.

3.1. IPPs IN WAEMU

11 A power purchase agreement defines the price at which the electricity will be sold, possibly with price revision clauses.

The development of renewable energies in West Africahas fostered the emergence of a real solar energy eco-nomy, with a growing number of companies operatingin this sector. In addition to limited liability companiesand public limited companies, the OHADA UniformAct offers the opportunity to create simplified jointstock companies, which should contribute to the de-velopment of start-ups in the field of renewable ener-gies, this form of organization better meeting the

expectations of start-ups in terms of flexibility andcontractual freedom.

Benin and Senegal seem to be the countries with a vi-brant renewable energy companies. These countries arefollowed by Côte d'Ivoire, Burkina Faso, Togo, Mali andGuinea Bissau. The SMEs and start-ups thus createdpromote the development and diversification of jobs,as well as innovation and value creation (see insert 2).

3.2. ENTREPRENEURSHIP IN SOLAR ENERGY



One hundred and twenty-three(123) applications were received.The initiatives cover several forms ofrenewable energy: biogas, biofuels,wind energy and solar photovoltaicenergy.

The selection process was conduc-ted by the CPCS-2iE consortium.Two outstanding proposals by pro-ject developers were identified, anevidence of the great innovative po-tential in the WAEMU region.

In order to guarantee impartialityand ensure a cross-review of the re-view of the proposals, two (2) diffe-rent panels sat at each of the threestages of the process.

The two (2) applications selected atthe end of the process were: (i) the"KYA-SoP Solar Power Units" projectand the "Solar Modernization andDigitization of Peasant Agriculture:Smart Solar Water Pump and DigitalTraining and Marketing Platform forSub-Saharan Africa" project.

The KYA-Energy Group's "KYA-SoP Solar Power Units" projectproposes to move from the expen-sive, centralized system of powersupply, to a much more affordable,decentralized system (individual or

community) using standardized hy-brid mobile cabinets, through KYA-SoP® solar power units. KYA-SoP®solar power units are likely to posi-tion themselves in the market foraccess to energy services, such ashigh value-added solar products,which can have a significant impacton people's lives.

Designed, assembled and marketedby KYA-Energy Group, a young To-golese company with a sub-regionaloutlook, created in July 2015 andbased in Lomé (Togo), KYA-SoPsolar power units are standardizedinto (6) ranges, including three (3)for households, with powers ran-ging from 1kVA to 5kVA, and threeother ranges for SME/SMI, with po-wers ranging from 5kW to 10kW.

The aim of the project promoter isto move towards semi-industrializa-tion of the KYASoPs, by setting upa local assembly line, with the capa-city to produce 1000 KYA-SoP unitsin the first year. Through this pro-ject, more than 150 direct jobs andseveral dozen indirect jobs will becreated. More than 30,000 house-holds would have access to electri-city in less than five (5) years ofproduction. The project will alsoprevent, over the first five years, the

emission of 3,429 tonnes Eq-CO2,the equivalent of 136,000 treesplanted.

The project on "Solar moderniza-tion and digitalization of peasantagriculture: intelligent solar waterpump and digital training and mar-keting platform for sub-SaharanAfrica" is proposed by Nadji Bi Se-negal, a start-up specializing in thedevelopment and production inAfrica of lighting systems and pro-duction tools based on solar energy,for the rural economy. Nadji.Bi Se-negal proposes the development ofan intelligent and connected solarpump solution, supported by An-droid software for online marketingmanagement.

The promoters' objective is toboost the development of the ruraleconomy in sub-Saharan Africathrough an integrated and innova-tive solution. This should allow anefficient use of water resources,through solar energy. It would si-gnificantly increase agriculturalyields, while promoting efficientmarketing of production, througha multiservice digital platformadapted to informal structures.

INSERT 2

The BOAD Competition for start-ups in WAEMU with the most innovative renewable energy project, particularlysolar, was to encourage innovation and enhance the skills of local African developers.

Award-winning innovative start-ups at BOAD’s 45th anniversary forum

In addition, the challenges to be addressed in thecontext of promoting SMEs and start-ups include: (i) strengthening seed, innovation and venture capitalfunds adapted to start-ups, (ii) strengthening support

structures and training centres for renewable energy,(iii) regulating the solar market (creating a quality reference for solar products and business certification).



INSERT 3

The development of solar projectsin Africa can take 2 to 8 years (fea-sibility studies, negotiation of pur-chase contracts). Developersgenerally finance early stages of de-velopment with their own funds,thus assuming a higher level of risk.As a result, they require a higher re-turn on investment. Some develo-pers enter the pre-constructionstage to help finance construction.Others wait until construction iscompleted to buy the project, allo-wing the initial developers to exitthe project. Lenders are involved ata later stage of the process, wherefinancial flows are more certain.

When the solar project is operatio-nal, it becomes less risky at thisstage. The developer can thereforerefinance his debt by renegotiatingthe terms, so as to obtain a morefavorable loan rate.

According to the International Re-newable Energy Agency (IRENA),between 2013 and 2017, projectdevelopers contributed on average40% of global private investmentin renewable energy. These invest-ments are attributable to develo-pers in China, Japan, the UnitedKingdom and the United States. In2016, the 15 largest internationalsolar developers accounted for26.4 GW of installed capacity andmore than 40 GW is expected. In2015, the five largest international

developers (criteria based on instal-led capacity or under development)were: GCL New Energy, First Solar,Canadian Solar, Total (SunPowerand Eren), and SunEdison.

Most of their investments are in es-tablished markets such as the Uni-ted States and Japan. Butinternational developers are also in-terested in large commercial pro-jects in emerging economies. LatinAmerica, the Middle East, NorthAfrica and sub-Saharan Africa ac-counted for 12% of operationalprojects and 28% of renewableenergy development projects.

Many international developers ope-rate in Africa: Berkeley Energy, Bio-therm Energy, EDF, Enel GreenPower, Engie, Gigawatt Global,Greenwish Partners, JCM, LekelaPower, Neoen, ResponAbility, Scatec Solar, SolarReserve.

Partnerships between internationaland local developers are frequent.They enable international develo-pers to acquire local market know-ledge and share risk.

Investment funds worldwide remaina minor player in renewable energy.They accounted for about 2% oftotal investments between 2013 and2017. In sub-Saharan Africa, theparticipation of mainstream invest-ment funds in solar power projects

is still low due to the high risk profileof these projects.

However, some specialized fundshave chosen to focus on infrastruc-ture, energy and renewable energy,with a particular focus on sub-Sa-haran Africa. These funds often in-vest alongside development banksand developers, and take advan-tage of mechanisms such as grantsand guarantees.

Specialized funds, active in develo-ping solar projects in sub-SaharanAfrica, and seeking opportunitiesand better returns on investment,include: Meridiam, IFC Infraventures(IFC's global infrastructure develop-ment fund), Access Infra Africa,Africa Infrastructure Investment Managers (AIIM), Emerging AfricaInfrastructure Fund, Helios PrivateEquity, Africa50, Norfund, and the Sovereign Fund for Strategic Investments (FONSIS) in Senegal.

In the WAEMU region, more andmore funds are being created. So-metimes existing funds also reducetheir tickets in order to reach start-ups. This for instance is the case ofSINERGI in Niger and Burkina Faso,Teranga Capital in Senegal, InitiativeOuagadougou in Burkina Faso, theAfric'Innov Start-Up Fund, on pilotand operational phases in BurkinaFaso, Niger, Senegal and Guineaand, in Benin, of Partech Africa.

The financing of private solar projects is characterized by a significant initial investment, with a stable return overa long period (15 to 25 years). The financing structure is generally made up of equity (25-30%) and debt (70-75%). The equity12 comes from developers and investment funds, while debt comes from commercial or development banks. Equity and debt are invested or lent through a special purpose vehicle (SPV)

Developers and special investment funds

12 Amounts invested by an investor in exchange for shares in the project company.



PROSPECTS FOR SOLARIN THE WAEMU REGION 4

The WAEMU countries face several regulatory, institutional and financial challenges and constraints in spite of their huge

solar energy potential.

Winners of BOAD’s photo andstart-up contests.



Pays BENIN BURKINA CÔTE GUINEA MALI NIGER SENEGAL TOGO FASO D’IVOIRE BISSAU

Significant solar resource H H H H H H H H H H H H

Potential for rapid increase H H H H H H H H H H H H H Hin demandEnabling environment for private sector participation H H H H - H H - H H Hin power generationCompetitiveness of solar energy compared to other available H H H H H H H H H H H H Hpower sources

Table 5

STRENGTHS AND WEAKNESSES OF WAEMU COUNTRIES IN SOLAR ENERGY DEVELOPMENT

Source : CPCS

Strengths ( HH : High, H : Moderate, - : Absent)

Lack of experience in private participation in power generation ## ## - ## # ## - #Lack of experience with solar technology, especially ## - # - # ## - ##for large projects Small size of the power grid ## ## - ## # ## - ##Financial constraints of the national electricity company # # - ## ## ## - #Political instability and/or generally unfavorable business environment - - - ## - ## - -

Weaknesses ( ## : High, # : Moderate, - : Absent)

Several actors have initiated projects or programs tosupport solar energy. It is desirable that, in theWAEMU area, future actions should, as far as possible,be coordinated with existing ones. The most importantof these initiatives, which have real hopes for the vir-tuous development of solar energy in the area, aresummarized below:

• BOAD: while it is increasing its investment and in-volvement is this area, has already invested XOF 84billion. It intends to place particular emphasis on theimplementation of the recommendations of the November 2018 forum.

• The "New Deal" initiative for energy in Africa:this initiative is scheduled for 2015-2025, and is ledby the African Development Bank (AfDB). It aims topromote universal access to energy on the Africancontinent by 2025. The promoters of the pro-gramme intend to mobilize private capital, throughinnovative financing mechanisms and promotingPublic-Private Partnerships.

• The Sustainable Energy Fund for Africa (SEFA): itsupports small and medium-sized renewable energyand energy efficiency projects in Africa. This multi-donor trust fund (Denmark, United States, Italy and

4.1. INITIATIVES TO PROMOTE SOLAR



United Kingdom), administered by the AfDB, ad-dresses the difficulty of accessing financing for the ini-tial development of small renewable energy projects.

• The Lighting Africa programme: it is part of theWorld Bank Group's contribution to SustainableEnergy for All (SEforAll). It is implemented in part-nership with the Energy Sector Management Assis-tance Programme (ESMAP), the Global EnvironmentFacility (GEF) and 16 Governments. This initiativeaims to provide more than 250 million people in sub-Saharan Africa, living without electricity, with accessto clean, affordable and quality lighting by 2030through clean off-grid systems.

• The Scaling Solar Initiative: this initiative brings to-gether a range of services from the World BankGroup, as part of a unique commitment to createviable markets for solar energy in each client country.The programme aims to make grid-connected, pri-vately financed solar projects operational within twoyears at competitive rates.

• The ROGEP (Regional Off-Grid ElectrificationProject): it is promoted by ECREEE and the WorldBank. It aims to promote access to basic electrifica-tion services for households, micro and small busi-nesses, schools and health centres in 19 countries13

in West and Central Africa. The project ecosystem isbuilt on private actors. Indeed, private companies,specialized in solar energy and approved, will be ableto benefit from financing to acquire equipment andoffer tailor-made solutions to end users. Financingwill be provided to companies or end users by localbanks in the project area. In this context, BOAD wasselected to act as a financial intermediary betweenthe World Bank and local banks, which would haveto finance service delivery companies.

• The Energy Sector Management Assistance Pro-gramme (ESMAP): this programme is a partnershipbetween the World Bank Group and 18 other sta-keholders. It aims to help low- and middle-income

countries reduce poverty and stimulate growththrough environmentally friendly energy solutions.

• The African Renewable Energy Initiative (AREI):it aims to promote the installation of large-scale re-newable energy capacity on the African continentby 2020. This would have a significant impact on re-ducing the continent's greenhouse gas emissions.This initiative is led by the African Union Commis-sion, the New Partnership for Africa's DevelopmentAgency (NEPAD), the African Negotiators Group, theAfrican Development Bank, the United Nations En-vironment Programme (UNEP), and the InternationalRenewable Energy Agency (IRENA).

• The International Solar Alliance (ISA): it is basedon a desire to combine the efforts of developingcountries to attract investment and technology inthis sector and to develop the use of solar energy incountries between the Tropics of Cancer and Capri-corn. A stated objective is to install 1,000 GW ofsolar power and invest 1,000 billion dollars in thissector by 2030.

• WAPP: it is a major player in the integration of powergrids and the development of renewable capacities.

There are also many climate funds that offer conces-sional financing or grants for the implementation ofsolar projects in sub-Saharan Africa. Some of thesefunds include the Climate Investment Fund, the GreenClimate Fund, the IRENA/ADFD Project Facility, theECOWAS Renewable Energy Facility, the Global Envi-ronment Facility. Most of these stakeholders were pre-sent at the Bank's 45th anniversary forum.

Furthermore, green bonds, which are one of the finan-cing solutions for climate and environment-related in-vestments (i.e. solar energy), have recently beenintroduced in Africa and the World Bank supportsCREPMF in the implementation of green bond regula-tion in WAEMU. These new instruments will help toease financing constraints and investor mistrust.

13 Benin, Burkina Faso, Chad, Central African Republic, Cameroon, Côte d'Ivoire, Cape Verde, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania, Nigeria, Niger, Senegal,Sierra Leone, and Togo.



• Continue to implement an appropriate framework

Most countries in the region have established, or are inthe process of establishing, a legal framework that pro-motes the emergence of IPP projects in solar energy. Ho-wever, legislation alone is not enough. Implementingregulations are also needed, as well as the various regu-lations governing practice. It is therefore necessary tostrengthen the capacities of government agencies in thedevelopment of energy policies and the operationaliza-tion of implementing decrees, as well as in the area oflegal and financial arrangements for projects.

Apart from the legal and regulatory framework, the ins-titutional framework may also require adjustments, whe-ther in terms of defining the mandates of the institutionsinvolved in solar energy, facilitating coordination, or capacity building.

• Making private investment less riskyThe initial stages of project development are also themost risky for a private investor, especially in poorly de-veloped markets where experience with solar projects isstill limited or non-existent. Public sector operators canhelp to reduce this risk, particularly by: (i) financing ups-tream studies (identification of sites, analysis of theirsolar potential); (ii) facilitating procedures for obtainingthe required permits and licences; (iii) managing proce-dures for land acquisition and compensation of affectedpersons; and (iv) using standard power purchase agree-ments, known in advance.

There is also the need to establish sovereign guaranteesto mitigate the risk of non-payment by national electri-city companies. For example, the government may offera guarantee to investors in a solar power plant in theevent that the national electricity company is no longerable to honor payments for the production of solarenergy. The earlier these guarantees are put in place,and the earlier the terms are known in advance, themore likely it is that the project will be developed quickly.

• Strengthening power transmission infrastructure at national and regional level

The power systems in the WAEMU countries are verysmall. Some national grids are unstable or obsolete.This means that the intermittent renewable energy ab-sorption capacity can be saturated with a single 20 or30 MW solar power plant. This could significantly reduce the attractiveness for international investors.

The strengthening of transport infrastructure will re-move this obstacle. This will be achieved through severalactions, including: (i) interconnections between neigh-boring countries; (ii) improvements to national dispat-ching centres and regional harmonization ofdispatching procedures; and (iii) the addition of storagecapacity connected to solar plants or located at keypoints in the grid. WAPP is the main regional organiza-tion for strengthening regional transport infrastructure.

• Focus on capacity building Local capacity building is essential to accelerate the de-velopment of solar energy. Public authorities could, onthe basis of analyses of the needs of the environment,develop standards to ensure the availability of relevanttraining. This training effort should be continuous, to en-able the various actors (technicians, consumers, institu-tions, etc.) to keep up with the latest technologies.

As innovation is still necessary to take full advantage ofthis solar resource in the WAEMU region, the creationof laboratories with state-of-the-art research equipment,as well as specialized test equipment, is required.

Sharing experience at the regional level will also contri-bute to capacity building. Less advanced countries interms of solar energy could benefit from sharing expe-rience with more advanced neighboring countries (visitsto solar power plants, sharing of standard contractualdocuments, etc.).

Multilateral development banks and development fi-nance institutions, in co-financing projects with com-mercial banks, could also contribute to the capacitybuilding of these local banks, in terms of understandingthe characteristics of solar energy projects and assessingthe risks inherent to them.

4.2. SOME RECOMMENDATIONS AND IDEAS FOR REFLECTION


LIST OF ANNEXES

ANNEX 1 : Presentation on BOAD and its organization chart as at 31/12/2018

ANNEX 2 : BOAD's governing bodies as at 31/12/2018

ANNEX 3 : Key actions of BOAD's governing bodies in 2018

ANNEX 4 : List of financing approved by BOAD in 2018

ANNEX 5 : Profile of projects financed in 2018

ANNEX 6 : List of loan agreements/contracts, bond guarantees, equityinvestments, arrangements and loans signed in 2018

ANNEX 7 : List of regional projects financed by the Bank

ANNEX 8 : Evolution of net inflows by country as at 31/12/2018

ANNEX 9 : Breakdown of cumulative net commitments as at 31/12/2018

ANNEX 10 : Breakdown of cumulative net disbursements as at 31/12/2018

ANNEX 11 : Governance of BOAD

ANNEX 12 : BOAD staff by category, gender, process and activity as at31/12/2018

ANNEX 13 : Financial position of the Bank as at 31/12/2018

ANNEX 14 : Key macroeconomic indicators of WAEMU

ANNEXESwww.rapportannuel2018-boad.org

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