Côte d’Ivoire’s Innovative Debt Swap to Boost Education
Deal News | Dec 05, 2024 | World Bank Carbon Finance Unit
The World Bank Group is facilitating a debt-for-development swap in Côte d’Ivoire, enabling the country to improve its debt profile and redirect fiscal savings towards education enhancement. Through this initiative, Côte d’Ivoire will target $400 million of high-interest commercial debt due to mature in the near future. With the aide of a World Bank guarantee, the country will refinance this debt at a lower cost, expected to free up $330 million over the next five years. The swap is anticipated to yield at least $60 million in lifetime savings in net present value terms. Prime Minister Robert Beugré Mambé articulated the aim to not only address debt issues but also reinvest in human capital and sustainable development. The efforts align with the education-specific ambitions backed by World Bank’s financing instruments and form part of a broader investment package, fostering health and education access and optimizing natural resource use.
Sectors
- Finance
- Education
- Sustainability
- International Development
Geography
- Côte d’Ivoire – The primary focus of the article is on Côte d’Ivoire's debt management and educational investments.
- Global – The World Bank operates internationally, and the article discusses potential replication of the debt-for-development swap in other countries.
Industry
- Finance – The article discusses a debt-for-development swap, which involves financial instruments and refinancing strategies to improve a nation's economic conditions.
- Education – The saved resources from the debt swap are dedicated to enhancing education within Côte d’Ivoire, highlighting the article’s focus on human capital investment.
- Sustainability – The transaction involves sustainability-linked loans and supports environmentally and socially responsible investments.
- International Development – The involvement of the World Bank indicates a connection to global development initiatives, aiming at improving living conditions in developing countries.
Financials
- 400 million – Targeted amount of Côte d’Ivoire’s expensive commercial debt for the swap.
- 330 million – Estimated budget resources freed up over five years due to the debt swap.
- 60 million – Projected lifetime savings in net present value terms from the debt swap.
- 500 million – Total guarantee amount from the World Bank, with half facilitating the debt swap and the remainder enabling a Sustainability-Linked Loan.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Côte d’Ivoire | Target | Country | The country involved in the debt-for-development swap to enhance its education sector. |
| World Bank Group | Bidding Company | Institution | Providing the guarantee that facilitates the debt swap, enabling educational investments. |
| Robert Beugré Mambé | Prime Minister | Person | Prime Minister of Côte d’Ivoire, promoting fiscal consolidation and sustainable investment strategies. |
| Anna Bjerde | Managing Director of Operations | Person | Managing Director of Operations at the World Bank, overseeing initiatives like the debt swap in Côte d’Ivoire. |