ACA conducts an information campaign on political risk and commercial risk insurance in Togo

( ACA ) – In order to inform state entities and the private sector on the insurance of political risks linked to investments and credit risk in Togo, the ACA organized together with the Ministry of Economy and Finances du Togo, the European Investment Bank (EIB) and the KfW Development Bank (KfW) a series of outreach activities in Lomé. The country stands to benefit more from ATI’s underwriting capacity which will help mitigate the political risks and trade credit risks that the country’s exporters, suppliers, lenders and investors are currently exposed to – key players will understand the value added ACA insurance products.

Togo became a member state of ATI in 2020, with an initial participation of 12.5MUSD, thanks to a concessional loan granted by the EIB. In 2021, KfW granted additional financing of USD 22.6 million to increase Togo’s share in the capital of ACA and thus becomes the largest sovereign shareholder, with a participation of USD 35.2 million, i.e. 6.7% in the ACA. Two years after its accession and following the effects of the COVID-19 pandemic which interrupted the dynamic performance of the country, Togo benefited from the underwriting capacity of approximately FCFA 176.9 billion (305MUSD) having covered the sectors finance, transport, road infrastructure.

The Togolese government and commercial banks remain ACA’s main clients, their transactions representing nearly 350MUSD. For example, ATI supported the Togolese government in a blended finance transaction, with the country securing a 10-year quasi-concessional loan to reprofile and refinance some of its costliest short-term public debt. . Togo was able to use the ATI financial guarantee to structure the debt, which enabled it to obtain a low interest rate (low single digit).

Togo’s Economic Freedom is ranked 15and rank in sub-Saharan Africa and the country continues to represent an attractive economy in Africa. The government continues to participate in high-level forums to promote trade and investment opportunities in order to implement its National Development Plan (PND 2022), which aims not only to develop innovative and sustainable solutions, but also to identify financing resources as well as to attract more investments with a strong socio-economic impact and to consolidate its strategic positioning.

ATI intends to support 100% the Togolese government in its electrification project by 2030, in order to achieve SDG 7, through its Regional Liquidity Support Facility (RLSF). RLSF, a joint initiative of ACA, KfW and the Norwegian Agency for Development Cooperation (NORAD). It is a guarantee instrument aimed at underwriting the short-term liquidity risks faced by Independent Renewable Power Producers (IPPs) selling electricity to utilities in Sub-Saharan Africa. ACA is working with the Togolese Ministry of Mines and Energy to sign a Memorandum of Understanding for the implementation of the RLSF in Togo.

To date, seven of the ATI Member States have signed the MoU and are eligible to benefit from this facility. Benin, Burundi, Ivory Coast, Madagascar, Malawi, Uganda and Zambia, and we hope for the signature of the other member countries.

For Sani YAYA, Minister of Economy and Finance of Togo: “ The presence of the ACA in Lomé this week is the result of a long membership process which was made possible thanks to the firm commitment of HE Faure Gnassingbé, President of the Republic, to make Togo an attractive destination for investors and international companies. I therefore welcome this important initiative aimed at raising awareness of ACA’s operations in Togo, the objective of which is to popularize the unique and innovative insurance products and guarantees available to the Togolese economy.

ACA seeks to collaborate and assist Togo in strengthening its competitiveness. I therefore encourage companies and investors to turn to ACA for their risk mitigation solutions. It is important to remember that the ACA is not in competition with local insurance companies, because the risks covered by the ACA are excluded from the coverage of local insurers. On the contrary, we are helping to improve the business climate in Togo by establishing partnerships with the public and private sectors, and by developing a sustainable reinsurance capacity for the country’s insurance companies in order to stimulate economic development in Togo and beyond. said Mr. Manuel Moses, CEO of the ACA.

About the African Trade Insurance Agency

ATI was created in 2001 by African States to cover the credit and investment risks of companies doing business in Africa. ATI mainly offers political risk insurance, credit insurance and reinsurance. At the end of fiscal 2020, ATI had gross exposure of $6.3m and net profit of $39.4m, with this performance driven by strong demand for ATI’s insurance solutions from the international financial sector and African governments. Since its inception, ATI has supported $70 billion worth of investment and trade in Africa. ATI has maintained an ‘A/Stable’ credit rating for financial strength and counterparty credit from Standard & Poor’s for over ten years, and in 2019 ATI was rated A3/Stable by Moody’s. www.ati-aca.org

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