26 Apr 2023

Commerzbank and Investec arrange financing to provide safe drinking water

Commerzbank and Investec jointly arrange financing to provide safe drinking water to two million people in rural Cote d’Ivoire

Investec and Commerzbank, in collaboration with Swiss Export Risk Insurance and Atradius Dutch State Business, have concluded a loan agreement with Côte d’Ivoire’s Ministry of Economy and Finance to develop and rehabilitate essential water supply infrastructure across up to 111 locations, enhancing access to potable water in these areas. 

In the build-up to World Water Day and the United Nations (UN) 2023 Water Conference held in March, Investec and Commerzbank signed a commercial loan agreement with the Ministry of Economy and Finance of Cote d’Ivoire to finance a critical drinking water project for the country. The project will facilitate the safe and efficient abstraction, treatment, storage and distribution of drinking water in rural areas that have been characterised by damaged or absent water infrastructure and vital water treatment processes. 

Commerzbank acted as mandated lead arranger with Investec as co-arranger for the commercial loan. The total loan amount is approximately EUR178 million, of which EUR152 million will be provided by Commerzbank and covered by Switzerland’s export credit agency, Swiss Export Risk Insurance and re-insured by Atradius Dutch State Business. The remaining commercial loan of approximately EUR26 million will be provided by Investec. Bluebird Finance & Projects has acted as lead financial arranger for the EPC contractor.

The project is a sub-project of the Ministry of Hydraulics’ “Water for All” priority programme (Water Programme) that aims to promote access to potable water in remote villages in Cote d‘Ivoire. The project will comprise 111 sites that will be organised into four lots for execution and to which the essential supply infrastructure will connect. All infrastructure will be designed and installed by world-class engineering, procurement and construction EPC contractor, Rimon Group Limited (Rimon), which specialises in water transmission and treatment projects. The development activities will include borehole drilling and electrical pump installation, the construction of water reservoirs and associated treatment units, and distribution pipes, which Rimon is well-placed to implement following its extensive water project experience worldwide.

Investec’s and Commerzbank’s contribution to the project shows their commitment to advancing water inclusivity in the context of a global water crisis. According to the UN, a quarter of the world’s population relies on unsafe drinking water sources, which has direct and indirect ramifications for social and economic sustainability. Water scarcity puts businesses, governments, communities and economies at risk, which in turn can affect sustainability, continuity and growth. The project will serve approximately 1.3 million Ivoirians who are impacted by accessibility to clean drinking water, a number that is expected to rise to 2.15 million by 2035. Once operational, the project will relieve communities from manually transporting water on foot, which, in addition to being labour intensive, leads to health issues that impact the quality of living, workforce availability and life expectancy.

“In addition to the project accomplishing UN Water’s water financing goals and achieving SDG 6 (clean water and sanitation), it also fulfils many other SDGs by water’s association with poverty, health, food security and gender equality,” says Brian Irvine, Investec’s  Head of Structured Debt and Trade Finance. “This is evidenced through the anticipated benefits of the project which, once implemented, will reduce diseases relating to contaminated drinking water, improve hygiene standards and prolong life expectancy, generate labour opportunities during construction, and encourage associated commercial and social activities during operation.”

“This is another successful milestone for Bluebird Finance & Projects in the water sector in Africa”, says Ram Shalita, CEO and Partner at Bluebird, which over the last seven years has closed infrastructure deals worth approximately US$1.8 billion in Africa. “This project is the essence of export finance and sustainable practices, and will improve the lives of millions of people in the long run.”