(Ecofin Agency) - • Burkina Faso receives €106 million ($119.4 million) under a 'Mourabaha' loan agreement with ITFC.
• The facility supports the cotton sector, which accounts for over 4% of GDP and 14% of exports.
• The loan is part of a $900 million framework agreement signed in May 2023 with ITFC.

The International Islamic Trade Finance Corporation (ITFC), a member of the Islamic Development Bank Group, has approved a €106 million ($119.4 million) financing facility for Burkina Faso to support its cotton industry. The funding was granted under a 'Mourabaha' agreement with the Burkinabe Society of Textile Fibers (Sofitex).

A 'Mourabaha' arrangement involves the purchase of goods by a financial institution, which resells them to the client at a pre-agreed margin, complying with Islamic finance principles by avoiding interest charges. The loan aims to strengthen a sector that directly supports four million people, contributes more than 4% to the country's GDP, and generates roughly 14% of national export revenue.

“This funding will not only stimulate cotton production but also create tangible impacts on the livelihoods of rural populations, strengthen value chains and support the country’s sustainable economic growth,” said Bienvenu Paré, CEO of Sofitex.

This loan falls under a broader $900 million framework agreement signed in May 2023 between the ITFC and Burkina Faso. To date, the ITFC has committed approximately $3.3 billion to Burkina Faso through 48 financing operations, mainly in the agriculture and energy sectors.

Burkina Faso ranks among the top cotton producers in West Africa, alongside Mali and Benin. With this funding, the government aims to produce 550,000 tons of cottonseed for the 2025/2026 season—an 83% increase over current forecast levels.