(Ecofin Agency) - In February 2024, Benin successfully issued Eurobonds despite high interest rates, supported by a MIGA guarantee. The country now aims to secure long-term commercial financing on better terms to advance its sustainable development goals.

Recently, Benin obtained a €200 million ($211 million) guarantee from the Multilateral Investment Guarantee Agency (MIGA), a subsidiary of the World Bank, to unlock €500 million ($527 million) in long-term commercial financing. According to an official statement, the funds will be directed toward strategic social and climate projects.

This guarantee, which reduces risks related to Benin’s repayment capacity, is expected to help the country secure better financial terms on international markets. Romuald Wadagni, Minister of Economy and Finance, described the agreement as "a recognition of Benin's structural reforms and support for its sustainable development goals."

The funds will support key projects, including strengthening the national social registry to better target vulnerable populations, improving disaster risk management, and advancing sustainable urban development. These initiatives align with Benin's commitments under its nationally determined contributions (NDCs) in the Paris Agreement. The country estimates a $10 billion funding gap to achieve its NDC goals by 2030.

This MIGA guarantee comes as Benin diversifies its funding sources. In 2021, the country issued Africa’s first sovereign bonds linked to sustainable development goals (SDGs), raising €500 million. Those funds helped significantly improve access to drinking water, with rural coverage rising by 83.5% and urban coverage by 30.5% between 2017 and 2022.