(EBID) - EBID aims to allocate nearly 41% of its commitments to projects with environmental and social impact by 2030. In West Africa, a region that is undergoing rapid demographic and climate change, where less than one in ten rural residents has access to electricity, the Bank is accelerating its transition towards sustainable finance.

How can the Community finance the growth of a sub-region that will have 800 million inhabitants by 2050, without exacerbating a climate crisis of which it is one of the first victims? This, in essence, is the challenge the ECOWAS Bank for Investment and Development (EBID) is seeking to address.

In its new five-year strategy for 2026–2030, entitled ‘GRO Strategy’, the sub-regional development finance institution based in Lomé, Togo, plans to allocate around 41% of its commitments to ESG (Environmental, Social and Governance) related areas, of which a minimum of 15% for sustainable energy.

An ambitious pledge for a Bank whose total investment portfolio stood at USD 5.1 billion at the end of September 2025. “The energy, water and agriculture sectors are not automatically ‘green’ by nature,” the Bank explains. “However, EBID’s strategic direction is clear and sustainable.  Behind this statement lies a clear commitment not to reduce the approach to mere token labelling.

A continental gap to bridge

The ambition is commensurate with the accumulated shortfall. According to the Climate Policy Initiative (CPI), climate finance in Africa reached USD 43.7 billion over the 2021–2022 period, accounting for 48% increase. However, the private sector contributes only 18% of these flows, the lowest share of any region in the world. Even more illustrative: between 2012 and 2023, the continent represented less than 0.2% of global green, social and sustainable bond issuance, according to the Natural Resource Governance Institute (NRGI).

Furthermore, according to the United Nations Economic Commission for Africa (UNECA), African borrowers have to contend with financing costs twice higher than those of their counterparts with comparable credit ratings. In other words, those who urgently need resources to carry out their transition are precisely those for whom the cost of capital remains the most prohibitive.

An environmental and social framework aligned with international standards

EBID is not starting from scratch. Since 2013, it has relied on its Environmental and Social Management System (ESMS), which has been progressively strengthened and is now fully aligned with the standards of the International Finance Corporation (IFC), the World Bank, the African Development Bank (AfDB), the French Development Agency (AFD), etc., covering all its instruments.

The year 2025 marked a major milestone with the Bank’s accreditation to the Green Climate Fund (GCF), the world’s leading climate finance mechanism. This status now enables it to directly mobilise concessional resources to finance projects with high ecological added value in West Africa.

A Euro 100 million agreement signed with the European Investment Bank (EIB) at the Finance in Common (FiCs) 2025 summit has further strengthened this momentum.

“Accreditation with the GCF is not just a label. It is direct access to resources that can transform our portfolio and accelerate the green transition of Member States,” explains the Bank’s Environment and Sustainable Development Unit (ESDU).

Concrete progress marking a historic milestone in the financial markets

In July 2024, EBID reached a historic milestone by launching the first Green, Social and Sustainable (GSS) Bonds through a public offer in the WAEMU (West African Economic and Monetary Union) region. The seventy (70) billion CFA franc (approximately 123.13 million USD) bond, with a 7-year maturity and a coupon rate of 6.50%, was fully subscribed in less than five days, demonstrating the growing appetite of regional investors for sustainable instruments.

By way of comparison, the Regional Stock Exchange (BRVM) had raised only around 100 billion CFA francs in total for the climate transition, according to its own figures from February 2025. EBID alone therefore accounts for a substantial share of the regional effort. Globally, cumulative sustainable bond issuance exceeded USD 5.7 trillion in 2024, according to estimates by the Climate Bonds Initiative, and was even close to USD 6.2 trillion, according to the World Bank. The contrast is striking.

The energy equation: a challenge fraught with tensions

These institutional advances come up against a particularly harsh social reality. Within the ECOWAS (Economic Community of West African States) region, the average rate of access to electricity stands at 54%, and remains below 10% in rural areas, according to the ECOWAS Commission. In Niger, it stands at just 19%. How can decarbonisation be envisaged when a significant portion of the population does not even have basic access to light?

EBID fully acknowledges these constraints, says one of its officials. In the energy, transport and industrial sectors, development imperatives frequently clash with environmental requirements. The Bank therefore gives credence to an ‘orderly transition’, which involves a comparative review of technical alternatives, rigorous impact assessments and a gradual shift towards low-carbon pathways.

In particular, it highlights the solar electrification of 250 rural communities in Niger, financed to the tune of 39.7 million units of account, as a tangible illustration of the possibility of reconciling economic growth and the ecological transition.

The challenge of implementation

The hardest part is yet to come. EBID has, on its part, identified several major obstacles, which include “the high cost of capital, insufficient project preparation and persistent structural macroeconomic constraints”. These obstacles are well documented. According to an analysis by Columbia University, the cost of borrowing to finance clean energy infrastructure in Africa averages between 15% and 18%, compared with 2% to 5% in Europe.

The UNDP (United Nations Development Programme), for its part, highlights the limited capacity of many governments to structure genuinely bankable projects, whilst a working paper by the International Monetary Fund (IMF) published in 2025 highlights the weakness of capital markets and the inadequacy of regulatory frameworks.

Even the AfDB, an institution of a completely different scale, had achieved only 78% of its target of USD 25 billion in climate finance by the end of 2024. EBID, for its part, is focusing on blended finance mechanisms and the mobilisation of dedicated resources. It also draws on estimates from the United Nations Economic Commission for Africa (UNECA), according to these forecasts, a green investment could generate up to 420% additional gross value and create 250% more jobs than a conventional investment.

While this projection is certainly based on a modelling exercise, it fuels the growing conviction that ESG performance and profitability are by no means incompatible.

A transition that must remain inclusive

The challenge, therefore, is not whether the transition should be financed, but how to implement it without widening existing social divides. With its new strategic direction, strengthened instruments and international positioning, EBID now intends to fully play its role, which is to become a catalyst for the green transition, but above all, a key player in equitable, sustainable and resilient development in West Africa.