Entrepreneurship in Solar Energy

RAPPORT ANNUEL 2017

ANNUAL REPORT 2018

➔ ANNUAL REPORT 2018 TABLE OF CONTENTS 2 MESSAGE FROM PRESIDENT TABLE OF CONTENTS SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN THE WAEMU REGION

SECTION TWO ACHIEVEMENTS IN 2018 1

THEME FOR THE YEAR ACHIEVEMENTS IN 2018 SOLAR ENERGY IN THE WAEMU ECONOMIES 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Speeding up regional Integration through sustained financing of infrastructure 2.2. Support for inclusive growth, food security and sustainable development 2.3. Support for businesses and governments, developping financial engineering and services 2.4. Deepening the resource mobilization process 2 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 3 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization 2.2 Legal and regulatory uncertainties 2.3. Considerable technical constraints 2.4 Difficulties for operators to access financing

3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2 Entrepreneurship in solar energy

4. PROSPECTS FOR SOLAR IN THE WAEMU REGION LIST OF ACRONYMS AND ABBREVIATIONS 4.1. Initiatives to promote solar LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS 3 MESSAGE FROM PRESIDENT MESSAGE FROM THE PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 sident of the Republic of Côte d'Ivoire. It was also attended by His Excellency Mr. Komi Sélom Klassou, Prime Minister SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT of Togo, representing his country's Head of State. I would like, in this regard, to reiterate my sincere gratitude to the SECTION TWO ACHIEVEMENTS IN 2018 Conference of Heads of State and Government for the strong and renewed support for BOAD on this occasion. THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES The Bank's activities in 2018 took place in a conducive eco - nomic and social environment. The economic dynamism that began in 2012 in the WAEMU region continued during the year, with a growth rate of 6.6 percent. This perfor - he West African Development Bank (BOAD) celebra - mance was driven both by the service sector (banking, ted its 45th anniversary in 2018. To mark the occa - trade) and by the implementation of national or regional Tsion, it held a forum in Lomé on 14 and 15 November development programmes, particularly in agricultural in - on the theme "Solar energy in the WAEMU economies: vestment and the modernization of keyinfrastructure. overview of the situation, challenges and policies". The event was very revealing; the lessons learned and recom - It is against this background that the Bank continued to sup - mendations made will be put to good use through the po - port the economies by providing financing totaling XOF426.8 licies and actions that the Bank's member countries, with billion. The loans and other assistance thus granted will foster support from community institutions, agencies and part - the implementation of investment projects in various sectors, ners, will be keen to promote. including transport facilities, agriculture, energy, industry and promotion of SMEs/SMIs. Financing for the year brought the The opening ceremony of the forum was chaired by the cur - Bank's total net commitments to XOF5,311 billion as of 31 rent President of the WAMU Conference of Heads of State December 2018, covering a total of 1,149 operations, with a and Government, His Excellency Mr. Alassane Ouattara, Pre - cumulative disbursement rate of 62.3%.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS MESSAGE FROM THE PRESIDENT 4 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT In terms of resource mobilization, the investment grade ra - In terms of internal governance and risk management, the

SECTION TWO tings, confirmed by Moody's and Fitch, at the end of the year was marked by the adoption of IFRS 9 and a new ACHIEVEMENTS IN 2018 2018 annual review, gives the Bank access, under good benchmarking of the internal rating models for counterpar -

THEME FOR THE YEAR conditions, to the international financial market. Neverthe - ties. Work is also underway on developing the "Risk Appe - SOLAR ENERGY less, the Bank continues to maintain fruitful cooperative re - tite Framework", the "economic capital" and a modern IN THE WAEMU ECONOMIES lationships with its development partners. In this regard, financial management system. two bilateral agreements were been signed, worth a total of US$45 million (XOF 25.4 billion). The Bank also conti - Finally, I would like to reiterate my deepest gratitude to the nued to mobilize grants from international environmental high authorities of WAEMU for their continued support to funds (GEF, AF and GCF), which were used to develop and BOAD. I would also like to thank our partners very much for finance low-carbon and climate change projects. their commitment and support. Finally, I would like to congratulate the Bank's staff on the results achieved and encourage them to continue their relentless efforts in the service of the development of the member countries.

CHRISTIAN ADOVELANDE President, BOAD

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS 5 MESSAGE FROM PRESIDENT LIST OF ACRONYMS AND ABREVIATIONS SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 AFD : Agence Française de Développement HDI : Human Development Index (French Development Agency) IPP : Independent Power Producer SECTION ONE AIBD : Aéroport International Blaise Diagne ECONOMIC AND SOCIAL ENVIRONMENT IRED : Regional Initiative for Sustainable Energy AfDB : African Development Bank IRENA : International Renewable Energy Agency SECTION TWO BADEA : Arab Bank for Economic Development in ACHIEVEMENTS IN 2018 KfW : Kreditanstalt für Wiederaufbau (German Africa State-owned development bank) THEME FOR THE YEAR BCEAO : Central Bank of West African States XOF’B : Billions of XOF SOLAR ENERGY EIB : European Investment Bank IN THE WAEMU ECONOMIES OECD : Organization for Economic IDB : Islamic Development Bank Co-operation and Development EBID : ECOWAS Bank for Investment and OMVS : Organization for the Development of the Development Senegal River BOAD : West African Development Bank PACITR : Community Action Programme for Road BTP : Construction, Public works Infrastructure and Transport UNFCCC : United Nations Framework Convention on CDP : ECOWAS Community Development Climate Change Programme ECOWAS : Economic Community of West African REP : Regional Economic Programme States RIP : Regional Indicative Programme COP : Conference of Parties LDC : Least Developed Countries CPCS : Canadian Pacific Consulting Services SME-SMI : Small and M edium Enterprises - Small and RCC : Regional Collaboration Centre Medium Industries CFAF/XOF : Franc de la Communauté Financière PPIAF : Public-Private Infrastructure Advisory Africaine (Franc of the African Financial Facility Community) PPP : Private-Public Partnership FDC : Development and Cohesion Fund TFP : Technical and financial partner FDE : Energy Development Fund SAP : Systems, Applications and Products for EDF : European Development Fund data processing GEF : Global Environment Facility EU : European Union IMF : International Monetary Fund WAEMU : West African Economic and Monetary Union IAS/IFRS : International Accounting Standards / URDPPP : Regional Public-private Partnership Project LIST OF ACRONYMS AND ABBREVIATIONS International Financial Reporting Standard Development Unit LIST OF ANNEXES ICOR : Incremental Capital Output Ratio ANNEXES WAPP : West African Power Pool ANNUAL REPORT 2018 TABLE OF CONTENTS 6 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 Date of establishment 14 november 1973 Commencement of operations in 1976 SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Shareholders - WAEMU member countries: Benin, Burkina, Côte d’Ivoire, Guinea Bissau, Mali, Niger, Senegal, Togo SECTION TWO - BCEAO (Central bank) ACHIEVEMENTS IN 2018 - Non-regional shareholders: Germany, AfDB, EIB, Belgium, France, India, People’s Republic of China, Kingdom of Morocco THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES Mission Promoting the balanced development of member countries and contributing towards the economic integration of West Africa Vision BOAD: A solid development bank for the economic integration and transformation of West Africa

Authorized capital as at 31 December 2018 XOF1,155 billion Subscribed capital as at 31/12/2018 XOF1,103.6 billion Total balance sheet as at 31/12/2018 XOF2,568.2 billion Operational staff of the Bank as at 31/12/2018 295 employees

Loans granted in 2018 43 operations involving a total of XOF426.8 billion in the form of:

Direct loans : XOF393.3 billion, representing 92.1% Indirect loans : XOF20.0 billion, representing 4.7% Equity investment : XOF13.5 billion, representing 3.2%

Breakdown of loans per sector:

Non-commercial sector : XOF246.7 billion, representing 57.8% Public commercial sector : XOF70.6 billion, representing 16.5% Private sector : XOF109.5 billion, representing 25.7%

Breakdown of loans per category

National projects : XOF388.1 billion, representing 90.9% Regional projects : XOF38.7 billion, representing 9.1%

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES Cumulative approvals, 1976 - 2018 XOF5, 311 billion ( € 8.1 billion) covering 1,149 operations. ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS 7 MESSAGE FROM PRESIDENT HIGHLIGHTS OF THE YEAR 2018 SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 2 January 21 March Adoption of IFRS 9 and calibration of internal 108 th Board Meeting rating models SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018 27 March and 4 April THEME FOR THE YEAR 9 January SOLAR ENERGY Maintaining the Bank's investment IN THE WAEMU ECONOMIES Holding of a regional workshop on the promotion of grade ratings climate-smart agriculture

7 June 10-11 April Holding of a workshop to launch the Participation in an EU-organized preparation of the regional project to support high-level conference in Brussels on sustainable waste management and reduce job creation, growth and emissions of persistent organic pollutants competitiveness in West Africa (POPs) and mercury in WAEMU countries.

27 June 109 th Board Meeting 27 June 27 August - 2 September Approval of the agro-food Launch of 2 BOAD competitions: the first on "Footprints of processing project in Togo BOAD", and the second for start-ups operating in renewable (Kara Region) energies in the WAEMU region 5-10 July 18-19 September Participation in the 7 th Workshop on the restitution and dissemination meeting of the High Level of the study on capacity building for PPP LIST OF ACRONYMS AND ABBREVIATIONS Committee on Food and development in WAEMU LIST OF ANNEXES Nutritional Security ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 8 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 19 September 2-3 October HIGHLIGHTS OF 2018 110 th Board Meeting BOAD Open Days in Dakar (Senegal)

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018 20 September THEME FOR THE YEAR SOLAR ENERGY Official launching of the World Bank/WAEMU Project 13 November IN THE WAEMU ECONOMIES to promote affordable housing finance in WAEMU Inauguration of BOAD residential area 20 November 14-15 November Validation workshop of the Commemoration of BOAD's 45th anniversary evaluation report of the portfolio and Forum on solar energy in WAEMU of non-market projects financed by economies BOAD in Togo from 2000 to 2015

5-6 December Maintenance of ISO 27001 certification of the Informa - tion Security Management System 17 December 19 December Participation in the meeting of the Senegal 111 th Board Meeting Consultative Group on the financing of Phase II of the Emerging Senegal Plan (PSE)

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 9 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 2 January The programme will be deployed in five countries (Benin, Burkina Faso, Ghana, Niger, Togo) and will foster inclusive SECTION ONE Adoption of IFRS 9 and calibration of internal ra - growth, food security and the mobilization of concessional ECONOMIC AND SOCIAL ENVIRONMENT ting models or grant resources from the financial mechanisms under SECTION TWO the United Nations Framework Convention on Climate ACHIEVEMENTS IN 2018 In order to comply with international standards, the Change (UNFCCC). Bank adopted the IFRS 9 accounting standard starting THEME FOR THE YEAR SOLAR ENERGY in January 2018. This approach prompted a review of IN THE WAEMU ECONOMIES its method for depreciating financial instruments. The 27 June 2018 impairment of these instruments is now based on the probabilities of default associated with each rated 108 th Board Meeting counterparty. The Board of Directors of the West African Development The Bank also calibrated its internal rating models, Bank (BOAD) met at Dakar in Senegal and approved new changing from three to six rating models and establi - operations totaling XOF190 billion and an equity invest - shing an internal masterscale based on that of the Glo - ment of XOF5 billion. bal Emerging Markets Consortium (GEMS). This is a repository shared by several multilateral or European development banks. 27 March and 4 April

Maintaining the Bank's investment grade ratings 9 January The Bank hosted the annual review missions of two in - Holding of a regional workshop on the promotion ternational rating agencies, Moody's and Fitch. At the of climate-smart agriculture end of their review, the two agencies confirmed the ra - tings assigned since 2015, namely Baa1 stable (for The Bank held a regional workshop at its headquarters in Moody's) and BBB stable (for Fitch). Lomé, Togo, to validate the full proposal for the project to promote climate-smart agriculture in West Africa.

This project was the outcome of collaboration between

LIST OF ACRONYMS AND ABBREVIATIONS the Bank and other subregional institutions or bodies LIST OF ANNEXES such as the ECOWAS Commission and the WAEMU ANNEXES Commission. ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 10 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 10 -11 April conference brought together many representatives of the private sector, development banks, as well as go - SECTION ONE Holding of a workshop to launch the preparation vernment authorities from West African countries. The ECONOMIC AND SOCIAL ENVIRONMENT of the regional project to support sustainable event was held to discuss ways to improve business cli - SECTION TWO waste management and reduce emissions of per - mate in support of the private sector, with a view to fos - ACHIEVEMENTS IN 2018 sistent organic pollutants (POPs) and mercury in tering the emergence of new business and employment WAEMU countries. opportunities for young people. THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES The workshop was held at the Bank headquarters in Lomé to launch the preparation of the project. 27 June

This was part of the procedures for project formulation and 109 th Board Meeting submission to the Global Environment Facility. The project is aimed at supporting the promotion of a circular economy The Board of Directors of the West African Develop - in the area of solid waste management (biomedical, elec - ment Bank (BOAD) held its 109th ordinary meeting at trical and electronic waste, etc.) and the reduction of green - its headquarters in Lomé (Togo). At this meeting, the house gas emissions from the misuse of such waste in the Board approved eleven (11) new operations including target countries. seven (7) medium and long-term loans totaling XOF90.8 billion, a refinancing facility involving XOF10 billion, a short-term loan in an amount of XOF5 billion 7 June and equity investments involving XOF6 billion.

Participation in an EU-organized high-level confe - rence in Brussels on job creation, growth and com - 27 June petitiveness in West Africa Approval of the agro-food processing project in The President of BOAD participated in the high-level Togo (Kara Region) conference on job creation, growth and competitiveness in West Africa on the sidelines of the 5th EU-West Africa As part of a program to develop 10 agropoles in Togo, the RIP Strategic Steering Committee meeting, held in Brus - Bank co-financed the implementation of the first phase of sels. Organized jointly by the European Union Commis - the agro-food processing project in Togo.

LIST OF ACRONYMS AND ABBREVIATIONS sion and the ECOWAS and WAEMU Commissions, this LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 11 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 The project is aimed at creating, within a limited and de - the selection of photos of BOAD-funded projects in its veloped area, as many favorable economic, legal and lo - member countries. The second involved the innovative SECTION ONE gistical conditions as possible for private investors to take initiatives and projects promoted by start-ups in renewa - ECONOMIC AND SOCIAL ENVIRONMENT an interest in and establish themselves in the agricultural ble energy, particularly solar energy. This second compe - SECTION TWO sector. tition aimed to promote the skills of local developers and ACHIEVEMENTS IN 2018 promote green jobs. It involves the development of a 46 ha agropark, the THEME FOR THE YEAR SOLAR ENERGY construction of dams, the development of planned farming The top prize awarded to a Malian, for a photo of the IN THE WAEMU ECONOMIES areas, lowlands, tracks, electrification of villages and the Segou interchange in Mali. establishment of agricultural processing centres, among other things. Two prizes were awarded for the start-up competition, given the respective strengths of the two best entries: the first to a Togolese, promoter of a KYA-SoP electro-solar 5-10 July power plant project, and the second to a Senegalese for a “smart solar water pump project, with a digital training Participation in the 7th meeting of the High Level and marketing platform”. Committee on Food and Nutritional Security The two award-winning start-ups will also receive support Chaired by the Head of State of Niger, H.E. Mr. Issoufou from a Danish equipment manufacturer over a period of Mahamadou, the High-Level Committee on Food and Nu - six months, as well as a week training at the Entrepre - trition Security held its 7th meeting on July 10 in Niamey. neurship Centre of the Danish Technical University. The main objective of the meeting was to renew dialogue on appropriate ways to promote food security and sustai - nable processing of agriculture in the WAEMU region. 18-19 September

Workshop on the restitution and dissemination of 27 August - 2 September the study on capacity building for PPP development in WAEMU Launch of 2 BOAD competitions: the first on "Foot - prints of BOAD", and the second for start-ups ope - The Regional Public-Private Partnership Project Develop - rating in renewable energies in the WAEMU region ment Unit (URDPPP), in partnership with the WAEMU

LIST OF ACRONYMS AND ABBREVIATIONS Commission and PPIAF, held a workshop on 18 and 19 LIST OF ANNEXES BOAD organized both competitions as part of the com - September at BOAD headquarters in Lomé to present and ANNEXES memoration of its 45th anniversary. The first resulted in disseminate the World Bank-funded study on this topic. ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 12 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 The workshop was attended by representatives of the 20 September various PPP Units or Directorates in the WAEMU member SECTION ONE countries, other representatives of member countries, Official launching of the World Bank/WAEMU ECONOMIC AND SOCIAL ENVIRONMENT the World Bank, PPIAF, AfDB, EBID, AFD and OMVS. Project to promote affordable housing finance in SECTION TWO WAEMU ACHIEVEMENTS IN 2018 The study was to: i) strengthen the regional institutional framework for the implementation of PPPs in the The President of the WAMU Council of Ministers, Mr. R. THEME FOR THE YEAR SOLAR ENERGY WAEMU region, ii) support the harmonization of PPP Wadagni, Minister of Economy and Finance of Benin, IN THE WAEMU ECONOMIES strategies within the WAEMU region, iii) and facilitate officially launched the project. The event, which was greater frequency and implementation of PPP projects held in Abidjan, was also attended by WAMU Ministers at the regional or even national level. of Finance or Housing, Heads of WAEMU institutions, and representatives of TFPs, including the World Bank.

19 September The project is intended to broaden access to long-term housing finance in the WAEMU region. The project imple - 110 th Board Meeting mentation will involve the granting of loans and provision of technical assistance (see BOAD 2017 Annual Report). The Board of Directors of the West African Develop - ment Bank (BOAD) held its 110th ordinary meeting in Abidjan (Côte d’Ivoire). At this meeting, Board mem - 2-3 October bers approved nine (9) new operations including six (6) medium and long-term loan proposals totaling XOF74 BOAD Open Days in Dakar (Senegal) billion, two (2) short-term loans amounting to XOF16 billion and one equity investment of XOF2.5 billion. The Bank organized Open Days in Dakar, Senegal.

The purpose of the event was to raise awareness of the Bank's products and services, promote its image, and strengthen the close relationship with the target audience in that Member country.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 13 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 The meeting featured two main sessions: i) an informa - ii) 3.50 km of roads and various networks (asphalt tion workshop for journalists and local authorities on roads, covered drains, electricity and public lighting, SECTION ONE BAOD's strategy and commitment to climate finance; drinking water supply, connection to optical fibre), ECONOMIC AND SOCIAL ENVIRONMENT and ii) an open forum with private sector operators. iv) sports and social infrastructure (leisure centre) on a SECTION TWO 8,000 m² site provided by the Togolese Government, ACHIEVEMENTS IN 2018 The event brought together more than 100 partici - and iv) 1.26 km of adjacent asphalted roads. pants representing public sector, national and interna - THEME FOR THE YEAR SOLAR ENERGY tional financial institutions, public and private IN THE WAEMU ECONOMIES organizations, companies and media professionals. 14-15 November

Commemoration of BOAD's 45th anniversary 13 November and Forum on solar energy in WAEMU economies Inauguration of BOAD residential area The opening ceremony of this event was attended by His The President of BOAD and the Togolese Minister of Excellency Mr. Alassane Ouattara, President of the Repu - Economy and Finance inaugurated the BOAD Housing blic of Côte d'Ivoire, current President of the WAEMU Project in Lomé, which was built by the Bank for its Conference of Heads of State and Government, as well staff pursuant to a decision by its Board of Directors. as by Mr. Komi Sélom Klassou, Prime Minister of Togo, representing the Togolese President. The launch of this major housing project is part of the Bank’s policy of incentivizing of encouraging its staff, The forum featured three panel discussions on: i) boos - as well as part of its social actions aimed at providing ting and developing the solar economy in the WAEMU a safe living environment for its employees. It is also region, ii) climate finance and resource mobilization, and part of a move to support the host country’s national iii) cross-references based on experience. housing and urban development policy. Conclusions from this forum are reflected in the The project located at Baguida, 14 km from the city thematic section of this annual report. centre, sits on a 7.62 ha site owned by the Bank. The project has: i) 134 fully secured and connected villas,

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS HIGHLIGHTS OF THE YEAR 2018 14 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 20 November 17 December

SECTION ONE Validation workshop of the evaluation report of Participation in the meeting of the Senegal ECONOMIC AND SOCIAL ENVIRONMENT the portfolio of non-market projects financed by Consultative Group on the financing of Phase II SECTION TWO BOAD in Togo from 2000 to 2015 of the Emerging Senegal Plan (PSE) ACHIEVEMENTS IN 2018 The workshop, attended by some forty (40) partici - The Bank participated in the meeting of the Advisory THEME FOR THE YEAR SOLAR ENERGY pants, was held at the Bank headquarters to stimu - Group for the financing of Phase II of the ESP on 17 IN THE WAEMU ECONOMIES late discussion on the main conclusions and December in Paris. The event, which was held at the recommendations of the evaluation report. It also World Bank Regional Office, was organized by the provided a platform for participants to share their ex - Government of Senegal. periences on the issues raised by the evaluation, and to ultimately agree on the conditions for The meeting, which brought together Senegal's de - validating the report. velopment partners, as well as other public and pri - vate investors, to finance the second phase of the At the end of the discussions, the participants com - programme, was a great success. mended the initiative of such an evaluation and validated the report submitted. 19 December

5-6 December 111 th Board Meeting

Maintenance of ISO 27001 certification of the During this meeting held in Dakar (Senegal), 3 projects Information Security Management System involving XOF15.21 billion were approved, thereby bringing BOAD’s cumulative commitments (all opera - The Bank successfully underwent the second supervi - tions combined) to XOF5,308.71 billion, since the sion audit of its information security management sys - commencement of its operational activities. tem, conducted by the AFNOR Certification Body. This enabled it to maintain its ISO 27001 Version 2013 Certification.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES RAPPORT ANNUEL 2018 TABLE OF CONTENTS MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT 1. INTERNATIONAL ECONOMIC ENVIRONMENT 1 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ECONOMIC ACHIEVEMENTS IN 2018 THEME FOR THE YEAR AND SOCIAL SOLAR ENERGY IN THE WAEMU ECONOMIES ENVIRONMENT

Farmer at Molodo, Mali

World economic growth Growth in the WAEMU The African Union, was estimated at 3.7% region is expected to through its agenda 2063, in 2018 reach 6.6% in 2018 hopes for “a prosperous LIST OF ACRONYMS AND ABBREVIATIONS Africa based on inclusive LIST OF ANNEXES growth and sustainable ANNEXES development”. ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 16 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

INTERNATIONAL 1 ECONOMIC ENVIRONMENT

Growth in sub-Saharan Africa was expected to reach 2.9% in 2018, same as in 2017, partly driven by improved growth prospects in Nigeria following a recovery in oil production and prices. LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 17 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO Global economic growth was estimated at 3.7% in 2018, Emerging and developing countries also recorded a slight de - ACHIEVEMENTS IN 2018 down from 3.8% in 2017. This slight decline reflected a slow - cline in their growth, which stood at 4.6% in 2018 compared down in activity, particularly in Germany, as a result of the in - to 4.7% in 2017, in spite of the accelerated growth recorded THEME FOR THE YEAR SOLAR ENERGY troduction of new emission standards in the automobile in India (7.3% in 2018 compared to 6.7% in 2017). China's IN THE WAEMU ECONOMIES industry, and in Italy, where sovereign and financial risks wei - growth slowed from 6.9% in 2017 to 6.6% in 2018, mainly ghed heavily on domestic demand. Tariff increases in the Uni - due to tighter financial sector regulations, weaker external de - ted States and China in 2018 also had negative impacts on the mand and trade tensions with the United States. global economy. Growth in sub-Saharan Africa was estimated at 2.9% in 2018, Growth in advanced countries reached 2.3% in 2018 compa - as in 2017. This situation was partly due to an improvement red with 2.4% in 2017, in line with the decline in activity in in Nigeria's growth prospects (1.9% in 2018 compared to the euro zone, which was 2.4% in 2017 and 1.8% in 2018. 0.8% in 2017), under the positive influence of a recovery in The United States economy, on the other hand, grew by 2.9% oil production and prices. In South Africa, however, growth in 2018 compared to 2.2% in 2017. was estimated at 0.8% in 2018 compared to 1.3% in 2017, in line with the climate of uncertainty in the run-up to the 2019 general elections.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 18 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Graph 1 Evolution of economic activity between 2015 and 2018 SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 2015 2016 2017 2018

0 World Advanced countries Euro countries Emerging & dev. countries Sub-Saharan Africa

Sources: WEO (IMF, January 2019)

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 19 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

ECONOMIC 2 ENVIRONMENT IN WAEMU

"Since 2012, the WAEMU region has achieved significant economic performance, in a context of controlled price trends, with an average annual growth rate of 6.3%, significantly higher than the rest of sub-Saharan Africa”. LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 20 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT 2.1. ECONOMIC SITUATION

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Since 2012, economies in the WAEMU region have of sub-Saharan Africa, which stands at 3.3%. These

SECTION TWO performed siginificantly, with an average annual performances are part of a context of price control ACHIEVEMENTS IN 2018 growth rate of 6.3%, significantly higher than the rest (see graph below).

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES Graph 2 Evolution of growth and inflation and the WAEMU region

8 3.5

7 3

GDP growth rate in volume 6 2.5

5 2 Annual inflation rate (shift in average 4 1.5 indexes in %)

3 1

2 0.5

1 0

LIST OF ACRONYMS AND ABBREVIATIONS 0 -0.5 LIST OF ANNEXES 2012 2013 2014 2015 2016 2017 2018 ANNEXES Source: WAEMU Commission, Multilateral Surveillance Report, Dec. 2018 ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 21 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018 Growth in the area in 2018 was expected to reach 6.6%, Growth rates by country in 2018 are as follows: Benin as it was in 2017. All Member States were expected to re - (6.8%), Burkina (6.7%), Côte d'Ivoire (7.7%), Guinea-Bis - THEME FOR THE YEAR cord a higher growth rate, driven by improved performance sau (3.8%), Mali (5.1%), Niger (5.2%), Senegal (6.8%) and SOLAR ENERGY in all sectors. Togo (4.8%). IN THE WAEMU ECONOMIES

The strong performance recorded by the primary sector was Prices increased moderately in 2018, reflecting changes in driven by favorable climatic conditions and continued in - international food prices, increases in the price of crude oil vestment in national agricultural development programmes and the prospects for food production in the region. in the Member Countries. The secondary sector was boos - ted by strong performance in construction and public The growth outlook for 2019 is 7.0%, slightly above the Works, coupled with continued construction of basic infra - 6.6% recorded in 2018. structure and improved results in the extractive industries. Performance in the service sector was driven largely by trade, transport and telecommunications.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 22 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 2.2. HUMAN DEVELOPMENT

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT In spite of the sustained growth recorded in the last seven years, social services (education, health, drinking water and sanitation,

1. INTERNATIONAL ECONOMIC ENVIRONMENT averaging 6.3%, the WAEMU region, like many other African etc.) and means of production. Since 1990, member countries 2. ECONOMIC ENVIRONMENT IN WAEMU countries, is faced with persistent poverty, which hinders the sus - have been ranked among countries with low human develop - tainable development of the continent's economy. ment; in 2017, with a human development index 1 (HDI) ranging SECTION TWO from 0.354 in Niger to 0.515 in Benin (see graph below), below ACHIEVEMENTS IN 2018 The UNDP Human Development Report 2018 indicates that the sub-Saharan average (0.537). Countries with a higher HDI among the main factors explaining the above-mentioned stag - also have lower levels of multidimensional poverty, as shown in THEME FOR THE YEAR SOLAR ENERGY nation are the lack of decent jobs, particularly for young people, Figure 3 (Benin, Senegal and Togo). IN THE WAEMU ECONOMIES gender inequalities, population growth, limited access to basic

Graph 3 HDI and Multidimensional poverty index 2 (MPI) in WAEMU

MPI HDI

Niger 0.354

Burkina Faso 0.423

Mali 0,427

Guinea Bissau 0.455

Côte d'Ivoire 0.492

Togo 0,503

Senegal 0.505

Benin 0.515

Source: UNDP Human Development Report 2018. LIST OF ACRONYMS AND ABBREVIATIONS 0.0 0.1 0.2 0.3 0.4 0.5 0.6 LIST OF ANNEXES 1 The Human Development Index is a composite index, which takes into account three fundamental dimensions of human development: life expectancy at birth; ANNEXES access to education; and gross national income per capital. 2 The Global Multidimensional Poverty Index (MPI) identifies multiple deprivations at the household level in health, education and living standards. ANNUAL REPORT 2018 TABLE OF CONTENTS ECONOMIC AND SOCIAL ENVIRONMENT 23 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD Conscious of the challenges facing African countries, the African Developing rural-urban links to create jobs by stimulating AND LOANS GRANTED IN 2018 • HIGHLIGHTS OF 2018 Union, through its Agenda 2063 adapted in 2015, hopes for “a local economies through: Prosperous Africa based on Inclusive Growth and Sustainable De - velopment”. Thus, in 2018, it produced, in collaboration with the i) The formulation and implementation of industrial strategies SECTION ONE OECD, a report on the dynamics of development in Africa, with that promote activities that link rural agricultural producers, ECONOMIC AND SOCIAL ENVIRONMENT a view to stimulating policy dialogue and deepening reflection. industrial producers and urban consumers, particularly as 1. INTERNATIONAL ECONOMIC ENVIRONMENT part of agro-food value chains, 2. ECONOMIC ENVIRONMENT IN WAEMU The report on the theme "Growth, employment and inequality" highlights the persistent inequalities and the shortage of quality ii) Strengthening infrastructure and national and transboundary SECTION TWO ACHIEVEMENTS IN 2018 jobs on the continent, despite solid growth. This report also pro - corridors, poses new development strategies. THEME FOR THE YEAR iii) Securing land tenure and equitable access to land to reduce SOLAR ENERGY The report indicates that growth in the WAEMU region is sup - the risk of conflict and slow the rural drift of young people, IN THE WAEMU ECONOMIES ported by private consumption and public investment. However, private consumption remains heavily dependent on imports as iv) Good policies for redistributing wealth. the local supply of goods and services is very limited, without in - dustrialization and processing. Upgrading local supply capacity in consumer products • and services through: The labor market is dominated by the informal sector, characte - rized by largely unstable and low-productivity jobs. The agricul - i) A grouping of companies, tural sector remains the largest employer in the Union, followed by the service sector. ii) Microfinance, training and innovation support programmes to help microenterprises improve their productivity and income. A vast majority of the youth are unemployed. This phenomenon Education policies should support investment in human capital is explained not only by structural and socio-political factors, 3 but and integrate entrepreneurial training into formal education, also by a mismatch between skills and market needs, as well as in order to foster entrepreneurship among young people. The by a low level of training. local economy could also improve, by changing the structure and destination of exports (dominated by raw materials), as In terms of inequality, the average gap between the HDI (0.46) well as imports (dominated by final consumption goods). and the HDI (0.30) reflects a loss in human development caused by inequality. However, income inequalities have declined slightly Improving institutional capacity, regulatory framework • in the WAEMU area, with the GINI index 4 declining on average for business and taxation to attract investment: Govern - from 0.43 over the period 1990-1995 to 0.41 between 2010 and ments should continue to create a conducive environment for 2015. Gender inequalities persist, particularly in access to eco - business, investment and capital accumulation (fight against nomic and social opportunities, notwithstanding policies imple - corruption, fraud, tax evasion and embezzlement of public mented to address them. funds).

LIST OF ACRONYMS AND ABBREVIATIONS As a means of ensuring sustained, sustainable and inclusive growth LIST OF ANNEXES in the WAEMU region, the following development strategies are 3 These include factors such as: obstacles to the creation and development of businesses, distor - ANNEXES proposed for implementation in three main areas : tions in the labour market, political instability, etc. 4 Index that makes it possible to assess inequalities in the distribution of a country's wealth. It is between zero (situation of perfect equality) and one (situation of perfect inequality). ANNUAL REPORT 2018 TABLE OF CONTENTS MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE 2 ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018 ACHIEVEMENTS 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through sustained infrastructure investment 2.2. Support for inclusive growth, food security IN 2018 and sustainable development 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

Pharmivoire production unit (Côte d'Ivoire)

XOF426.8 billion in XOF252.3 billion was 30% of cumulative financing was provided invested in strengthening commitments at the end by the Bank in 2018. basic infrastructure. of 2018 were made to LIST OF ACRONYMS AND ABBREVIATIONS regional economic LIST OF ANNEXES ANNEXES integration projects ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 25 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

Womey Bridge construction site in Benin

GENERAL 1 PICTURE

In 2018, the Bank provided financing totaling XOF426.8 billion, including XOF380 billion in the form of medium and long-term loans and XOF31.0 billion in short-term financing. LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 26 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Financing by sector for the year was as follows: SECTION TWO ACHIEVEMENTS IN 2018 Table 1 1. GENERAL PICTURE 5 2. ACHIEVEMENTS PER STRATEGIC AREA APPROVAL (LONG, MEDIUM AND SHORT TERM) PER SECTOR IN 2018 2.1. Accelerating regional integration through sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development Approvals Number of % 2.3. Support for businesses and governments, (XOF’bln) operations Approvals development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance NON-COMMERCIAL SECTOR (a) 246.7 22 57.8

THEME FOR THE YEAR COMMERCIAL SECTOR (b = i + ii) 180.1 21 42.2 SOLAR ENERGY IN THE WAEMU ECONOMIES Public commercial (i) 70.6 8 16.5

Private (ii) 109.5 13 25.7

TOTAL (a+b) 426.8 43 100

5 Including equity investment

Direct financing totaling XOF393.3 billion (92% of appro - The refinancing facilities stand at XOF20 billion, or 4.7% ved loans) were provided to support new investment pro - of the year's financing and went into strengthening the jects, particularly in transport, electrification, safe drinking productive capacities of SMEs through national financial water, sanitation, food security, industry and services. institutions.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 27 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018 Graph 4 Graph 5 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA BREAKDOWN OF APPROVALS PER TYPE EVOLUTION OF BOAD'S CUMULATIVE NET 2.1. Accelerating regional integration through OF FINANCING IN 2018 (XOF’bln) COMMITMENTS (XOF’bln) sustained infrastructure investment 2.2. Support for inclusive growth, food security 5,310.9 and sustainable development 3% 4,914.8 2.3. Support for businesses and governments, 5% Equity development of financial engineering and services investments Refinancing 4,409.4 2.4. Deepening the resource mobilization process facilities XOF 13.5 Bln 2.5. Aligning management and governance XOF20 Bln 3,878.5

THEME FOR THE YEAR 3,602.3 SOLAR ENERGY IN THE WAEMU ECONOMIES 3,292.3

2,712.0

2,223.6

1,848.4

1,483.3 92% Direct loans XOF 393.3 Bln

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 28 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 Four equity investments, involving a total of XOF13.5 bil - Cumulative financing for regional economic integration pro - lion, were made in investment funds operating in the re - jects stood at XOF1,601.8 billion, representing 30.2% of SECTION ONE gion, namely CAURIS IV, AFIG II, ECP Africa IV and commitments at the end of December 2018. ECONOMIC AND SOCIAL ENVIRONMENT ADIWALE I. The Bank also acquired a stake in the capital of Banque Régionale des Marchés (BRM) Holding SA, As regards financing arrangements , requests for fun - SECTION TWO which is being created for XOF326.4 million, through the draising resulted in the mobilization of XOF68 ACHIEVEMENTS IN 2018 partial transfer of shares held in the capital of BRM. billion for the principals. 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through The new loans granted brought the Bank's total net com - Technical assistance for project preparation involved a sustained infrastructure investment 2.2. Support for inclusive growth, food security mitments to XOF5,311 billion as at 31 December 2018, total amount of XOF2.3 billion for feasibility studies. This and sustainable development involving 1,149 operations. brought the total amount of this category of assistance to 2.3. Support for businesses and governments, development of financial engineering and services XOF31.2 billion at the end of December 2018. 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES INSERT 1

Financing of project studies

In 2018, in response to requests for cash advance for studies, the Bank financed seven public project appraisals, with a total amount of XOF2.3 billion. This type of financing was granted to the following member countries at a rate of 1.5%: Benin, Burkina Faso, Côte d'Ivoire, Mali, Niger and Senegal.

The studies in question were inten - Between 2013 and 2017, the Bank ii) seventeen (17) studies are on - ded to prepare the projects for pos - granted WAEMU member countries going, with a total amount of sible financing by the Bank. These cash advances totaling XOF11.2 bil - XOF3.6 billion; iii) fourteen (14) stu - made is possible to bring projects to lion to finance 41 operational stu - dies, with a total amount of XOF4.8 maturity, particularly in the fields of dies in various sectors. billion, are at the consultants pre - craft entrepreneurship, hydro-agri - qualification stage; and iv) while cultural development, river trans - The status of the studies referred to two (2) studies, involving a total port, water resource protection and above is as follows: i) eight (8) stu - amount of XOF440 million are enhancement. dies have been completed, with a being withdrawn following funding LIST OF ACRONYMS AND ABBREVIATIONS total amount of XOF2.3 billion; by another financier. LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 29 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 1 (continued )

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT The completed studies have resul - The studies financed by the Bank in In terms of lessons learned, the SECTION TWO ted in the preparation of: i) seven 2018 bring to XOF13.5 billion the Bank's monitoring and evaluation ACHIEVEMENTS IN 2018 (7) projects that are being financed total amount allocated for the fi - activities reveal that the conduct of 1. GENERAL PICTURE by BOAD, for which previous cash nancing of studies over the last six quality studies at the beginning of 2. ACHIEVEMENTS PER STRATEGIC AREA advances have been or are being in - (6) years*. the project cycle reduces difficulties 2.1. Accelerating regional integration through sustained infrastructure investment tegrated into the corresponding in project implementation and pro - 2.2. Support for inclusive growth, food security and sustainable development project loans; ii) one (1) project fi - motes the sustainability of infra - 2.3. Support for businesses and governments, nanced by other funders and for Between 2013 structure. development of financial engineering and services which the cash advance granted 2.4. Deepening the resource mobilization process will be repaid by the Borrower, in and 2018, The Bank's continued financing of 2.5. Aligning management and governance accordance with the agreement. XOF13.5 billion studies to strengthen the quality of THEME FOR THE YEAR Out of a total amount of XOF11.2 implementation and sustainability SOLAR ENERGY billion granted to member countries were spent on of infrastructure is therefore a IN THE WAEMU ECONOMIES between 2013 and 2017 to finance financing public necessity. In December 2018, the operational studies, a total amount WAMU Council of Ministers of XOF2.3 billion has been recovered project studies. renewed the six-year endowment to date, under studies completed in order to support the Bank's and integrated into loans. activities in this area.

* The allocation of funds for this category of activities is based on allocation chains renewed every 6 years.

As at 31 December 2018, annual disbursements stood at At the same date, the total cumulative disbursements XOF292.5 billion, compared to XOF309.6 billion in 2017. amounted to XOF3,308.0 billion, corresponding to a cu - mulative disbursement rate of 62.3% (cumulative disbur - sements/cumulative commitments). LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 30 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

ACHIEVEMENTS PER 2 STRATEGIC AREA

The Bank's achievements in 2018, based on its areas of intervention in the 2015-2019 strategic plan, are presented below.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 31 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT 2.1. ACCELERATING REGIONAL INTEGRATION THROUGH SUSTAINED INFRASTRUCTURE INVESTMENT SECTION TWO ACHIEVEMENTS IN 2018 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through sustained infrastructure investment As part of its support for efforts to integrate the Union's economies, two complementary categories 2.2. Support for inclusive growth, food security of actions are generally carried out: the financing of regional projects and the monitoring of regional and sustainable development 2.3. Support for businesses and governments, activities, in synergy with the other Community institutions or bodies. development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY A. DEVELOPMENT AND INTERCONNECTIVITY These funds will facilitate the construction of an IN THE WAEMU ECONOMIES OF TRANSPORT INFRASTRUCTURE overall stretch of 18.4 km, contributing to progress in regional integration, particularly by i) improving In the area of transport infrastructure, the Bank granted traffic on Community roads included in the PACITR, loans totaling XOF38.7 billion for the implementation of a component of the PER 2, and ii) developing intra- three integrative road projects in Mali, Niger and Burkina regional trade. Faso.

• Financing in the road transport sub-sector tota - • In the port sub-sector , a contribution of XOF3.7 ling XOF35 billion has been granted , in Mali, for billion was made for the extension of the Bobo the construction of an interchange and an overpass, Dioulasso dry dock in Burkina Faso. This project will as well as for the development of roads in the city support the growth of trade flows between the of Sikasso, and in Niger, for the asphalting of the landlocked countries and the seaports. Zinder road, which forms a link in the trans-Saharan road linking Algiers to Lagos.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 32 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT B. IMPLEMENTATION OF REGIONAL STRATEGIES The Bank also participated in the validation workshop of SECTION TWO AND PROGRAMMES the interim evaluation report on France's overall budget ACHIEVEMENTS IN 2018 1. GENERAL PICTURE support to WAEMU, held from 10 to 14 December 2018 2. ACHIEVEMENTS PER STRATEGIC AREA In collaboration with the other Community institutions or in Lomé (Togo). Part of this support was used to subsidize 2.1. Accelerating regional integration through bodies of the Union, the Bank contributes to the initiation BOAD loans granted to the member countries. sustained infrastructure investment 2.2. Support for inclusive growth, food security and subsequent monitoring of various programmes selec - and sustainable development ted at Community level. These programmes include: PER II, The Bank's actions in relation to IRED have involved the 2.3. Support for businesses and governments, development of financial engineering and services IRED, the Food Security Programme, the ECOWAS Com - management of the EDF and the continued implementa - 2.4. Deepening the resource mobilization process munity Development Programme (CDP), the 11th EDF Re - tion of projects financed by the EDF. Disbursements as at 2.5. Aligning management and governance gional Indicative Programme (RIP) and the WAEMU High the end of December 2018 stood at XOF132.1 billion, or Level Specialised Care Centres Project (HSSHN). 76.9% of the total amount pledged. THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES Under PER II , the Bank is participating in the process of The Bank also contributed to the preparation and establishing a multi-donor trust fund to support the fi - organization of meetings of the Technical Commit - nancing of projects under the PER. In this regard, the tee, the Steering Committee and the Donors' Coun - Bank has proposed a draft Resolution for the creation of cil. the Fund. The document sent to other members of the ad hoc Steering Committee is currently being reviewed Under the food security programme , the Bank parti - for finalisation and adoption of the regulations of the cipated in the 7th meeting of the High Level Panel of Ex - fund (Decision to create and advocacy document with perts on Food and Nutritional Security (HLPE) in the the TFPs). Work is also ongoing on the development of a WAEMU region, chaired by the President of Niger, H.E. new phase of the PER. Mr. Issoufou Mahamadou. The said meeting was held from 5 to 10 July 2018 in Niamey, Niger, with the objec - Some PER projects have been granted an interest rate tive of identifying appropriate ways of promoting food subsidy as part of France's Budget Support (GBS) to security and sustainable agricultural processing in the WAEMU. The Bank finalized the draft tripartite grant WAEMU region. agreements for Benin, Burkina Faso, Mali, Senegal and Togo (Commission-BOAD-Member countries). All these tripartite agreements have been signed.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 33 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

Some of the key recommendations that emerged were During the meeting , the COS reaffirmed its willingness

SECTION ONE as follows: i) support the regional mechanism for moni - to see the development banks participate in the delegated ECONOMIC AND SOCIAL ENVIRONMENT toring, evaluation and impact analysis of national management of EU funds, if they satisfy the requirements response plans, with a view to better guiding decision- for the "7 pillar assessment". SECTION TWO making in this area; ii) promote effective institutional and ACHIEVEMENTS IN 2018 regulatory frameworks for the supervision and coordina - Lastly, as part of the WAEMU high-level specialized 1. GENERAL PICTURE tion of interventions in the field of food and nutrition healthcare centre project (PCSSHN), the Bank and the 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through security and resilience (code of good conduct); WAEMU Commission decided, at a meeting in January sustained infrastructure investment iii) assist Member countries in mobilizing resources for the 2018, to set up a consultative framework. A draft terms 2.2. Support for inclusive growth, food security and sustainable development implementation of National Response Plans and Transhu - of reference for the framework was submitted to both 2.3. Support for businesses and governments, mance Management Plans; iv) assist Member countries institutions. The two institutions also held a meeting in development of financial engineering and services in mobilizing the necessary resources to intensify the Lomé on 25 and 26 October 2018 to formalize the 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance implementation of key programmes. consultative framework and draw up a roadmap for the implementation of the project. THEME FOR THE YEAR With regard to the ECOWAS Community Develop - SOLAR ENERGY ment Programme (CDP), following the adoption of BOAD study fund and the funds that may be provided by IN THE WAEMU ECONOMIES the Regional Strategy Paper , the ECOWAS Authority partners were identified as two sources of funding for of Heads of State and Government had instructed the the studies required to carry out the project. BOAD is ex - ECOWAS Commission to initiate actions to mobilize the pected to provide cash advances totaling XOF2.3 billion required funding. This led to the adoption of the princi - in 2019 for the studies. Given the limited amount availa - ple of organizing a Round Table. ble, BOAD approached the Japan International Coopera - tion Agency (JICA), considering its operations in this type The Bank took part in the 5th meeting of the Strategic of initiative. Consultations are ongoing. Orientation Committee (COS) of the 11th European De - velopment Fund (EDF) in Brussels in June 2018 under the Regional Indicative Programme (RIP) of the 11th EDF.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 34 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 2.2. SUPPORT FOR INCLUSIVE GROWTH, FOOD SECURITY SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT AND SUSTAINABLE DEVELOPMENT

SECTION TWO ACHIEVEMENTS IN 2018 As in the previous year, the Bank's financing for inclusive and sustainable growth was significant. 1. GENERAL PICTURE Interventions in this area included strengthening basic infrastructure and promoting sustainable 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through development. sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process A. DEVELOPMENT OF BASIC INFRASTRUCTURE In the area of urban roads, inter-urban roads and sa - 2.5. Aligning management and governance nitation , six projects have received support, for a total A total of XOF252.3 billion has been provided to amount of XOF99.5 billion. These include: i) the rehabi - THEME FOR THE YEAR SOLAR ENERGY strengthen basic infrastructure. These funds will be litation of the Kédougou-Fouladou road in Senegal, ii) the IN THE WAEMU ECONOMIES used to: i) develop hydro-agricultural facilities, as development and asphalting of the Zinder urban road well as roads and sanitation, ii) promote electrifica - network in Niger, iii) the development and asphalting of tion in both urban and rural areas, iii) increase ac - the Blouf loop in Senegal, iv) the Cotonou rainwater sa - cess to drinking water for the population, iv) build nitation programme, v) the storm drain of the Bangr social amenities (social housing, education) and, v) Wéogo Park in Burkina Faso, vi) and the integrated reha - boost local economies. bilitation and development of the Gorou watershed in Côte d' Ivoire. Two hydro-agricultural development projects, worth a total of XOF25.5 billion , were approved for Côte The road projects referred to above cover a total distance d'Ivoire and Togo respectively. These projects will involve of 152 km and will improve the living environment and the development and rehabilitation of approximately transport conditions in the affected areas. This will lead to 11,546 ha of farmland, to increase food production ca - an improvement in the competitiveness of the areas pacity by approximately 12,600 tonnes, as well as the concerned, improve access to such areas and enhance creation of 6 dams. their economic potential. Sanitation projects will provide the necessary investments to sustainably mitigate flooding The funds provided will help achieve food and nutritional in cities across the Union and to improve the urban envi - security, as well as alleviate poverty in the project areas. ronment. Approximately 13,410 linear metres (ml) of pri - This is expected to result in: i) an increase in agroforestry mary collectors will be built. and fisheries production, ii) capacity building for stake - LIST OF ACRONYMS AND ABBREVIATIONS holders, as well as iii) the creation of 43,471 direct or LIST OF ANNEXES indirect jobs. ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 35 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

In the area of urban and rural electrification , a total In Benin, 944 social housing units were built in the muni - SECTION ONE of XOF22.9 billion has also been provided for the cipality of Abomey-Calavi. The project will contribute to an ECONOMIC AND SOCIAL ENVIRONMENT construction of a 15 MW diesel thermal power plant in improvement in the living environment of about 7,300

SECTION TWO Bor, Guinea Bissau and the rehabilitation of power distri - people in the middle-income bracket. ACHIEVEMENTS IN 2018 bution facilities in Burkina Faso. 1. GENERAL PICTURE Two of such projects in Senegal involve the construction 2. ACHIEVEMENTS PER STRATEGIC AREA These projects, expected to create around 7,600 direct of 500 classrooms to replace temporary shelters and the 2.1. Accelerating regional integration through sustained infrastructure investment and indirect jobs, are intended to boost the country's construction of a 20-storey multifunctional tower. These 2.2. Support for inclusive growth, food security energy production capacity and improve access to elec - projects will strengthen the quality of education in the and sustainable development tricity. country on the one hand and the supply of office space 2.3. Support for businesses and governments, development of financial engineering and services on the other hand, benefiting at least 2,300 employees 2.4. Deepening the resource mobilization process With respect to improving access to safe drinking working in Dakar. 2.5. Aligning management and governance water , a total of XOF30 billion has been allocated to two projects to strengthen drinking water supply systems. The As part of a revitalization of local economies , an THEME FOR THE YEAR objective of these projects, one in Côte d'Ivoire and the amount of XOF30 billion has been granted to Burkina SOLAR ENERGY IN THE WAEMU ECONOMIES other in Togo, is to ensure a sustainable supply of safe Faso to finance its Programme to Support the Develop - drinking water to certain populations in the city of Abid - ment of Local Economies. The financing will make it pos - jan and semi-urban centres in Togo respectively. sible to: i) provide integrated local development kits, ii) arrange a credit facility of XOF25 billion for a credit Three projects in other social sectors (social housing, programme, iii) build the capacity of 48,000 informal real estate development and education) were production units. financed to the tune of XOF44.4 billion.

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SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Sanitation and combating flooding in WAEMU member countries Some of the recurring natural disasters in the WAEMU region, which impede development programmes and cause SECTION TWO significant losses, both in the public domain and on private property, are droughts and floods. Floods often have less ACHIEVEMENTS IN 2018 impact than droughts, but they remain just as devastating and costly. A visualization proposed by an international 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA reinsurer can be summarized as follows, in terms of risks per country. 2.1. Accelerating regional integration through sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development In 2012, a WHO study indicated that ted, during 2018, to the financing of programme for Cotonou in Benin”, 2.3. Support for businesses and governments, development of financial engineering and services for every dollar (about XOF570) three sanitation projects, for a total ii) the “integrated development and 2.4. Deepening the resource mobilization process invested in sanitation, $5.5 amount of nearly XOF60 billion. The management of the Gourou water - 2.5. Aligning management and governance (XOF3,135) is obtained in return projects involved are as follows: shed in Côte d'Ivoire”, and from lower health expenditures, pro - i) the “rainwater sanitation iii) the “project to strengthen the THEME FOR THE YEAR ductivity gains and fewer premature SOLAR ENERGY IN THE WAEMU ECONOMIES deaths.

Flooding Drought Sanitation is therefore a factor of de - velopment. For this reason, it is in - Togo Guinea Bissau cluded in the sustainable 4.3 2.6 3.3 2.1 development goals, particularly in re - lation to SDG 6. Countries in the 4.8 7.5 Senegal 5.6 1 Côte d’Ivoire WAEMU region are regularly confronted with flooding that occurs during the rainy season, making 7.4 6.6 Niger 4.6 6 Burkina Faso people very vulnerable. Only 26% of these populations had access to 7 5.1 Mali 5.1 0.5 Benin basic sanitation in 2015 6.

In line with its objective of suppor - Risk Risk and low 010and high ting sustainable development and costs costs inclusive growth, particularly by Source : Swiss Re data, Rating according to the index for Risk Management sponsored by Inter-Agency Standing contributing to the strengthening of Committee (IASC) basic infrastructure, BOAD contribu - LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES 6 Source : World Health Organization report on " Progress in water, sanitation and hygiene: 2017 update and SDG estimates " ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 37 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT INSERT 2 (continued )

SECTION TWO stormwater drainage network in contribution to the implementa - a road network. The Bank contribu - ACHIEVEMENTS IN 2018 Ouagadougou: drainage of the tion of the emergency phase of the ted XOF29.5 billion to the financing 1. GENERAL PICTURE Bangr Wéogo Park in Burkina Faso”. project is XOF20 billion. of the first phase of the project.. 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through sustained infrastructure investment The purpose of the Cotonou In Côte d'Ivoire, the objective of Finally, with regard to the project to 2.2. Support for inclusive growth, food security and sustainable development stormdrain rehabilitation project the integrated development and strengthen the rainwater sanita - 2.3. Support for businesses and governments, is to build approximately 13,410 li - management programme for the tion network in Ouagadougou , development of financial engineering and services near metres of primary collectors in Gourou watershed is to contribute divided into four (4) phases, the 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance Cotonou, in eleven (11) catchment to strengthening and securing the Bank had already set up two (2) areas between Cotonou East and sanitation network in the Abidjan loans for a total amount of XOF18 THEME FOR THE YEAR Cotonou West, as well as to pave District by improving the socio-eco - billion, in 2010 and 2012. The third SOLAR ENERGY some sections supporting the said nomic and health conditions of the phase, financed to the tune of IN THE WAEMU ECONOMIES collectors. populations of the four (4) com - XOF10 billion in 2018, aims to deve - munes covered by the Guru water - lop the outlet inside and downs - Investments to be made are aimed shed, namely Abobo, Adjamé, tream of the Bangr Wéogo Park, by at preventing flooding in the wa - Cocody and Plateau. The implemen - recalibrating several pond. It will si - tersheds concerned in a sustaina - tation of this project will make it gnificantly reduce the impact of floo - ble way and at improving the possible to solve the problems of re - ding in the Bangr Wéogo park, while urban environment, in order to fa - current flooding in the heart of strengthening the sustainability of cilitate the movement of users and Abidjan, through the installation of investments already made. the conduct of economic activities a wastewater treatment system, in the areas concerned. The Bank's stormdrain and the construction of

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SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT B. SUSTAINABLE DEVELOPMENT i) the project to hybridize diesel engines from multifunc - tional platforms to solar systems in Togo, which was SECTION TWO Various activities were pursued with a view to operatio - approved in 2017 for grant funding of USD2.7 million. ACHIEVEMENTS IN 2018 nalizing the Bank's accreditation to the UNFCCC financial The project grant management agreement was signed 1. GENERAL PICTURE mechanisms. between the Bank and the Togolese Government on 2. ACHIEVEMENTS PER STRATEGIC AREA 12 October 2018; 2.1. Accelerating regional integration through sustained infrastructure investment The Bank, together with the Adaptation Fund (AF), de - 2.2. Support for inclusive growth, food security veloped and submitted the following comprehensive fi - ii) the regional project to support sustainable waste ma - and sustainable development 2.3. Support for businesses and governments, nancing documents for the following operations: nagement and reduce POPs emissions. A grant of development of financial engineering and services USD18.9 million is expected to be provided for the 2.4. Deepening the resource mobilization process i) the regional project to promote climate-smart agricul - project. Studies and a full financing proposal for this 2.5. Aligning management and governance ture in West Africa (USD14 million), in partnership with project are being prepared for submission and final

THEME FOR THE YEAR the ECOWAS Regional Agency for Agriculture and approval in the first quarter of 2019. SOLAR ENERGY Food (RAAF); IN THE WAEMU ECONOMIES Application for grants from the Green Climate Fund ii) the project to increase the resilience of farmers in (GCF) , for the preparation of development and scaling Manouri, Togo (USD10 million). of 1,500 ha of hydro-agricultural facilities, with practices resilient to climate change in Niger, was approved for an The grant allocated for the 1st project was finally ap - amount of USD439.134. In addition, two projects were proved by the AF Board of Directors in July 2018 for the prepared and submitted for financing by the Fund. These amount announced above. The grant agreement bet - are: i) the solar rural electrification project in Mali, for a ween BOAD and the AF was signed on 26 December total amount of €46.2 million, and ii) the regional cli - 2018. mate financing mechanism project, aimed at intensifying the use of solar energy in the least developed countries Two projects were submitted to the Global Environ - (LDCs) of French-speaking West Africa, for a total ment Facility (GEF) for approval, following the Bank's amount of €247 million. accreditation in 2015. These include:

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Other environmental and climate finance actions were At the same time, the Regional Collaboration Centre SECTION ONE also implemented during the year. This includes the (RCC 7) supported the Bank's actions in developing car - ECONOMIC AND SOCIAL ENVIRONMENT Bank's participation in the following events or rounds bon projects and climate finance, as well as in seeking SECTION TWO of negotiations: to mobilize climate finance resources. ACHIEVEMENTS IN 2018 1. GENERAL PICTURE i) A cycle of two structured Green Climate Fund dia - As part of the development of carbon projects and cli - 2. ACHIEVEMENTS PER STRATEGIC AREA logues with Africa in Bamako, Mali, and with LDCs in mate finance, the RCC continued its assistance to the 2.1. Accelerating regional integration through sustained infrastructure investment Addis Ababa, Ethiopia. development of standardized baselines, in particular, by 2.2. Support for inclusive growth, food security updating the non-renewable biomass factor in Benin. and sustainable development 2.3. Support for businesses and governments, BOAD's participation in these meetings was aimed at development of financial engineering and services strengthening its engagement with the Fund and In the area of climate finance resource mobilization, the 2.4. Deepening the resource mobilization process member countries, and facilitating interactions on po - RCC provides assistance to WAEMU countries to finance 2.5. Aligning management and governance tential project pipelines at the national and regional le - projects with a climate component. It also contributed vels. It also enabled a better understanding of the to the Bank's accreditation as an observer to the Inter - THEME FOR THE YEAR SOLAR ENERGY priorities of the different stakeholders and to share the national Capital Market Associations, as part of the IN THE WAEMU ECONOMIES views and experiences of other partners in the prepa - green bond issuance project. ration and implementation of climate projects. The RCC, in collaboration with the Nairobi Framework ii) The 24th COP on climate change held in Katowice, Partnership, held the 1st edition of the African Climate Poland. Week in April 2018 in Nairobi, Kenya. With the UNFCCC and Young Volunteers for the Environment In addition, the environmental and social dimension was (JVE), the Centre signed a memorandum of understan - taken into account in the evaluation of the projects finan - ding for the establishment of a training academy for ced, in accordance with the guidelines of the institution's young African leaders on climate change issues, inclu - policy in this area. ding the negotiation aspects contained in climate change agreements.

7 An entity hosted by BOAD, and stemming from cooperation with the United Nations Framework Convention on Climate Change. LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 40 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 2.3. SUPPORT FOR BUSINESSES AND GOVERNMENTS, SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT DEVELOPMENT OF FINANCIAL ENGINEERING AND SERVICES SECTION TWO ACHIEVEMENTS IN 2018 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through A. PROMOTING PUBLIC-PRIVATE PARTNERSHIPS (PPP) A limited shopping is also under way with respect to the sustained infrastructure investment study to propose innovative financial instruments to facili - 2.2. Support for inclusive growth, food security and sustainable development As part of the promotion of public-private partnership pro - tate the financing of PPPs in WAEMU. Similarly, a consul - 2.3. Support for businesses and governments, jects, the Regional PPP Project Development Unit (URDPPP) tant was recruited by the Bank to set up an information development of financial engineering and services implemented the following actions: i) participation in re - and exchange platform. 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance gional projects; ii) preparation of a study to propose inno - vative financial instruments to facilitate PPP financing in the With regard to capacity building for PPP actors , sec - THEME FOR THE YEAR WAEMU region; iii) capacity building for PPP actors at toral technical experts working in the PPP Units of Mali SOLAR ENERGY member country level; iv) creation of an information and and Senegal have received training in the following areas: IN THE WAEMU ECONOMIES consultative platform; v) appraisal and promotion of PPP i) socio-economic evaluation of projects; ii) financial ana - projects; vi) organization of meetings of the Advisory Com - lysis of projects; iii) quantitative analysis for the selection mittee on PPP (CO-PPP). of the project implementation scheme and the use of the financial benchmarking model; iv) qualitative analysis of As part of the regional projects , the URDPPP participa - the different modes of project implementation. ted, as a member of the WAEMU Commission's PPP Wor - king Group (PPP-WG), in meetings of sectoral experts and The URDPPP also participated, as a trainer, in the training of ministers involved in the approval of draft PPP strategies session organized by the Regional Higher School of Magis - and the Community PPP Directive. In addition, it finalized tracy (ERSUMA), which was targeted at PPP players in the the first version of two draft Regulations, on the institutio - OHADA area. nal framework and operations of the Unit at regional level'' as well as on the Units implementation of regional PPP pro - With regard to the appraisal and promotion of PPP jects'. These two draft Regulations were the subject of projects , the dry dock projects in Kayes and Sikasso (Mali) inter-institutional consultations between Community insti - and the Environmental and Natural Resources Manage - tutions, before their submission to the WAEMU Commis - ment Support Project (Senegal) underwent qualitative and sion for submission to the Council of Ministers in 2019. quantitative analysis. The exercise resulted in a pre-selec - tion and a comparative analysis of the implementation me - thods of these projects.

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In addition, the URDPPP held a workshop to validate the Consultation Framework set up between the Bank and

SECTION ONE Preliminary Summary Project (PSA) studies for the the WAEMU Commission. ECONOMIC AND SOCIAL ENVIRONMENT construction of parking facilities for heavy duty and cargo trucks on both sides of the Benin-Togo border (i.e. San - Lastly, the URDPPP held the seventh session of the SECTION TWO veecondji and Hillacondji). The conclusions and recom - Advisory Committee on PPPs (CO-PPP), a forum for ACHIEVEMENTS IN 2018 mendations of the study were forwarded to the sharing experience on PPPs in the Union. It also held a 1. GENERAL PICTURE authorities of Togo and Benin for decisions to be taken workshop on the sidelines of the meeting, in partner - 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through before the possible continuation of the project. ship with the WAEMU Commission, to present and dis - sustained infrastructure investment seminate the study on capacity building for PPP 2.2. Support for inclusive growth, food security and sustainable development At the same time, the Unit continued its work on the development in WAEMU. 2.3. Support for businesses and governments, PCSSHN project, participating in the work of the development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY INSERT 3 IN THE WAEMU ECONOMIES

Building capacity to develop PPPs in WAEMU

The World Bank financed a study on this issue with the active participation of BOAD.

The study seeks to: i) strengthen the thening; ii) building a portfolio of the institutions involved in the im - regional institutional framework for PPP projects; iii) financing strategy. plementation of PPPs in each coun - PPP implementation, ii) contribute to try and to identify capacity building the harmonization of PPP strategies, Work on the first component in - needs. The component report re - and iii) facilitate the development cludes an assessment of the dispa - commended the definition of an and implementation of PPP projects rities between the draft regional institutional framework for the de - in the WAEMU region. directive and the national laws go - velopment and implementation of verning PPPs. The analysis of the regional projects, as well as the es - It has been divided into three distinct current practice made it possible to tablishment of a flexible legal fra - components: i) institutional streng - assess the experience and skills of mework that could be adapted to LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 42 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 3 (SUITE)

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT the specific features of each project detailed analysis of the funding ins - - mobilizing dedicated teams with SECTION TWO and that is compatible with national truments for project preparation. good experience in PPP structuring; ACHIEVEMENTS IN 2018 regulations. 1. GENERAL PICTURE The recommendations include: - leveraging on the resources of De - 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through The second component made it pos - velopment Finance Institutions, sustained infrastructure investment sible to build a portfolio of projects - aligning the country definitions of which remain the main financiers 2.2. Support for inclusive growth, food security and sustainable development likely to be developed under PPPs in PPPs with the regional definitions; of infrastructure projects in sub- 2.3. Support for businesses and governments, WAEMU, and also identify two prio - Saharan Africa; development of financial engineering and services 2.4. Deepening the resource mobilization process rity projects. However, the analysis - improving project preparation; 2.5. Aligning management and governance carried out only made it possible to - seeking alternative sources of fi - identify a regional project within the - strengthening the analysis of the nancing (green finance, resources THEME FOR THE YEAR meaning of the definition contained budgetary sustainability of PPP from emerging countries, particu - SOLAR ENERGY in the draft Directive. In addition, the projects; larly Islamic finance and Asian IN THE WAEMU ECONOMIES 18 MW Gourbassi hydroelectric financing); power project in Mali, which is being - strengthening the measurement of carried out by OMVS, has under - countries' commitments; - using blending finance instruments gone extensive financial study. that are tailored to project profita - - training and providing technical bility and risk (provision of invest - The third component studies the support to the various countries in ment grants, mobilization of modalities of PPP financing in the the structuring of their projects; guarantee or risk hedging tools); WAEMU region, in order to develop recommendations for the mobiliza - - handling the first phases of project - examining the profitability of each tion of resources tailored to each development, from identification project in order to define an phase of project development. In to feasibility study; appropriate financing scheme. addition to reviewing the sources of funding available in the region, this - promoting competition and hand - component includes, as such, a ling informal offers, in accordance with the regional strategy;

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B. SUPPORT FOR THE DEVELOPMENT OF INDUSTRIES AND Five short-term operations worth a total of XOF31 SECTION ONE EMERGENCE OF REGIONAL COMPANIES billion were negotiated. These include: ECONOMIC AND SOCIAL ENVIRONMENT In terms of industrial development and the emergence - a XOF5 billion loan to a Malian state-owned textile SECTION TWO ACHIEVEMENTS IN 2018 of regional companies , four (4) direct loans totaling company to finance operating needs; 1. GENERAL PICTURE XOF57.5 billion were granted. These include i) the refurbi - 2. ACHIEVEMENTS PER STRATEGIC AREA shing works at the Hôtel 2 Février in Togo, ii) the expansion - a XOF6 billion loan to a company in Burkina Faso for the 2.1. Accelerating regional integration through of shea butter production plant in Burkina Faso, iii) the es - import of raw materials (clinker, limestone and gypsum) sustained infrastructure investment 2.2. Support for inclusive growth, food security tablishment of a cement factory in Côte d'Ivoire, and iv) for cement production; and sustainable development the expansion of the production capacity of a cement plant 2.3. Support for businesses and governments, development of financial engineering and services in Senegal. - a XOF10 billion credit facility to a bank in Burkina Faso 2.4. Deepening the resource mobilization process to support the import of agricultural inputs; 2.5. Aligning management and governance Three (3) refinancing facilities totaling XOF20 billion were granted to financial institutions in the Union. These - a XOF5 billion credit facility to a Senegalese financial ins - THEME FOR THE YEAR will increase the capacity to offer products adapted to titution to refinance operations for the 2018-2019 agri - SOLAR ENERGY IN THE WAEMU ECONOMIES SMEs. In addition, a subordinated loan of XOF6.5 billion cultural year; was granted to NSIA Bank Benin. - A XOF5 billion credit facility to a Senegalese bank to The Bank's equity investments include four operations help finance the groundnut season. for a total amount of XOF13.5 billion. These operations include CAURIS IV, AFIG Funds II, ECP Africa Fund IV and Short-term financing is provided to strategic sectors, most of ADIWALE I. The Bank also acquired a XOF326.4 million which is directed towards agriculture, energy and industry. stake in Banque Régionale des Marchés (BRM) Holding SA, which is being created, through the partial transfer In the area of financing arrangements , the Bank mobili - of shares held in the capital of BRM. zed XOF68 billion for the following principals: i) Caisse des Dépôts et Consignation (CDC), for the construction of a

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 44 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 Graph 6 RÉPARTITION PAR DOMAINE DES FINANCEMENTS DE COURT TERME AU 31 DÉCEMBRE 2018 (EN MDS) SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Cumul financements court terme Financements court terme en 2018 SECTION TWO ACHIEVEMENTS IN 2018 33,9% 28,9% 80,6% Energie 1. GENERAL PICTURE Agriculture Agriculture 86,2 Mds FCFA 2. ACHIEVEMENTS PER STRATEGIC AREA 101,2 Mds FCFA et développement 2.1. Accelerating regional integration through rural sustained infrastructure investment 25 Mds FCFA 2.2. Support for inclusive growth, food security and sustainable development 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

12% 9,7% 15,5% 19,4% Finance Transport Industrie Industrie 35,7 Mds FCFA 29 Mds FCFA 46,2 Mds FCFA 6 Mds FCFA

20-storey multifunctional tower in Dakar, ii) PFO Africa various networks in Diamniadio; ii) Eranove SA, to build a Côte d'Ivoire, for the construction of a water treatment 65 MW thermal power plant in Togo; iii) Phoenix Properties plant for Abidjan, iii) the Senegalese government for the Investment, to build a 4-star hotel in Abidjan, under the construction of road and utility networks in Diamniadio. "Radisson Red" brand; iv) MK Construction and the Go - vernment of Côte d'Ivoire, for the reinforcement of the Ka - Also, steps are being taken to mobilize approximately nawolo-Korhogo road axis; v) the Government of Niger, for LIST OF ACRONYMS AND ABBREVIATIONS XOF270 billion for various borrowers: i) the Government additional works relating to the Hamani Diori interchange LIST OF ANNEXES of Senegal, to finance the construction of the roads and and the development of the Katako market area. ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 45 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 4

SECTION ONE Support for the expansion of cement production capacity in Senegal and Côte ECONOMIC AND SOCIAL ENVIRONMENT d’Ivoire

SECTION TWO In 2018, BOAD committed a total amount of XOF50 billion to support two cement projects in Côte d'Ivoire and ACHIEVEMENTS IN 2018 Senegal, with a total capacity of more than five (5) million tonnes and a total cost of XOF320.6 billion. 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through sustained infrastructure investment The first of the two projects involves (CIMIVOIRE), in Abidjan, Côte commitment to further work in the 2.2. Support for inclusive growth, food security the expansion of the production ca - d'Ivoire. The clinker crushing capa - infrastructure and construction sec - and sustainable development 2.3. Support for businesses and governments, pacity of Les Ciments du Sahel (CDS) city of the installed unit will be 3 mil - tor. Indeed, in the subregion, the development of financial engineering and services SA, in Kirène, Senegal. This includes lion tonnes of cement per year. The targeted sector faces major chal - 2.4. Deepening the resource mobilization process the installation of a third integrated Bank's provided an amount of lenges, both in terms of the 2.5. Aligning management and governance and autonomous clinker and cement XOF25 billion to the project, which construction and upgrading of road production line with a capacity of is expected to create 387 jobs during infrastructure and in terms of peo - THEME FOR THE YEAR SOLAR ENERGY 2.7 million tonnes of cement per implementation and 440 during ple's access to decent housing, IN THE WAEMU ECONOMIES year. BOAD's provided XOF25 billion operation. through housing projects or private for this project, which is expected to individual housing. create about 2,500 jobs during im - These projects are intended to in - plementation and 4,200 jobs during crease supply to meet the growing The implementation of the two pro - operation. demand at the national and regio - jects will also lead to an improve - nal level, and to substitute competi - ment in tax revenues in the two The second project involves the ins - tive domestic production for countries directly involved. tallation of a cement production unit imports. BOAD's collaboration in by CIMENTS DE CÔTE D'IVOIRE their implementation confirms its

BOAD provided a total of XOF159.8 million in grants The projects supported include: i) capacity building, as financial assistance to member countries and regional ii) organization of steering committee meetings, document institutions. validation workshops, fora and iii) work on the preparation of programming documents.

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SECTION TWO ACHIEVEMENTS IN 2018 Key resource mobilization actions included the mobilization Development Bank to finance infrastructure projects 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA of credit facilities from partners and the strengthening of and productive private sector investments in WAEMU 2.1. Accelerating regional integration through cooperation. countries; sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development A. AGREEMENTS SIGNED IN 2018 - the proposal for a €50 million (XOF32.797 billion) credit 2.3. Support for businesses and governments, facility from the Belarus Development Bank, repayable development of financial engineering and services 2.4. Deepening the resource mobilization process With regard to the credit facilities , two agreements in 10 years, for the refinancing of projects using goods 2.5. Aligning management and governance were signed with the Arab Bank for Economic Develop - and services of Belarusian origin. ment in Africa (BADEA). These facilities were in THEME FOR THE YEAR respect of: C. RESOURCE MOBILIZATION ON CAPITAL MARKETS SOLAR ENERGY IN THE WAEMU ECONOMIES - the first loan of USD30 million (XOF16.9 billion) for one The Bank has been considering ways to explore other op - year and intended exclusively to finance imports of portunities in the international financial market and to WAEMU member countries from Arab countries; set up a mechanism for the repayment of its Eurobonds. It has worked on the implementation of a "Negotiable - the second, involving an amount of USD15 million European Commercial Paper (NEU-CP)" programme, (XOF8.5 billion) and repayable in 10 years, is intended to which involves issuing short securities on the French refinance private sector projects. money market. It has also engaged with external partners issuing green bonds, as well as with some regional finan - B. LOANS APPROVED BY THE BOARD OF DIRECTORS cial market players, with a view to issuing a medium-term green bond. During the year, two loan proposals were approved by the Board of Directors. These are as follows: In addition, in order to better control the conditions for the repayment of its Eurobonds, the Bank has decided - the proposal for a €30 million (XOF19.678 billion) cre dit to create a sinking fund. facility, repayable in 10 years, from the Austrian

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 47 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA D. SUBSIDIES concessional loan programme adapted to natural disas - 2.1. Accelerating regional integration through ters (PACAN) and the creation of a fund for digital trans - sustained infrastructure investment 2.2. Support for inclusive growth, food security The Bank has since December 2015 obtained approval formation in West Africa. These two initiatives are and sustainable development from its Board of Ministers to set up a subsidy mechanism expected to be supported by the German Government. 2.3. Support for businesses and governments, development of financial engineering and services for its concessional financing. In 2018, this mechanism 2.4. Deepening the resource mobilization process was increased by XOF28 billion, bringing the total subsidy The sinking fund is intended to help governments in 2.5. Aligning management and governance resources to XOF81.2 billion over the last three years French-speaking West African countries to develop their (2016-2018). IT systems in order to improve their productivity and ser - THEME FOR THE YEAR vices to the public. The Bank is expected to be an major SOLAR ENERGY IN THE WAEMU ECONOMIES E. COOPERATION AND PROMOTION OF PARTNERSHIPS player in the implementation of the project, as well as the Fund Manager. An identification mission to WAEMU Various discussions and reviews were conducted with tra - countries is scheduled for the first half of 2019, in order ditional partners on the upcoming organization of bila - to carry out a first summary assessment of digitization teral thematic meetings. This was the case with AFD, KfW needs. and BADEA. In addition, the Bank is pursuing its efforts to submit to The Bank has also initiated technical discussions with an audit of the 7 pillars in order to be eligible for indirect KfW on two operational issues: the establishment of a management of European Union financing.

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SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT A. LEGAL CERTAINTY OF OPERATIONS Furthermore, with a view to aligning risk management SECTION TWO related to money laundering and terrorist financing with ACHIEVEMENTS IN 2018 1. GENERAL PICTURE As part of the legal security of operations, the actions fo - the relevant regional and international recommendations, 2. ACHIEVEMENTS PER STRATEGIC AREA cused mainly on the following points: an updated version of the Bank's financial security policy 2.1. Accelerating regional integration through was adopted by its Board of Directors in December 2018. sustained infrastructure investment 2.2. Support for inclusive growth, food security As part of the legal security of operations, the actions fo - and sustainable development cused mainly on the following points: 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process regulatory monitoring to align the Bank's activities B. MARKETING AND COMMUNICATION • 2.5. Aligning management and governance with the normative frameworks applicable to in - ternational financial institutions; In the area of communication , the Bank has updated THEME FOR THE YEAR its communication and public relations strategy by adop - SOLAR ENERGY management of guarantees taken to hedge finan - ting a modus operandi for its presence on social net - IN THE WAEMU ECONOMIES • cing, particularly, by continuing the global review works. The new communication strategy is designed to and evaluation of the Bank's hedges in the various "affirm and promote BOAD's leadership" in financing WAEMU countries; major development projects in the WAEMU region.

legal procedures to clean up the downgraded loan In keeping with this ambition, the Bank has developed • portfolio; and implemented a media plan based on three types of media; those with a broad audience, those that can be review of BOAD's environmental and social com - used as a complement and those that offer opportunities • pliance verification system and grievance proce - for visibility. The objective is to have a more structured dure, which is one of the mechanisms for the presence of BOAD in various media spaces, thus making structured and continuous management of risks it possible to intensify and better organize the dissemi - and environmental and social impacts associated nation of information on its activities and products, both with projects financed by the Bank. in the WAEMU region and for its international partners.

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The media presence thus enabled the Bank's manage - journalists and local authorities on "BOAD's strategy and SECTION ONE ment to participate effectively in high-profile TV pro - involvement in climate finance". The event also featured ECONOMIC AND SOCIAL ENVIRONMENT grammes, in particular "Réussite" by Canal Plus, an open forum with private sector stakeholders. "Décryptage" by Africa 24 and "Focus" by Africanews. SECTION TWO ACHIEVEMENTS IN 2018 The same applies to the regular publication of editorial The Bank reviewed and updated its marketing strategy 1. GENERAL PICTURE content in pan-African news media such as Jeune with a view to improving its sales approach and 2. ACHIEVEMENTS PER STRATEGIC AREA Afrique, Financial Afrik, La Tribune Afrique, Ecofin, as well customer relations. 2.1. Accelerating regional integration through sustained infrastructure investment as in-flight magazines on Brussels Airlines, Ethiopian Air - 2.2. Support for inclusive growth, food security lines, Air Côte d'Ivoire, Asky Airlines. The Bank also continued to promote its products and ser - and sustainable development vices through participation in trade fairs, fora and other 2.3. Support for businesses and governments, development of financial engineering and services The Bank also produced monthly reports in the 8 thematic meetings. As part of efforts to increase its visi - 2.4. Deepening the resource mobilization process WAEMU countries, as well as radio reports on various bility, poster campaigns on advertising spaces and in bu - 2.5. Aligning management and governance projects financed in Senegal, Côte d'Ivoire and Togo, siness lounges at some WAEMU airports have been which gave an opportunity to the project beneficiaries to initiated. THEME FOR THE YEAR highlight the impact of BOAD financing on their daily SOLAR ENERGY IN THE WAEMU ECONOMIES lives. The Bank also produced a new corporate video, with short versions in radio and television spots on its C. HUMAN RESOURCES areas of intervention and products. Previously undertaken actions in the area of human re - As part of its digital strategy, the Bank carried out an SEO sources management policy modernization have been (Search Engine Optimization) audit in order to improve continued. Thus, the implementation of the system for the referencing of its website. It also focused on using setting objectives and evaluating staff performance has social networks (Facebook, Twitter, Youtube) been strengthened. The same was true of targeted indi - to extend the reach of its publications to new targets, ge - vidual or collective training actions, all aimed at nerate interest and attract audience on these pages. capacity building.

As part of its press relations and non-media promotional As at 31 December 2018, BOAD had a total staff com - activities, the Bank held open days in Dakar, Senegal. plement of 308, including 295 operational staff, 10 This was in the form of an information workshop for seconded staff and 3 on leave of absence.

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SECTION ONE Table 2 ECONOMIC AND SOCIAL ENVIRONMENT STAFF STRENGTH OF BOAD BETWEEN 2016 AND 2018

SECTION TWO ACHIEVEMENTS IN 2018 Category Staff strength as at Staff strength as at Staff strength as at 1. GENERAL PICTURE 31.12.2016 31.12.2017 31.12.2018 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through PROFESSIONAL STAFF 153 164 170 sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development SUPPORT STAFF 119 112 125 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process TOTAL 272 276 295 2.5. Aligning management and governance

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

The change in the number of employees in 2018 is due Also, as part of its "Young Graduates" programme to to the implementation of the multi-year employment and foster smooth succession of its staff, the Bank recruited skills forward-planning programme. This plan, developed fourteen (14) young graduates from the community area on the basis of the 2015-2019 strategic plan, takes into and the diaspora, who are on professional internships in account i) the resourcing of staff, ii) the needs of the va - the organizational units. rious units and departments, iii) as well as the special skills required in the management of new activities. D. ASSET MANAGEMENT AND SAFETY OF PERSONS AND PROPERTY Thus, 34 new staff members, including 33 new recruits and one (1) on return from secondment, joined the Bank Actions undertaken in this area have focused on improving this year, while there were 15 departures for various rea - the working environment, continuing or completing cer - sons, representing an increase in the number of opera - tain building programmes and implementing the energy tional staff of 19 in comparison to 2017. efficiency programme.

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SECTION ONE In terms of improved working environment , changes i) rural development, ii) energy, iii) road infrastructure ECONOMIC AND SOCIAL ENVIRONMENT have been made, including: i) the rehabilitation of various and iv) drinking water supply. halls at headquarters and the creation of new SECTION TWO 8 ACHIEVEMENTS IN 2018 workspaces, ii) the cladding of the headquarters building, The overall objective of the country portfolio evaluation 1. GENERAL PICTURE iii) the enhancement of fire safety and access control sys - is to assess the development outcomes of projects finan - 2. ACHIEVEMENTS PER STRATEGIC AREA tems, iv) the renovation of the video surveillance system, ced by the Bank. The specific objectives include: i) asses - 2.1. Accelerating regional integration through sustained infrastructure investment v) further standardization of furniture in headquarters sing the impact of projects financed in each of the sectors 2.2. Support for inclusive growth, food security offices and resident missions.. concerned; ii) identifying the factors that have affected and sustainable development the performance of the projects; iii) making recommen - 2.3. Support for businesses and governments, development of financial engineering and services With regard to the real estate program , the construc - dations on the various interventions. 2.4. Deepening the resource mobilization process tion work on 134 housing units in the BOAD residential 2.5. Aligning management and governance area for staff members, as well as those related to the With regard to socio-economic impact assessments amusement centre, has been completed. and thematic assessments , the Bank continued, in col - THEME FOR THE YEAR laboration with the International Initiative for Impact Eva - SOLAR ENERGY IN THE WAEMU ECONOMIES The implementation of the energy efficiency pro - luation (3ie), the socio-economic impact assessment of gram continued with the replacement of office lamps with the Matam agricultural development project, phase 2 brighter and more compliant LED lamps. "extension" in Senegal, as well as the M'Bahiakro hydro- agricultural development project in Côte d'Ivoire. The se - E. MONITORING AND EVALUATION OF OPERATIONS AND cond surveys and analyses have been conducted. KNOWLEDGE MANAGEMENT The Bank's efforts in monitoring and evaluating de - In the area of ex-post project evaluation , the Bank velopment outcomes has led to activities designed to organized the portfolio evaluation validation contribute to i) a better assessment of the prospective im - workshop in Togo, which covered nineteen (19) projects pacts of nineteen projects and ii) the establishment of a spread over four (4) sectors of intervention. The Bank has system for collecting and analysing development out - also started country portfolio evaluation in Benin. This come indicators. In addition, the Bank provided various second evaluation exercise involves sixteen (16) opera - partners (AFD, KFW, AfDB, etc.) with the values of tions, divided into four (4) areas of intervention, namely: development outcome indicators for projects financed.

8 Refers to a set of projects/programs from one or more sectors of intervention within the same geographical area LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 52 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 5

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Quality of public investment expenditure in WAEMU member countries (*)

SECTION TWO ACHIEVEMENTS IN 2018 Since the start of the decade, WAEMU member countries have been developing key infrastructure in order to reduce deficits 1. GENERAL PICTURE in this area and sustainably improve living conditions for their populations. 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development In this regard, some countries are ai - governments and funders. It is to help where external resources account for 2.3. Support for businesses and governments, ming to scale up their investment from address this issue that the WAEMU 94% of investments due to govern - development of financial engineering and services a current average of around 24.5% to Commission, in collaboration with other ment's recourse to the (regional) ca - 2.4. Deepening the resource mobilization process at least 35% in order to place real Community institutions (notably BCEAO pital market; 2.5. Aligning management and governance growth on a sustainable footing above and BOAD), commissioned a study on the 7-8% threshold required to create the quality of Member States' public in - iii) Four sectors account for the bulk of THEME FOR THE YEAR jobs and reduce poverty . This explains vestment expenditure. The study was to investments: production support in - SOLAR ENERGY IN THE WAEMU ECONOMIES the ambition of the development plans examine the structural conditions that frastructure, rural development, adopted during the decade. must accompany an increase in public education and health; investment expenditure in order to pro - The Bank on its part is supporting these mote strong economic growth. Some of iv) The content of public capital expen - efforts. Over the last ten years, it has the findings or conclusions from this diture is not harmonized across granted, on average, XOF420 billion in study are as follows: WAEMU. yearly loans to its member countries. Current state of public capital ex - Macro-econometric analysis of the However, the Bank, like the internatio - penditure quality of public investment expen - nal financial community, does not lose diture sight of the fact that the investments i) There is a significant proportion of re - necessary to achieve the above-mentio - current expenditure in countries qua - Analyses show that investments, both ned objectives require significant lified “capital” expenditure. This is public and private, have a significant amounts of borrowing resources, and particularly the case with expenses and positive effect on economic activity that the sustainability of the resulting re - related to the operation of the pro - in most member countries. The effect payment conditions deserves attention. ject management units; is mixed for some countries, due mainly to crowding-out effects and/or Moreover, the overall quality of invest - ii) Domestic financing is growing com - poor management of public capital ments, as well as their real effects on pared to external financing, in all expenditure. growth, are matters of concern for both countries except Guinea Bissau

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES (*)Study on the quality of public capital expenditure in WAEMU member countries ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 53 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 5 (continued )

SECTION ONE Expenditure on human capital forma - and the IMF. The IMF study indi - successful implementation of their PIP ECONOMIC AND SOCIAL ENVIRONMENT tion is also a component with a direct cates, for example, that about projects and programmes. A strengthe - positive effect on growth. However, 40% of the potential impact of ning of public expenditure manage - SECTION TWO given the scale of needs, their share in public investment is lost. ment could also improve their efficiency ACHIEVEMENTS IN 2018 public investment remains low. and impact on growth. 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA Moreover, studies have showed that in - Recommandations In any case, all member countries 2.1. Accelerating regional integration through sustained infrastructure investment vestments are less effective in WAEMU should continue their investment ef - 2.2. Support for inclusive growth, food security countries than in reference countries. With the exception of Côte d'Ivoire, forts, particularly in energy and trans - and sustainable development This shows a stagnation, or even a de - which has achieved 80% of its priority port infrastructure, in agricultural 2.3. Support for businesses and governments, development of financial engineering and services cline in marginal capital productivity investment programme (PIP), the other mechanization and training of quality 2.4. Deepening the resource mobilization process over the recent period. WAEMU countries have low rates. human capital in order to support value 2.5. Aligning management and governance These countries should put in place me - chains in industry, agriculture and These analyses confirm the findings of chanisms to remove barriers to the services alike. THEME FOR THE YEAR other studies conducted by BCEAO SOLAR ENERGY IN THE WAEMU ECONOMIES

In terms of knowledge management , the Bank has F. GOVERNANCE, CONTROL SYSTEMS continued to operationalize its information monitoring, AND RISK MANAGEMENT visibility and image tools. In this regard, it has maintained the monitoring of relevant information sources, collected Year 2018 saw a strengthening of the Bank's governance useful knowledge on the areas of interest of its structures, and the continued upgrading of management tools. and analyzed information relating to its reputation on In - ternet and social networks. The Bank has also strengthe - Internal audit and financial control : in accordance with ned its monitoring system by setting up a monitoring the programme approved by the Audit Committee, audits system for its counterparties. were carried out on internal processes and ongoing pro - jects in the member countries. The recommendations

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 54 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

made make it possible to strengthen the internal control External audit : PRICEWATERHOUSECOOPERS (PWC),

SECTION ONE system, risk management and the improvement of the the External Auditor has reviewed and certified without ECONOMIC AND SOCIAL ENVIRONMENT project execution process. qualification the Bank’s, FDC and FDE accounts for the 2017 financial year. These accounts have been approved SECTION TWO All transactions for the acquisition of goods and services by the Council of Ministers. The firm also carried out a li - ACHIEVEMENTS IN 2018 as well as the disbursement of funds have been checked mited review of the interim financial statements as at 30 1. GENERAL PICTURE for compliance and legality. June 2018, in accordance with IAS 34 of the IFRS accoun - 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through ting framework. sustained infrastructure investment The Bank has also continued to update its internal audit 2.2. Support for inclusive growth, food security and sustainable development procedures in the light of developments in international Ethics, prevention and fight against fraud and cor - 2.3. Support for businesses and governments, standards and best practices in this area. ruption : the Bank continued to consolidate its measures development of financial engineering and services to combat fraud and corruption. This has been achieved 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance Bank Audit Committee : the Audit Committee held its by i) increasing the number of staff in the Ethics Division, three regular meetings during which it examined: ii) conducting training/sensitization sessions for staff of THEME FOR THE YEAR i) the financial statements for the year ended 31 Decem - that division, and iii) improving working tools. The Ethics SOLAR ENERGY ber 2017; ii) the summary statement of financing pro - Division dealt with various cases of compliance with the IN THE WAEMU ECONOMIES posals examined by the Bank in 2017; iii) the Staff Code of Ethics, as well as allegations of fraud, which interim financial statements of BOAD as at 30 June 2018 gave rise to recommendations for improving the preven - before their approval by the Board of Directors; iv) the tion system. outcome of the call for tenders for the appointment of the Bank's External Auditor for 2019 to 2021 inclusive; Procurement control : This involved both contracts fi - v) the balance sheet of activities for 2018 and the draft nanced as part of the Bank's operations and internal pro - programme of internal audit activities for 2019; vi) the curement. Training sessions were held on the Bank's situation of the Bank's portfolio as at 30 September procurement procedures for stakeholders in the public 2018; vii) the Bank's interim financial statements as at procurement chain in two member countries (Mali and 30 September 2018; viii) the status of follow-up on its Niger). Côte d'Ivoire, Togo and Guinea Bissau will receive recommendations; and ix) the status of follow-up on the the same training in 2019, following Benin, Senegal and implementation of the recommendations of the External Burkina Faso. Auditor. Result and performance-based management: the main The Bank will continue to strengthen its control mecha - pillars of the Bank's results and performance-based ma - nisms in 2019. As part of its continuous assurance and nagement system, namely the programme budget ap - quality improvement program (PAAQ), the internal audit proach, budgetary control, performance evaluation, the department will be evaluated by an external auditor to network of dashboards and management cost improve its services. accounting, were consolidated during the year. LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 55 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

The cost accounting management system was revitalized optimize communication amongst themselves and

SECTION ONE during the period, with the effective production of the with their external correspondents. ECONOMIC AND SOCIAL ENVIRONMENT 2016 and 2017 annual reports. In addition, the banking operations management ap - SECTION TWO As part of its efforts to continuously improve its informa - plication was reviewed and optimized on a more mo - ACHIEVEMENTS IN 2018 tion system, the Bank has developed and deployed a new dern technological platform in order to prepare for an 1. GENERAL PICTURE dashboard network management application. easy transition to SAP Banking. The Bank's staff has 2. ACHIEVEMENTS PER STRATEGIC AREA 2.1. Accelerating regional integration through As part of the monitoring of the Bank's overall perfor - also continued with the stabilization and appropria - sustained infrastructure investment mance, quarterly key performance indicators (KPI) analy - tion of the SAP modules already in operation. These 2.2. Support for inclusive growth, food security and sustainable development sis notes were produced, as well as summary notes of the include: finance and management control (FICO), 2.3. Support for businesses and governments, evaluations of responsibility centre performance human resource management (HR) and supply mana - development of financial engineering and services contracts. gement (MM). 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance The Bank continued to manage its credit, market and The deployment of a high value-added module for THEME FOR THE YEAR operational risks. personnel management, "Employer Self Service/Ma - SOLAR ENERGY nagers Self-Service (ESS/MSS)", continued with the IN THE WAEMU ECONOMIES In order to improve current practices, the portfolio rating implementation of functionalities such as i) the online models have been calibrated according to best practices, publication of pay slips, and ii) the online consultation with the development of new models for project finance, of personnel information. sovereign portfolio and equity investments. The reading of the rating system was thus linked to that of the inter - In terms of security , the Bank monitored technological national rating agencies. In terms of impairment of recei - developments and subsequently trained and certified vables, IFRS 9, which came into force internationally in some of its staff to ISO 27001 and ISO 27005 standards. 2018, has been implemented. All due diligence (intrusion test, IS security audit, etc.) was carried out in order to maintain the Bank's ISO 27001 G. UPGRADING THE IT SYSTEM certification of its WSIS.

During the year, the Bank continued to modernize and H. FINANCIAL MANAGEMENT secure its information system. Pricing and financial management : the Bank's pricing In terms of modernization , it has finalized the project model ensures greater flexibility in the pricing of opera - to interconnect its resident missions with headquarters tions subject to financing. through the implementation of an internal communi - cation network based on VSAT technology. New col - Also, the financial steering project launched in 2017 laboration and communication tools such as SKYPE continued in 2018. The changes expected as part of this LIST OF ACRONYMS AND ABBREVIATIONS FOR BUSINESS have been deployed. The various plat - project include i) an improvement in the management of LIST OF ANNEXES forms concerned enable the Bank's users to securely both on and off-balance sheet risks, ii) a strengthening ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 56 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 of financial reporting, combined with financial manage - Financial situation : the Bank's total balance sheet increa - ment control. sed from XOF2,573.5 billion as at 31 December 2017 to XOF2,568.2 billion as at 31 December 2018. SECTION ONE The feasibility study conducted as part of the first phase of ECONOMIC AND SOCIAL ENVIRONMENT the project was completed at the end of 2017. The second The Bank's financial situation remains sound, with a balanced phase relating to the operationalization of the financial ma - financial structure. At the end of December 2018, sharehol - SECTION TWO ACHIEVEMENTS IN 2018 nagement system began in the first half of 2018 and is ex - ders' equity represented approximately 27.6% of the balance 1. GENERAL PICTURE pected to be completed in the second half of 2018. sheet total and the ratio "outstanding borrowings/sharehol - 2. ACHIEVEMENTS PER STRATEGIC AREA ders' equity" (debt ratio) stood at approximately 240.9% for 2.1. Accelerating regional integration through a 300% statutory threshold. sustained infrastructure investment 2.2. Support for inclusive growth, food security and sustainable development 2.3. Support for businesses and governments, development of financial engineering and services 2.4. Deepening the resource mobilization process 2.5. Aligning management and governance Graph 7 Evolution of equity, debt (XOF'bln) and debt ratio THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 2000 300

DEBT EQUITY DEBT RATIO 261.9 260.2 240 1500 250

237.8 225 212

1000 200 197

181 168.5 500 155.8 150 145

LIST OF ACRONYMS AND ABBREVIATIONS 0 100 LIST OF ANNEXES 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS ACHIEVEMENTS IN 2018 57 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

The operation is characterized by the following key The overall gross deterioration rate of the portfolio SECTION ONE features: stood at 2.21% at the end of December 2018 compa - ECONOMIC AND SOCIAL ENVIRONMENT red to 2.34% at the end of December 2017. The Bank - a dominant share of loan income, which is the Bank's intends to continue to monitor and improve the quality SECTION TWO ACHIEVEMENTS IN 2018 main activity (75.02% of the budget income generated); of the portfolio. 1. GENERAL PICTURE 2. ACHIEVEMENTS PER STRATEGIC AREA - a generally controlled cost of borrowing resources (4.23% The Bank's operations continue to yield positive results, 2.1. Accelerating regional integration through on average, market resources and concessional resources despite the loss of embedded margins over the past sustained infrastructure investment 2.2. Support for inclusive growth, food security combined); few years due to the lack of sustainable concessional and sustainable development resources. Net profit at the end of 2018 stood at 2.3. Support for businesses and governments, development of financial engineering and services - a net banking income of XOF54.3 billion as at 31 XOF18.2 billion compared to XOF13.2 billion at 31 De - 2.4. Deepening the resource mobilization process December 2018 as against XOF37.4 billion as at 31 cember 2017. Part of this result will contribute to the 2.5. Aligning management and governance December 2017; replenishment of the subsidy mechanism, but a major part will be allocated to strengthening equity capital. THEME FOR THE YEAR - a prudent cash management in accordance with the SOLAR ENERGY IN THE WAEMU ECONOMIES liquidity policy; The Bank will continue to control its spending in order to maintain an attractive interest rate that meets the - the application of a prudent and proactive provisioning requirements of development financing. policy with the implementation of IFRS 9 based on the principle of "expected losses". It should also be noted that the capital adequacy ratio (internal approach) is 22.9%. The level of the Bank's capital remains in line with its risk level.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES RAPPORT ANNUEL 2018 TABLE OF CONTENTS MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU 3 SECTION TWO ACHIEVEMENTS IN 2018 THEME FOR THE YEAR

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES Solar energy in the WAEMU 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview economies: 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training overview of the situation, 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU challenges and prospects 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection

Solar radiation on More than 600 MW of The development of horizontal plane reaches grid-connected solar and solar energy is 2200 kWh/m²/year in wind power are being constrained by the LIST OF ACRONYMS AND ABBREVIATIONS WAEMU. generated in the area. structure of the energy LIST OF ANNEXES sector. ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 59 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 As part of the commemoration of its 45th anniversary, BOAD a total of XOF138.7 billion (13% of the Bank's financing in the HIGHLIGHTS OF 2018 held a forum on 14 and 15 November 2018 on the theme energy sector), and more specifically, seven solar energy pro - "Solar energy in the WAEMU economies: overview of the si - jects totaling XOF84 billion. However, the Bank has a lot to tuation, challenges and policies". achieve in the area of renewable energies, and especially solar SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT energy. The aim of this forum was to promote an emerging regional 1. INTERNATIONAL ECONOMIC ENVIRONMENT renewable energy economy, in general, and solar energy, in The November 2018 forum concluded that the WAEMU coun - 2. ECONOMIC ENVIRONMENT IN WAEMU particular. The choice of theme also reflected the Bank's com - tries can, with solar energy, quickly achieve very competitive mitment to contribute to the implementation of the objec - kWh costs, in line with developments observed at the inter - SECTION TWO ACHIEVEMENTS IN 2018 tives of the Regional initiative for sustainable energy (IRED) national level. adopted by the WAEMU Conference of Heads of State and Government in 2009. In an increasing number of countries, solar energy is now the THEME FOR THE YEAR cheapest source of electricity, and examples of solar installa - SOLAR ENERGY IN THE WAEMU ECONOMIES One of these objectives is to significantly increase, over the tions exist in all sectors, with proven reliability for all power 1. SOLAR ENERGY IN THE ECOSYSTEM next few years, the rate of access to electricity and the share levels, from Watt to GW, kW and MW. As for the steady de - OF THE WAEMU REGION of renewable energies in the energy mix of WAEMU member cline in the cost of solar energy, it is expected to continue, 1.1. General overview countries. and a further halving is expected by 2030. 1.2. The ambivalent interest of off-grid solar applications Currently, the rate of access to electricity in these countries is Apart from the attractiveness of a lower cost for power ge - 1.3. Technical capacity and training about 40.1% on average, and 14.7% for rural areas. These neration, there could also be a de-correlation of this cost with 1.4. Local manufacturing of solar equipment rates are even lower than the sub-Saharan averages of hydrocarbon prices, as well as advances in terms of energy 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 42.8%, in general, and 24.8% for rural areas. independence. In addition, an improvement in the solar 2.1. Lack of institutional organization energy rate, in the countries' energy mix, would ease public 2.2. Legal and regulatory uncertainties However, energy is a crucial driver of economic growth and finances in the face of the structural deficits of public electri - 2.3. Considerable technical constraints improved quality of life. The conditions of its production, dis - city supply companies. tribution or accessibility increasingly determine the relevance 2.4. Difficulties for operators to access financing of public ambitions and policies aimed at inclusive and sus - A trend such as the one mentioned above could even, in the 3. PRIVATE INVESTMENT AND PRODUCTION tainable economic development. This may also help to ex - long run, generate a certain attraction of energy-consuming 3.1. IPPs in WAEMU plain why access to energy is an integral part of the industrial companies to areas in Africa with low-cost solar 3.2. Entrepreneurship in solar energy sustainable development goals. energy production. 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar Power generation is one of BOAD's priority sectors of inter - This second part of the BOAD annual report contains a com - 4.2. Some recommendations and ideas for reflection vention. The Bank is involved first and foremost in financing bination of information from a literature review conducted projects, but also in the formulation of regional strategies, for the forum and views collected during the discussions held in synergy with community bodies or institutions such as the during the forum. It consists of four sections relating succes - WAEMU Commission, BCEAO, WAPP, CEB and various techni - sively to the following sub-themes: i) solar energy in the cal and financial partners. WAEMU space ecosystem, ii) the main obstacles to the take- off of solar energy in the WAEMU, iii) private investment and At the end of December 2018, BOAD's commitments to energy production, iv) the prospects for solar development in the projects stood at XOF1,069.5 billion for 133 projects. These in - WAEMU area. cluded fifteen (15) renewable energy projects, financed with

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 60 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization Installation of solar panels 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION SOLAR ENERGY 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection 1 IN THE ECOSYSTEM OF THE WAEMU REGION

West Africa's solar potential is very high. The WAEMU region, LIST OF ACRONYMS AND ABBREVIATIONS in particular, enjoys good sunshine LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 61 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE 1.1. GENERAL OVERVIEW ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU West Africa's solar potential is very high. The WAEMU It would be possible to obtain very competitive costs in SECTION TWO region, in particular, enjoys good sunshine conditions: the short term, in line with international trends, with ACHIEVEMENTS IN 2018 horizontal radiation exceeds 2200 kWh/m²/year in Niger prices per kWh estimated, in some European countries, and often varies between 1800 and 2100 kWh/m²/year at around 4 euro cents, or XOF25. Photovoltaic solar THEME FOR THE YEAR in Senegal, Mali, Burkina Faso and northern Benin. Ho - technology thus offers a real opportunity to increase the SOLAR ENERGY IN THE WAEMU ECONOMIES wever, the sun's resource is still largely underexploited access of populations and companies to clean and com - 1. SOLAR ENERGY IN THE ECOSYSTEM throughout this area. petitive energy, whether grid or off-grid. OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU Graph 1 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties Average cost of solar energy and fossil energy 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 0.4

3.1. IPPs in WAEMU ) 6

3.2. Entrepreneurship in solar energy 1 0 2

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4.1. Initiatives to promote solar o

4.2. Some recommendations and ideas for reflection $ S U (

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t Average cost of fossil energy s o C

0.0 2010 2011 2012 2013 2014 2015 2016 2017 LIST OF ACRONYMS AND ABBREVIATIONS

LIST OF ANNEXES Source: Canadian Pacific Consulting Services (CPCS) based on IRENA 2017 data ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 62 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 The cost of solar energy is expected to continue to fall The graph below shows that the drop in the price of solar steadily, and further halving is expected by 2030. In ad - energy is an accelerator of its deployment and generaliza - SECTION ONE dition, the cost of storage appears to be increasingly af - tion. This development is supported by the implementation ECONOMIC AND SOCIAL ENVIRONMENT fordable, with a reduction in the price of batteries to of supportive public policies. 1. INTERNATIONAL ECONOMIC ENVIRONMENT around 40% over the next five years. 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES Graph 2 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION Development phase of the solar market and corresponding support policies 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment Start-up Take-off Extension 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization Price of solar 2.2. Legal and regulatory uncertainties energy 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy International price 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION benchmarking 4.1. Initiatives to promote solar Deployment 4.2. Some recommendations and ideas for reflection of solar energy

Start-up phase Take-off phase Extension phase

- First private projects appear - The market is growing fast - The market has grown - A strong public support is - The role of public players is to significantly necessary to encourage the first foster convergence to external - Prices are in line with external investors prices prices - The regulatory framework - The regulatory framework is - Grid integration is the major (authorization procedure, etc.) getting improved and fine-tuned constraint. LIST OF ACRONYMS AND ABBREVIATIONS is still under development. LIST OF ANNEXES

ANNEXES Source: International Energy Agency. ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 63 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO Recent successes and ongoing experiences in WAEMU reduce the implementation time of solar projects in the ACHIEVEMENTS IN 2018 countries should therefore be encouraged and replicated. region (5 to 7 years) in order to achieve a duration of In total, there are more than 600 MW of solar and wind around 2 years, in line with technological advances. THEME FOR THE YEAR power connected to the grid, currently being closed or SOLAR ENERGY IN THE WAEMU ECONOMIES under construction. However, there is still a need to 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment Table 1 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU SOLAR POWER PLANTS IN OPERATION AS AT END 2018 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints Country Project Type of project Installed capacity Date commissioned 2.4. Difficulties for operators to access financing Burkina Faso Zagtouli 1 Public 33 MW 2017 3. PRIVATE INVESTMENT AND PRODUCTION Burkina Faso Ziga Public 1.1 MW 2017 3.1. IPPs in WAEMU Niger Malbaza Public 7 MW 2018 3.2. Entrepreneurship in solar energy Senegal CICAD Public 2 MW 2014 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar Senegal Senergy II (Dagana, Bokhol) IPP 20 MW 2016 4.2. Some recommendations and ideas for reflection Senegal Malicounda IPP 22 MW 2016 Senegal Senergy (Santhiou, Mekhe) IPP 30 MW 2017 Senegal Ten Merina / Cheikh Anta Diop IPP 30 MW 2017 Senegal Sakal (Barale Ndiaye, Louga) IPP 20 MW 2018 Senegal Energy ressources (Kahone) IPP 20 MW 2018 TOTAL 185 MW Source : CPCS, 2iE research

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 64 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

Table 2 SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT SOLAR POWER PLANTS UNDER CONSTRUCTION OR IN AN ADVANCED STAGE OF DEVELOPMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Country Project Type of project Installed capacity Implementation status

SECTION TWO Benin DEFISSOL Public 25MW Financing agreement signed ACHIEVEMENTS IN 2018 with AFD & EU Benin Solar projects within the framework IPP 45MW Development stage THEME FOR THE YEAR of the Compact MCC SOLAR ENERGY IN THE WAEMU Burkina Faso Zagtouli 2 Public 17 MW RFP being prepared. Financing ECONOMIES by the European Investment 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION Bank 1.1. General overview Burkina Faso Koudougou Public 20 MW RFP being prepared. Financing 1.2. The ambivalent interest of off-grid solar by the World Bank applications 1.3. Technical capacity and training Burkina Faso Kaya Public 10 MW RFP being prepared. Financing 1.4. Local manufacturing of solar equipment by the World Bank 2. MAIN OBSTACLES TO SOLAR ENERGY Côte d’Ivoire Korhogo Solaire IPP 25 MW Under development, the start of DEVELOPMENT IN WAEMU construction has been announced 2.1. Lack of institutional organization Côte d’Ivoire Boundiali Public 37,5 MW Construction under way. Co-finan - 2.2. Legal and regulatory uncertainties cing KfW/EU/Ivorian Government 2.3. Considerable technical constraints Guinea Bissau Bissau, Gabu and Public 22 MW Funding provided by BOAD 2.4. Difficulties for operators to access financing Canchungo power plants 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU Mali Kita / Akuo Energy IPP 50 MW Development stage 3.2. Entrepreneurship in solar energy Mali Sikasso / Power Pro IPP 50 MW Development stage 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION Mali Ségou solaire (Scatec) IPP 33 MW Development stage 4.1. Initiatives to promote solar Mali Koutiala IPP 25 MW Development stage 4.2. Some recommendations and ideas for reflection Niger Agadez Hybrid Power Plant Public 13 MW Construction expected in 2019 Niger Gorou Banda Public 20 MW Financing agreement signed at the end of 2018 (EU/AFD) Senegal Kahone et Kaël (Scaling Solar) IPP 60 MW Power purchase agreement signed at the end of 2018 Senegal Diass Public 23 MW Under construction TOTAL 440 MW

Source: CPCS, 2iE research

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 65 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE 1.2. THE AMBIVALENT INTEREST OF OFF-GRID ECONOMIC AND SOCIAL ENVIRONMENT SOLAR APPLICATIONS 1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO Given the high cost of expanding existing networks, de - panel costs, technological advances in battery performance ACHIEVEMENTS IN 2018 centralized systems have been developed to ensure that and longevity, the development of energy-efficient electri - people in rural areas have access to electricity. These sys - cal devices and the development of appropriate marketing THEME FOR THE YEAR tems are based on rapid deployment of solar energy for and payment solutions (mobile money and pay-as-you-go SOLAR ENERGY IN THE WAEMU accelerated energy inclusion. model). For example, solar kits distributed according to the ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM pay-as-you-go model make a significant contribution to OF THE WAEMU REGION Several solutions are now available on the market, from increasing access to electricity for disadvantaged popula - 1.1. General overview mini-solar lamps to autonomous solar installations of se - tions, particularly in Senegal, Burkina Faso, Côte d'Ivoire 1.2. The ambivalent interest of off-grid solar applications veral kilowatts. These solutions are based on lower solar and Mali. 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties Table 3 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing SALE OF AUTONOMOUS SOLAR SYSTEMS IN THE FIRST HALF OF 2018 (UNITS 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU Country Sale of autonomous solar systems in the first half of 2018 (units) 3.2. Entrepreneurship in solar energy 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION Benin 5 700 4.1. Initiatives to promote solar Burkina Faso 23 000 4.2. Some recommendations and ideas for reflection Côte d'Ivoire 17 000 Mali 16 000 Niger 4 000 Senegal 31 000 Togo 4 500

Source : CPCS

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 66 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

However, one of the major challenges is to be able to de - Although off-grid solar energy is capable of improving SECTION ONE fine a balanced regulation that is strict enough to protect people's living conditions, it is not competitive for low- ECONOMIC AND SOCIAL ENVIRONMENT consumers from bad practices, flexible enough not to sti - power uses, such as engines. The productive use of elec - 1. INTERNATIONAL ECONOMIC ENVIRONMENT fle market dynamics, and flexible enough to adapt to tricity - crafts, conservation or processing of agricultural 2. ECONOMIC ENVIRONMENT IN WAEMU future innovations. products, carpentry, welding, etc. - is thus limited in loca - lities that only have off-grid systems or mini-networks. Off- SECTION TWO ACHIEVEMENTS IN 2018 In Senegal, mini-grids are governed by the same legal and grid therefore generally does not allow the emergence of regulatory framework as large operators. They are required income-generating activities, which would stimulate a dy - THEME FOR THE YEAR to sign a distribution concession contract with the Ministry namic of economic development. SOLAR ENERGY IN THE WAEMU of Energy and obtain a license to sell power. ECONOMIES Solar, photovoltaic or thermal energy has many other au - 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION Benin, on the other hand, adopted on 3 October 2018 a tonomous applications: solar ovens, solar dryers, cold pro - 1.1. General overview "decree regulating off-grid electrification". According to duction, industrial heat production, etc. However, the 1.2. The ambivalent interest of off-grid solar applications this text, only mini-grids over 500 kVA will have to obtain most convincing and relevant applications in the context 1.3. Technical capacity and training a concession, smaller systems requiring only a simple of WAEMU countries are in public lighting, solar pumping 1.4. Local manufacturing of solar equipment authorization. and solar hot water. 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy 1.3. TECHNICAL CAPACITY AND TRAINING 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar The solar energy market in WAEMU faces two major dif - are therefore faced with a challenge both in terms of the 4.2. Some recommendations and ideas for reflection ficulties related to the qualification of the workforce and qualification of technicians and the quality of equipment. the quality of equipment on the market. To address these challenges, it is important to provide the A study 10 commissioned by SNV (Dutch Cooperation) in WAEMU region with good expertise and a skilled work - Burkina Faso found a failure rate of 71%, especially on force, by promoting technology and skills transfers. There domestic installations. The same study found that there should also be market regulation through appropriate re - is a link between qualification and quality of facilities. We gulation (certification of installers) and the establishment of quality control systems.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES 10 Study on the link between the qualification and quality of renewable energy services in Burkina Faso, SNV, CEAS Burkina, OCADES, AGEREF, March 2018 ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 67 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Ultimately, training opportunities in solar energy should laboratories, etc.). There are also concerns about the trai - be strengthened and diversified. Admittedly, there are al - ning of trainers, the need to strengthen the synergy of ac - SECTION TWO ACHIEVEMENTS IN 2018 ready some qualifying or diploma training modules of va - tions between the various institutions involved in training, rious kinds, but serious challenges lie in providing as well as the development of relevant standards that THEME FOR THE YEAR adequate equipment for training centres (educational meet the needs. SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 1.4. LOCAL MANUFACTURING OF SOLAR EQUIPMENT 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization About 90% of solar module production takes place in Local and regional demand is expected to have a signi - 2.2. Legal and regulatory uncertainties Asia, with China accounting for 66% of the total. Eu - ficant impact on plant profitability, while conditioning 2.3. Considerable technical constraints rope holds 6% of the market, while the United States any economies of scale necessary for the production of 2.4. Difficulties for operators to access financing holds 2%. In Africa, local manufacturing capacity re - competitively priced solar modules. 3. PRIVATE INVESTMENT AND PRODUCTION mains limited, but several plants have been established 3.1. IPPs in WAEMU in recent years in Kenya, Senegal, Ghana, Burkina Faso While it is difficult to compete with China, several as - 3.2. Entrepreneurship in solar energy and South Africa. sembly plants in Africa have focused on the quality of 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar their products and enjoy the preference of some buyers 4.2. Some recommendations and ideas for reflection for modules made by local companies.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 68 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization Installation of solar panels. 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION MAIN OBSTACLES 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection 2 TO SOLAR ENERGY DEVELOPMENT IN WAEMU

“Institutional, regulatory, legal, technical and financial impediments will have to be

LIST OF ACRONYMS AND ABBREVIATIONS overcome in order to maintain the momentum towards a real take-off of solar energy LIST OF ANNEXES in the WAEMU countries.” ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 69 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

Several hurdles will have to be overcome in order to are institutional, regulatory, legal, technical (or related to SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT maintain the momentum and achieve a real take-off of the very nature of solar energy) and financial. solar energy in the WAEMU countries. These obstacles 1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018 2.1. LACK OF INSTITUTIONAL ORGANIZATION

THEME FOR THE YEAR The development of solar energy potential is constrained of organization, only public projects led by the national SOLAR ENERGY IN THE WAEMU ECONOMIES by the way the electricity sector is structured. In West electricity company can see the light of day. 1. SOLAR ENERGY IN THE ECOSYSTEM Africa, the top-down integrated monopoly model has OF THE WAEMU REGION long been the norm. However, a certain openness has With the recent model independent power production is 1.1. General overview 1.2. The ambivalent interest of off-grid solar been observed since the late 1990s, with the emergence, allowed, but only the national company can purchase the applications alongside the top-down integrated monopoly of the in - power generated. 1.3. Technical capacity and training dependent production model with a single buyer. For the 1.4. Local manufacturing of solar equipment former, only one company, usually state-owned, has the The table below presents the different organizational mo - 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU right to generate, transmit and sell power. With this type dels of the power sector in the WAEMU region. 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU Table 4 3.2. Entrepreneurship in solar energy STRUCTURE OF THE POWER SECTOR IN WAEMU 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection Country Type of organization Burkina Faso Vertically integrated public monopoly Guinée Bissau Niger Independent Power Producer (IPP) + Single Buyer in charge of power generation, transmission and distribution. Unregulated market Côte d'Ivoire Mali IPP + Single buyer in charge of power generation, transmission and distribution. Regulated market Senegal Togo PP + Single buyer in charge of power generation, transmission and wholesale Benin LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES Source : ERERA 2017 ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 70 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE The lack of coordination between the various institutional coordination of the work of the various stakeholders ECONOMIC AND SOCIAL ENVIRONMENT players and a lack of precision in defining the role of (ministries, regulators, etc.). In addition, negotiations 1. INTERNATIONAL ECONOMIC ENVIRONMENT each, make it difficult to implement private projects that and decisions generally take time: it takes on average 2. ECONOMIC ENVIRONMENT IN WAEMU are also confronted with a lack of experience in the field seven (7) years to develop a solar IPP project. For exam - SECTION TWO of solar technology. This often explains the delays in the ple, projects in Senegal began their development in ACHIEVEMENTS IN 2018 examination of applications and the very long develop - 2008-2009, in Burkina Faso around 2009-2010, in Mali ment times of large projects. in 2012. These development times, which are too long, THEME FOR THE YEAR explain the high rates of return expected from investors SOLAR ENERGY IN THE WAEMU ECONOMIES The lack of institutional framework for projects is also as well as the high development costs of projects. 1. SOLAR ENERGY IN THE ECOSYSTEM one of the most important impediments. There is no OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.2. LEGAL AND REGULATORY UNCERTAINTIES 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints In recent years, there has been significant progress in re - However, national regulations allow OTC contracts for spe - 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION gulation, with the introduction of independent power ge - cific cases (emergency concepts, pilot project, technical re - 3.1. IPPs in WAEMU neration. Nevertheless, it is still imperfect. quirements, etc.); these cases often do not apply to 3.2. Entrepreneurship in solar energy renewable energies. In the case of over-the-counter trans - 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION There is a lack of clarity in the way over-the-counter actions, the terms and conditions must be described in de - 4.1. Initiatives to promote solar (OTC) contracts are awarded, leading to contractual com - crees which, unfortunately, are not always available. This 4.2. Some recommendations and ideas for reflection plications. OTC transactions remain the most widely used leads to many delays and additional costs for independent mode of transaction in the WAEMU region, while legisla - power generation projects. tion prohibits bilateral negotiations between private deve - lopers and governments. The same applies to the community directives on public procurement procedures, which recommend calls for tenders.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 71 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

INSERT 1 SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Definition of legal, regulatory and institutional frameworks 1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Laws are enacted to define the main parameters of the sectoral organization.

SECTION TWO The legal framework i) specifies translation into regulation is an obs - Thus, at the institutional level, ex - ACHIEVEMENTS IN 2018 which entities are authorized to tacle to the development of solar perience shows that the main chal - produce electricity, and how, projects. lenges for a private solar project THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ii) lays down the principles of pos - developer include: ECONOMIES sible support or incentive measures The institutional framework varies 1. SOLAR ENERGY IN THE ECOSYSTEM for solar energy production and from one country to another, depen - good coordination of the actions OF THE WAEMU REGION • 1.1. General overview iii) defines the role of sectoral insti - ding on national political and secto - of institutional actors and clarity 1.2. The ambivalent interest of off-grid solar tutions (ministry, regulator, etc.). ral choices. As a general rule, the in the definition of their roles. This applications following stakeholders are present in problem can be solved by setting 1.3. Technical capacity and training The regulatory framework specifies most WAEMU countries: the Minis - up a single window, which be - 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY i) the conditions for obtaining the try of Energy, the National Electricity comes the project developer's DEVELOPMENT IN WAEMU permits, licences, authorizations, Company, the Regulatory Authority, sole point of contact, and then 2.1. Lack of institutional organization approvals and contracts for the the Rural Electrification Agency and coordinates the procedures of the 2.2. Legal and regulatory uncertainties production of renewable energy, the Renewable Energy Agency. institutional actors involved; 2.3. Considerable technical constraints ii) any financial support measures Other actors include the Ministry of 2.4. Difficulties for operators to access financing for renewable energy (e. g. invest - Finance (tax incentives, payment strengthening the capacities and 3. PRIVATE INVESTMENT AND PRODUCTION • 3.1. IPPs in WAEMU ment subsidies or preferential feed- guarantees, subsidies, compensa - human resources of the various 3.2. Entrepreneurship in solar energy in tariffs) and iii) the procedures for tion), the Ministry of the Environ - institutions in order to reduce de - 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION access and connection to the grid ment (permits and authorizations), lays in the processing of requests; 4.1. Initiatives to promote solar for renewable energy projects, the Investment Promotion Agency 4.2. Some recommendations and ideas for reflection iv) the technical parameters to be (investor support), the Standards reinforcement of solar-specific ex - • met for injecting renewable electri - Agency (definition of norms and perience of institutional players. city into the national grid, generally standards for solar equipment). Here The first solar projects often pay under the network code. again, there may be a gap between the price of institutional learning. the mandates of these different ins - The frequent discrepancy between titutions as laid down by law or by a principle laid down by law and its their statutes, and actual practice.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 72 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 For off-grid solar energy, certain features of the legal and The relaxation of the regulatory framework for private regulatory framework now represent obstacles to the full mini-grids, a finer targeting of subsidies for rural elec - SECTION ONE development of the market. Indeed, some WAEMU coun - trification, and the generalization of tax and customs in - ECONOMIC AND SOCIAL ENVIRONMENT tries (Senegal) treat mini-grids in the same legal and regula - centives could help to accelerate the progress of off-grid 1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU tory way as large operators. This lack of flexibility threatens solar energy. to stifle the dynamics of the off-grid solar market. SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 2.3. CONSIDERABLE TECHNICAL CONSTRAINTS 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training • Saturation of the power grid the objectives will remain constrained by the constraints 1.4. Local manufacturing of solar equipment of power transmission from the power producer to the 2. MAIN OBSTACLES TO SOLAR ENERGY Solar power plants are heavily dependent on sunlight and consumer. DEVELOPMENT IN WAEMU generate electricity during the day, while it is in the eve - 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties ning, at nightfall, that demand is highest. Solar power • Solar energy storage constraints 2.3. Considerable technical constraints production can also vary rapidly depending on the wea - 2.4. Difficulties for operators to access financing ther: when the sky gets cloudy, other means of power Given the intermittent nature of solar power generation, 3. PRIVATE INVESTMENT AND PRODUCTION generation must be mobilized to compensate for drop in its integration into the grid requires the addition of sto - 3.1. IPPs in WAEMU solar power generation. The limits observed are therefore rage batteries. The electricity produced during the day 3.2. Entrepreneurship in solar energy both on the generation side and on the transmission and can thus be consumed at night. The challenge facing the 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION distribution side. WAEMU countries is how to manage this intermittency, 4.1. Initiatives to promote solar particularly by procuring reliable batteries that are suited 4.2. Some recommendations and ideas for reflection The increase in the share of solar energy in the energy to the climatic conditions of the area. In Senegal, for mix of WAEMU countries is hampered by the frequent example, solutions are being deployed. The addition of grid saturation. Indeed, WAEMU networks are fragile and storage batteries of several tens of megawatts is being small, and often already saturated. Studies carried out on considered to solve the intermittency of solar power ge - the grids point to the need to strengthen the transmission neration, while the dispatching centre plans to equip it - lines in order to achieve the objectives set by the Union self with weather forecasting and control-command tools in terms of the energy mix. Thus, while solar can provide to manage weather hazards. the answer to the energy demand, the achievement of

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 73 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU 2.4. DIFFICULTIES FOR OPERATORS TO ACCESS FINANCING SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR Factors that hinder the participation of commercial Although countries have similar profiles, it is surprising SOLAR ENERGY IN THE WAEMU banks include: i) the risky profile of entrepreneurs, com - to see the diversity of financial structuring. Furthermore, ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM bined with the lack of a mechanism to guarantee credit governments are often not prepared for the implemen - OF THE WAEMU REGION to SMEs and start-ups, ii) the generally high cost of fi - tation of these guarantees, so negotiations are often 1.1. General overview nancing for operators, iii) the lack of long-term re - very lengthy, leading to delays and higher costs per 1.2. The ambivalent interest of off-grid solar applications sources for financing solar energy projects (10 to kWh. Several mechanisms can be used to mitigate risk 1.3. Technical capacity and training 20 years). and thus reduce the cost of financing: 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY Indeed, one of the greatest risks in the development of - sovereign guarantees to secure payments (Senegal has DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization grid-connected solar projects in sub-Saharan Africa is set up such guarantees for all IPPs); 2.2. Legal and regulatory uncertainties the buyer's risk of non-payment, particularly if the buyer 2.3. Considerable technical constraints is a national electricity company without deep pockets. - partial risk guarantees from development finance 2.4. Difficulties for operators to access financing For their part, while SMEs and start-ups active in off- institutions (DFIs); 3. PRIVATE INVESTMENT AND PRODUCTION grid solar energy (solar kits and lanterns) represent an 3.1. IPPs in WAEMU opportunity for commercial banks to intervene, such - political risk insurance by institutions such as MIGA, 3.2. Entrepreneurship in solar energy ventures remain quite risky. Also, banks and investors EIB, African Trade Insurance Agency (ACA) and Over - 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar require the establishment of securities and financial gua - seas Private Investment Corporation (OPIC). 4.2. Some recommendations and ideas for reflection rantees to cover i) defaults by the operator and ii) the termination clause. The participation of DFIs, which provide concessional fi - nancing (or grants) and credibility to projects, is very useful to keep the cost of financing down.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 74 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization Solar panel 2.2. Legal and regulatory uncertainties installation site. 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy PRIVATE INVESTMENT 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection 3 AND PRODUCTION roles of the private sector and government

“The advent of solar energy as a clean and competitive source of energy has coincided LIST OF ACRONYMS AND ABBREVIATIONS with a broad movement towards liberalization of the electricity sector and increased private LIST OF ANNEXES sector participation in infrastructure development.” ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 75 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 3.1. IPPs IN WAEMU SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT 1. INTERNATIONAL ECONOMIC ENVIRONMENT The advent of solar energy as a clean and competitive Public authorities in the WAEMU region have played a 2. ECONOMIC ENVIRONMENT IN WAEMU source of energy has coincided with a broad movement vital role in the take-off of solar energy projects, in par - towards liberalization of the electricity sector and increa - ticular by defining the organizational arrangements for SECTION TWO ACHIEVEMENTS IN 2018 sed participation of the private sector in infrastructure de - the electricity sector and setting up instruments to sup - velopment. port solar energy (subsidies, tax or customs facilities, so - THEME FOR THE YEAR vereign guarantees, etc.). The organizational SOLAR ENERGY IN THE WAEMU In fact, most of the solar capacity installed in the area has arrangements are generally laid down by legal and re - ECONOMIES been developed by independent power producers. They gulatory texts and have an impact on the development 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION are granted long-term (15-20 years) concessions and of the sector. Several modalities exist, but the most do - 1.1. General overview power purchase agreements (PPAs 11 ). These contracts are minant type in the WAEMU region is the type that al - 1.2. The ambivalent interest of off-grid solar applications concluded respectively with governments and national lows for independent power generation and sale to a 1.3. Technical capacity and training electricity companies, which are generally single buyers single buyer who has a monopoly on transmission and 1.4. Local manufacturing of solar equipment (or mining and industrial companies) and often have pay - distribution (usually the national electricity company). 2. MAIN OBSTACLES TO SOLAR ENERGY ment guarantees (sovereign guarantees and escrow ac - DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization counts). In Senegal, discussions are underway to establish an or - 2.2. Legal and regulatory uncertainties ganizational model for the sector based on third party ac - 2.3. Considerable technical constraints In the WAEMU region, the first IPP was launched in Côte cess to the grid. This model will end SENELEC's monopoly 2.4. Difficulties for operators to access financing d'Ivoire with the construction of the Vridi thermal power as sole buyer. It is intended to foster the emergence of 3. PRIVATE INVESTMENT AND PRODUCTION plant, but it was in Senegal in 2016 that the first solar entirely private initiative projects, which will sell their 3.1. IPPs in WAEMU IPP appeared as part of the construction of the Bokhol power, not to SENELEC, but directly to private, industrial 3.2. Entrepreneurship in solar energy power plant, with a capacity of 20 MW. Since then, many or large consumer buyers. Theoretically scheduled for 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION power plants have developed in the form of IPP. 2019, the implementation of this model could be delayed 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection for a few years due to the lack of a specific regulatory In Côte d'Ivoire, a 37.5 MW solar power plant project in framework. the northern town of Boundiali was announced in 2018. In Mali, the Kita IPP (50MW) co-financed by BOAD just reached financial closing in October 2018.

LIST OF ACRONYMS AND ABBREVIATIONS 11 A power purchase agreement defines the price at which the electricity will be sold, possibly with price revision clauses. LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 76 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 3.2. ENTREPRENEURSHIP IN SOLAR ENERGY SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU The development of renewable energies in West Africa Benin and Senegal seem to be the countries with a vibrant has fostered the emergence of a real solar energy eco - renewable energy companies. These countries are follo - SECTION TWO nomy, with a growing number of companies operating wed by Côte d'Ivoire, Burkina Faso, Togo, Mali and Guinea ACHIEVEMENTS IN 2018 in this sector. In addition to limited liability companies and Bissau. The SMEs and start-ups thus created promote the public limited companies, the OHADA Uniform Act offers development and diversification of jobs, as well as innova - THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU the opportunity to create simplified joint stock compa - tion and value creation (see insert 2). ECONOMIES nies, which should contribute to the development of 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION start-ups in the field of renewable energies, this form of 1.1. General overview organization better meeting the expectations of start-ups 1.2. The ambivalent interest of off-grid solar in terms of flexibility and contractual freedom. applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization INSERT 2 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints Award-winning innovative start-ups at BOAD’s 45th anniversary forum 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION The BOAD Competition for start-ups in WAEMU with the most innovative renewable energy project, particularly 3.1. IPPs in WAEMU solar, was to encourage innovation and enhance the skills of local African developers. 3.2. Entrepreneurship in solar energy 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar One hundred and twenty-three evidence of the great innovative po - "KYA-SoP Solar Power Units" project 4.2. Some recommendations and ideas for reflection (123) applications were received. tential in the WAEMU region. and the "Solar Modernization and The initiatives cover several forms of Digitization of Peasant Agriculture: renewable energy: biogas, biofuels, In order to guarantee impartiality Smart Solar Water Pump and Digital wind energy and solar photovoltaic and ensure a cross-review of the re - Training and Marketing Platform for energy. view of the proposals, two (2) diffe - Sub-Saharan Africa" project. rent panels sat at each of the three The selection process was conduc - stages of the process. The KYA-Energy Group's " KYA- ted by the CPCS-2iE consortium. SoP Solar Power Units " project Two outstanding proposals by pro - The two (2) applications selected at proposes to move from the expen - ject developers were identified, an the end of the process were: i) the sive, centralized system of power LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 77 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 2 (continued )

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT supply, to a much more affordable, The aim of the project promoter is the development and production in 1. INTERNATIONAL ECONOMIC ENVIRONMENT decentralized system (individual or to move towards semi-industrializa - Africa of lighting systems and pro - 2. ECONOMIC ENVIRONMENT IN WAEMU community) using standardized hy - tion of the KYASoPs, by setting up duction tools based on solar energy, brid mobile cabinets, through KYA- a local assembly line, with the capa - for the rural economy. Nadji.Bi Se - SECTION TWO ACHIEVEMENTS IN 2018 SoP® solar power units. KYA-SoP® city to produce 1000 KYA-SoP units negal proposes the development of solar power units are likely to posi - in the first year. Through this pro - an intelligent and connected solar tion themselves in the market for ject, more than 150 direct jobs and pump solution, supported by An - THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU access to energy services, such as several dozen indirect jobs will be droid software for online marketing ECONOMIES high value-added solar products, created. More than 30,000 house - management. 1. SOLAR ENERGY IN THE ECOSYSTEM which can have a significant impact holds would have access to electri - OF THE WAEMU REGION on people's lives. city in less than five (5) years of The promoters' objective is to 1.1. General overview 1.2. The ambivalent interest of off-grid solar production. The project will also boost the development of the rural applications Designed, assembled and marketed prevent, over the first five years, the economy in sub-Saharan Africa 1.3. Technical capacity and training by KYA-Energy Group, a young To - emission of 3,429 tonnes Eq-CO2, through an integrated and innova - 1.4. Local manufacturing of solar equipment golese company with a sub-regional the equivalent of 136,000 trees tive solution. This should allow an 2. MAIN OBSTACLES TO SOLAR ENERGY outlook, created in July 2015 and planted. efficient use of water resources, DEVELOPMENT IN WAEMU based in Lomé (Togo), KYA-SoP through solar energy. It would si - 2.1. Lack of institutional organization solar power units are standardized The project on "Solar moderniza - gnificantly increase agricultural 2.2. Legal and regulatory uncertainties into (6) ranges, including three (3) tion and digitalization of peasant yields, while promoting efficient 2.3. Considerable technical constraints for households, with powers ran - agriculture: intelligent solar water marketing of production, through 2.4. Difficulties for operators to access financing ging from 1kVA to 5kVA, and three pump and digital training and mar - a multiservice digital platform 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU other ranges for SME/SMI, with po - keting platform for sub-Saharan adapted to informal structures. 3.2. Entrepreneurship in solar energy wers ranging from 5kW to 10kW. Africa" is proposed by Nadji Bi Senegal, a start-up specializing in 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection

In addition, the challenges to be addressed in the context training centres for renewable energy, iii) regulating the of promoting SMEs and start-ups include: i) strengthe - solar market (creating a quality reference for solar pro - ning seed, innovation and venture capital funds adapted ducts and business certification). to start-ups, ii) strengthening support structures and

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 78 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 INSERT 3

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Developers and special investment funds 1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU The financing of private solar projects is characterized by a significant initial investment, with a stable return over SECTION TWO a long period (15 to 25 years). The financing structure is generally made up of equity (25-30%) and debt ACHIEVEMENTS IN 2018 (70-75%). The equity 12 comes from developers and investment funds, while debt comes from commercial or development banks. Equity and debt are invested or lent through a special purpose vehicle (SPV) THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM The development of solar projects When the solar project is operatio - more than 40 GW is expected. In OF THE WAEMU REGION in Africa can take 2 to 8 years (fea - nal, it becomes less risky at this 2015, the five largest international 1.1. General overview sibility studies, negotiation of pur - stage. The developer can therefore developers (criteria based on instal - 1.2. The ambivalent interest of off-grid solar applications chase contracts). Developers refinance his debt by renegotiating led capacity or under development) 1.3. Technical capacity and training generally finance early stages of de - the terms, so as to obtain a more were: GCL New Energy, First Solar, 1.4. Local manufacturing of solar equipment velopment with their own funds, favorable loan rate. Canadian Solar, Total (SunPower 2. MAIN OBSTACLES TO SOLAR ENERGY thus assuming a higher level of risk. and Eren), and SunEdison. DEVELOPMENT IN WAEMU As a result, they require a higher re - According to the International Re - Most of their investments are in es - 2.1. Lack of institutional organization turn on investment. Some develo - newable Energy Agency (IRENA), tablished markets such as the Uni - 2.2. Legal and regulatory uncertainties pers enter the pre-construction between 2013 and 2017, project ted States and Japan. But 2.3. Considerable technical constraints stage to help finance construction. developers contributed on average international developers are also in - 2.4. Difficulties for operators to access financing Others wait until construction is 40% of global private investment terested in large commercial pro - 3. PRIVATE INVESTMENT AND PRODUCTION completed to buy the project, allo - in renewable energy. These invest - jects in emerging economies. Latin 3.1. IPPs in WAEMU wing the initial developers to exit ments are attributable to develo - America, the Middle East, North 3.2. Entrepreneurship in solar energy the project. Lenders are involved at pers in China, Japan, the United Africa and sub-Saharan Africa ac - 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION a later stage of the process, where Kingdom and the United States. In counted for 12% of operational 4.1. Initiatives to promote solar financial flows are more certain. 2016, the 15 largest international projects and 28% of renewable 4.2. Some recommendations and ideas for reflection solar developers accounted for energy development projects. 26.4 GW of installed capacity and

12 Amounts invested by an investor in exchange for shares in the project company.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 79 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT INSERT 3 (continued ) 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018 Many international developers ope - ment funds in solar power projects ment fund), Access Infra Africa, rate in Africa: Berkeley Energy, Bio - is still low due to the high risk profile Africa Infrastructure Investment THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU therm Energy, EDF, Enel Green of these projects. Managers (AIIM), Emerging Africa ECONOMIES Power, Engie, Gigawatt Global, Infrastructure Fund, Helios Private 1. SOLAR ENERGY IN THE ECOSYSTEM Greenwish Partners, JCM, Lekela However, some specialized funds Equity, Africa50, Norfund, and OF THE WAEMU REGION Power, Neoen, ResponAbility, have chosen to focus on infrastruc - the Sovereign Fund for Strategic 1.1. General overview Scatec Solar, SolarReserve. ture, energy and renewable energy, Investments (FONSIS) in Senegal. 1.2. The ambivalent interest of off-grid solar applications with a particular focus on sub-Sa - 1.3. Technical capacity and training Partnerships between international haran Africa. These funds often in - In the WAEMU region, more and 1.4. Local manufacturing of solar equipment and local developers are frequent. vest alongside development banks more funds are being created. So - 2. MAIN OBSTACLES TO SOLAR ENERGY They enable international develo - and developers, and take advan - metimes existing funds also reduce DEVELOPMENT IN WAEMU pers to acquire local market know - tage of mechanisms such as grants their tickets in order to reach start- 2.1. Lack of institutional organization ledge and share risk. and guarantees. ups. This for instance is the case of 2.2. Legal and regulatory uncertainties SINERGI in Niger and Burkina Faso, 2.3. Considerable technical constraints Investment funds worldwide remain Specialized funds, active in develo - Teranga Capital in Senegal, Initiative 2.4. Difficulties for operators to access financing a minor player in renewable energy. ping solar projects in sub-Saharan Ouagadougou in Burkina Faso, the 3. PRIVATE INVESTMENT AND PRODUCTION They accounted for about 2% of Africa, and seeking opportunities Afric'Innov Start-Up Fund, on pilot 3.1. IPPs in WAEMU total investments between 2013 and and better returns on investment, and operational phases in Burkina 3.2. Entrepreneurship in solar energy 2017. In sub-Saharan Africa, the include: Meridiam, IFC Infraventures Faso, Niger, Senegal and Guinea 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar participation of mainstream invest - (IFC's global infrastructure develop - and, in Benin, of Partech Africa. 4.2. Some recommendations and ideas for reflection

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 80 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION 1.1. General overview 1.2. The ambivalent interest of off-grid solar applications 1.3. Technical capacity and training 1.4. Local manufacturing of solar equipment 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization Winners of BOAD’s photo and 2.2. Legal and regulatory uncertainties start-up contests. 2.3. Considerable technical constraints 2.4. Difficulties for operators to access financing 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy PROSPECTS FOR SOLAR 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection 4 IN THE WAEMU REGION

The WAEMU countries face several regulatory, institutional and financial challenges and constraints in spite of their huge LIST OF ACRONYMS AND ABBREVIATIONS solar energy potential. LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 81 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Table 5 1. INTERNATIONAL ECONOMIC ENVIRONMENT STRENGTHS AND WEAKNESSES OF WAEMU COUNTRIES IN SOLAR ENERGY DEVELOPMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Pays BENIN BURKINA CÔTE GUINEA MALI NIGER SENEGAL TOGO SECTION TWO ACHIEVEMENTS IN 2018 FASO D’IVOIRE BISSAU Significant solar resource H H H H H H H H H H H H THEME FOR THE YEAR Potential for rapid increase H H H H H H H H H H H H H H SOLAR ENERGY IN THE WAEMU in demand ECONOMIES 1. SOLAR ENERGY IN THE ECOSYSTEM Enabling environment OF THE WAEMU REGION for private sector participation H H H H - H H - H H H 1.1. General overview in power generation 1.2. The ambivalent interest of off-grid solar applications Competitiveness of solar energy 1.3. Technical capacity and training compared to other available H H H H H H H H H H H H H 1.4. Local manufacturing of solar equipment power sources 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU Strengths ( HH : High, H : Moderate, - : Absent) 2.1. Lack of institutional organization 2.2. Legal and regulatory uncertainties Lack of experience in private 2.3. Considerable technical constraints participation in power generation ## ## - ## # ## - # 2.4. Difficulties for operators to access financing Lack of experience with solar 3. PRIVATE INVESTMENT AND PRODUCTION technology, especially ## - # - # ## - ## 3.1. IPPs in WAEMU for large projects 3.2. Entrepreneurship in solar energy Small size of the power grid ## ## - ## # ## - ## 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION Financial constraints 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection of the national electricity company # # - ## ## ## - # Political instability and/or generally unfavorable business environment - - - ## - ## - -

Weaknesses ( ## : High, # : Moderate, - : Absent) Source : CPCS

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 82 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018 4.1. INITIATIVES TO PROMOTE SOLAR SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Several actors have initiated projects or programs to sup - of accessing financing for the initial development of SECTION TWO port solar energy. It is desirable that, in the WAEMU area, small renewable energy projects. ACHIEVEMENTS IN 2018 future actions should, as far as possible, be coordinated

THEME FOR THE YEAR with existing ones. The most important of these initia - • The Lighting Africa programme : it is part of the SOLAR ENERGY IN THE WAEMU tives, which have real hopes for the virtuous development World Bank Group's contribution to Sustainable Energy ECONOMIES of solar energy in the area, are summarized below: for All (SEforAll). It is implemented in partnership with 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION the Energy Sector Management Assistance Programme 1.1. General overview • BOAD : while it is increasing its investment and invol - (ESMAP), the Global Environment Facility (GEF) and 16 1.2. The ambivalent interest of off-grid solar vement is this area, has already invested XOF 84 billion. Governments. This initiative aims to provide more than applications 1.3. Technical capacity and training It intends to place particular emphasis on the imple - 250 million people in sub-Saharan Africa, living without 1.4. Local manufacturing of solar equipment mentation of the recommendations of the electricity, with access to clean, affordable and quality 2. MAIN OBSTACLES TO SOLAR ENERGY November 2018 forum. lighting by 2030 through clean off-grid systems. DEVELOPMENT IN WAEMU 2.1. Lack of institutional organization • The "New Deal" initiative for energy in Africa : this • The Scaling Solar Initiative : this initiative brings to - 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints initiative is scheduled for 2015-2025, and is led by the gether a range of services from the World Bank Group, 2.4. Difficulties for operators to access financing African Development Bank (AfDB). It aims to promote as part of a unique commitment to create viable mar - 3. PRIVATE INVESTMENT AND PRODUCTION universal access to energy on the African continent by kets for solar energy in each client country. The pro - 3.1. IPPs in WAEMU 2025. The promoters of the programme intend to mo - gramme aims to make grid-connected, privately 3.2. Entrepreneurship in solar energy bilize private capital, through innovative financing me - financed solar projects operational within two years at 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION chanisms and promoting Public-Private Partnerships. competitive rates. 4.1. Initiatives to promote solar 4.2. Some recommendations and ideas for reflection • The Sustainable Energy Fund for Africa (SEFA) : it • The ROGEP (Regional Off-Grid Electrification Pro - supports small and medium-sized renewable energy and ject): it is promoted by ECREEE and the World Bank. It energy efficiency projects in Africa. This multi-donor trust aims to promote access to basic electrification services fund (Denmark, United States, Italy and United King - for households, micro and small businesses, schools dom), administered by the AfDB, addresses the difficulty and health centres in 19 countries 13 in West and Central

LIST OF ACRONYMS AND ABBREVIATIONS 13 Benin, Burkina Faso, Chad, Central African Republic, Cameroon, Côte d'Ivoire, Cape Verde, Gambia, Ghana, Guinea, Guinea Bissau, Liberia, Mali, Mauritania, Nigeria, Niger, Senegal, Sierra Leone, and Togo. LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 83 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT Africa. The project ecosystem is built on private actors. • The International Solar Alliance (ISA) : it is based on 1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU Indeed, private companies, specialized in solar energy a desire to combine the efforts of developing countries and approved, will be able to benefit from financing to to attract investment and technology in this sector and SECTION TWO acquire equipment and offer tailor-made solutions to to develop the use of solar energy in countries between ACHIEVEMENTS IN 2018 end users. Financing will be provided to companies or the Tropics of Cancer and Capricorn. A stated objective end users by local banks in the project area. In this is to install 1,000 GW of solar power and invest 1,000 THEME FOR THE YEAR context, BOAD was selected to act as a financial inter - billion dollars in this sector by 2030. SOLAR ENERGY IN THE WAEMU ECONOMIES mediary between the World Bank and local banks, 1. SOLAR ENERGY IN THE ECOSYSTEM which would have to finance service delivery compa - • WAPP : it is a major player in the integration of power OF THE WAEMU REGION 1.1. General overview nies. grids and the development of renewable capacities. 1.2. The ambivalent interest of off-grid solar applications • The Energy Sector Management Assistance Pro - There are also many climate funds that offer concessional 1.3. Technical capacity and training gramme (ESMAP) : this programme is a partnership financing or grants for the implementation of solar pro - 1.4. Local manufacturing of solar equipment between the World Bank Group and 18 other stakehol - jects in sub-Saharan Africa. Some of these funds include 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU ders. It aims to help low- and middle-income countries the Climate Investment Fund, the Green Climate Fund, 2.1. Lack of institutional organization reduce poverty and stimulate growth through environ - the IRENA/ADFD Project Facility, the ECOWAS Renewable 2.2. Legal and regulatory uncertainties mentally friendly energy solutions. Energy Facility, the Global Environment Facility. Most of 2.3. Considerable technical constraints these stakeholders were present at the Bank's 45th an - 2.4. Difficulties for operators to access financing • The African Renewable Energy Initiative (AREI) : it niversary forum. 3. PRIVATE INVESTMENT AND PRODUCTION 3.1. IPPs in WAEMU aims to promote the installation of large-scale renewa - 3.2. Entrepreneurship in solar energy ble energy capacity on the African continent by 2020. Furthermore, green bonds, which are one of the finan - 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION This would have a significant impact on reducing the cing solutions for climate and environment-related invest - 4.1. Initiatives to promote solar continent's greenhouse gas emissions. This initiative is ments (i.e. solar energy), have recently been introduced 4.2. Some recommendations and ideas for reflection led by the African Union Commission, the New Part - in Africa and the World Bank supports CREPMF in the im - nership for Africa's Development Agency (NEPAD), the plementation of green bond regulation in WAEMU. These African Negotiators Group, the African Development new instruments will help to ease financing constraints Bank, the United Nations Environment Programme and investor mistrust. (UNEP), and the International Renewable Energy Agency (IRENA).

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 84 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU 4.2. SOME RECOMMENDATIONS AND IDEAS FOR REFLECTION

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU • Continue to implement an appropriate • Making private investment less risky ECONOMIES framework The initial stages of project development are also the most 1. SOLAR ENERGY IN THE ECOSYSTEM OF THE WAEMU REGION Most countries in the region have established, or are in the risky for a private investor, especially in poorly developed 1.1. General overview process of establishing, a legal framework that promotes markets where experience with solar projects is still limited 1.2. The ambivalent interest of off-grid solar applications the emergence of IPP projects in solar energy. However, le - or non-existent. Public sector operators can help to reduce 1.3. Technical capacity and training gislation alone is not enough. Implementing regulations are this risk, particularly by: i) financing upstream studies (iden - 1.4. Local manufacturing of solar equipment also needed, as well as the various regulations governing tification of sites, analysis of their solar potential); ii) facili - 2. MAIN OBSTACLES TO SOLAR ENERGY practice. It is therefore necessary to strengthen the capaci - tating procedures for obtaining the required permits and DEVELOPMENT IN WAEMU ties of government agencies in the development of energy licences; iii) managing procedures for land acquisition and 2.1. Lack of institutional organization policies and the operationalization of implementing de - compensation of affected persons; and iv) using standard 2.2. Legal and regulatory uncertainties 2.3. Considerable technical constraints crees, as well as in the area of legal and financial arrange - power purchase agreements, known in advance. 2.4. Difficulties for operators to access financing ments for projects. 3. PRIVATE INVESTMENT AND PRODUCTION There is also the need to establish sovereign guarantees to 3.1. IPPs in WAEMU Apart from the legal and regulatory framework, the insti - mitigate the risk of non-payment by national electricity 3.2. Entrepreneurship in solar energy tutional framework may also require adjustments, whether companies. For example, the government may offer a gua - 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION in terms of defining the mandates of the institutions invol - rantee to investors in a solar power plant in the event that 4.1. Initiatives to promote solar ved in solar energy, facilitating coordination, or capacity the national electricity company is no longer able to honor 4.2. Some recommendations and ideas for reflection building. payments for the production of solar energy. The earlier these guarantees are put in place, and the earlier the terms are known in advance, the more likely it is that the project will be developed quickly.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS SOLAR ENERGY IN THE WAEMU ECONOMIES 85 MESSAGE FROM PRESIDENT SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

1. INTERNATIONAL ECONOMIC ENVIRONMENT 2. ECONOMIC ENVIRONMENT IN WAEMU

SECTION TWO ACHIEVEMENTS IN 2018 • Strengthening power transmission basis of analyses of the needs of the environment, develop infrastructure at national and regional level standards to ensure the availability of relevant training. This THEME FOR THE YEAR The power systems in the WAEMU countries are very training effort should be continuous, to enable the various SOLAR ENERGY IN THE WAEMU ECONOMIES small. Some national grids are unstable or obsolete. This actors (technicians, consumers, institutions, etc.) to keep 1. SOLAR ENERGY IN THE ECOSYSTEM means that the intermittent renewable energy absorption up with the latest technologies. OF THE WAEMU REGION capacity can be saturated with a single 20 or 30 MW 1.1. General overview 1.2. The ambivalent interest of off-grid solar solar power plant. This could significantly reduce the As innovation is still necessary to take full advantage of this applications attractiveness for international investors. solar resource in the WAEMU region, the creation of labo - 1.3. Technical capacity and training ratories with state-of-the-art research equipment, as well 1.4. Local manufacturing of solar equipment The strengthening of transport infrastructure will remove as specialized test equipment, is required. 2. MAIN OBSTACLES TO SOLAR ENERGY DEVELOPMENT IN WAEMU this obstacle. This will be achieved through several actions, 2.1. Lack of institutional organization including: i) interconnections between neighboring coun - Sharing experience at the regional level will also contribute 2.2. Legal and regulatory uncertainties tries; ii) improvements to national dispatching centres and to capacity building. Less advanced countries in terms of 2.3. Considerable technical constraints regional harmonization of dispatching procedures; and iii) solar energy could benefit from sharing experience with 2.4. Difficulties for operators to access financing the addition of storage capacity connected to solar plants more advanced neighboring countries (visits to solar power 3. PRIVATE INVESTMENT AND PRODUCTION or located at key points in the grid. WAPP is the main re - plants, sharing of standard contractual documents, etc.). 3.1. IPPs in WAEMU 3.2. Entrepreneurship in solar energy gional organization for strengthening regional transport 4. PROSPECTS FOR SOLAR IN THE WAEMU REGION infrastructure. Multilateral development banks and development finance 4.1. Initiatives to promote solar institutions, in co-financing projects with commercial banks, 4.2. Some recommendations and ideas for reflection • Focus on capacity building could also contribute to the capacity building of these local Local capacity building is essential to accelerate the deve - banks, in terms of understanding the characteristics of solar lopment of solar energy. Public authorities could, on the energy projects and assessing the risks inherent to them.

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS 86 MESSAGE FROM PRESIDENT LIST OF ANNEXES SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ANNEX 1 : Presentation on BOAD and its organization chart as at 31/12/2018 ECONOMIC AND SOCIAL ENVIRONMENT ANNEX 2 : BOAD's governing bodies as at 31/12/2018 SECTION TWO ACHIEVEMENTS IN 2018 ANNEX 3 : Key actions of BOAD's governing bodies in 2018

THEME FOR THE YEAR ANNEX 4 : List of financing approved by BOAD in 2018 SOLAR ENERGY IN THE WAEMU ECONOMIES ANNEX 5 : Profile of projects financed in 2018

ANNEX 6 : List of loan agreements/contracts, bond guarantees, equity investments, arrangements and loans signed in 2018

ANNEX 7 : List of regional projects financed by the Bank

ANNEX 8 : Evolution of net inflows by country as at 31/12/2018

ANNEX 9 : Breakdown of cumulative net commitments as at 31/12/2018

ANNEX 10 : Breakdown of cumulative net disbursements as at 31/12/2018

ANNEX 11 : Governance of BOAD

ANNEX 12 : BOAD staff by category, gender, process and activity as at 31/12/2018

ANNEX 13 : Financial position of the Bank as at 31/12/2018

ANNEX 14 : Key macroeconomic indicators of WAEMU

LIST OF ACRONYMS AND ABBREVIATIONS LIST OF ANNEXES ANNEXES ANNUAL REPORT 2018 TABLE OF CONTENTS 87 MESSAGE FROM PRESIDENT TABLE OF CONTENTS SYNOPSIS ON BOAD AND LOANS GRANTED IN 2018 HIGHLIGHTS OF 2018

SECTION ONE ECONOMIC AND SOCIAL ENVIRONMENT

SECTION TWO ACHIEVEMENTS IN 2018

THEME FOR THE YEAR SOLAR ENERGY IN THE WAEMU ECONOMIES

ANNEXES www.rapportannuel2018-boad.org

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