WASHINGTON, October 31, 2024 - The World Bank today approved a €635.5 million International Development Association (IDA) financing package to support the Government of Benin's efforts to strengthen private sector-led growth, boost domestic revenue collection, and strengthen social and climate resilience.
The package includes a Development Policy Financing credit of €135.5 million and Policy-Based Guarantee of €200 million approved as part of the financing package to mobilize €500 million in long-term commercial financing. This is the first IDA guarantee approved since the World Bank Group guarantee platform was launched on July 1st, 2024.
The program rests on three pillars. The first seeks to operationalize a new Private-Public Partnership (PPP) framework. This will aim to attract and facilitate the participation of private sector actors in public projects by improving access to finance for small and medium enterprises, providing guarantees for loans granted by banks and microfinance institutions, and offering capitalization, advice, and other assistance.
The second pillar supports reforms to boost domestic revenue collection, creating the fiscal space needed for public investment and debt sustainability. The third pillar targets reforms to strengthen social and climate resilience. This includes expanding the Single Social Registry, strengthening the disaster risk management system, and adopting regulations for sustainable and resilient cities.
“Benin has embarked on the structural transformation of its economy, which has had a positive impact on growth in recent years. To make this growth more inclusive and resilient, the private sector will need to increase its participation in key economic sectors. The reforms underway regarding public-private partnerships will make the country more attractive for business and support climate financing,” said Nestor Coffi, World Bank Country Manager for Benin. “This financing will also support reforms to protect the most vulnerable, strengthen the social contract, facilitate access to services, and build resilience to climate shocks.”
The operation is aligned with Benin's climate change commitments and the goals of the Paris Agreement. It supports the green, resilient, and inclusive development agenda by strengthening the country's adaptation and resilience to climate change through improved prevention, preparedness, and response capacity.
The financing builds on the achievements of the first operation of the series with financing of $230 million, which advanced reforms to strengthen Benin's capacity to effectively manage disaster and climate risks and increase its resilience to the socioeconomic and fiscal impacts of natural disasters.
