Africa Growing Together Fund provides EUR 5 million loan for WAEMU Regional Mortgage Refinancing Company (CRRH) Project (Linked to Umbrella Project ID#36104)

On May 22, 2014, the African Development Bank (AfDB) and the People's Bank of China (PBOC) signed an agreement for the Africa Growing Together Fund (AGTF) (see Umbrella Project ID#36104). The purpose of this $2 billion loan facility was to finance large development projects in Africa between 2014 and 2024. The AGTF is sponsored by the PBOC and the administered by AfDB. Then, On March 18, 2020, the AFDB approved an EUR 5 million AGTF loan agreement with Caisse Régionale de Refinancement Hypothécaire (CRRH) for the WAEMU Regional Mortgage Refinancing Company (CRRH) Project. On the same day, the African Development Bank approved an EUR 10 million loan for the same project. The borrowing terms of the AGTF were as follows: a 15-year maturity, a 3-year grace period, and an unknown interest rate. The purpose of the project is to help CRRH finance affordable housing loans of up to CFAF 15 million (about EUR 22,866) granted by CRRH's shareholder banks to low and middle-income classes. CRRH on-lends raised resources to shareholder banks as loans to finance their mortgage debt. The resources raised are on-lent to shareholder banks under the same maturity and interest rate conditions, including fees to CRRH. With respect to resource loans from development finance institutions (DFIs) specifically, CRRH imposes on its shareholder banks a maximum margin of 2% between the rates at which they borrow from CRRH and the interest rate they charge on affordable housing loans granted thanks to CRRH resources.

Additional details

1. The AFDB project code is P-NG-AAA-002. CRRH is a key player in the development of the West African Economic and Monetary Union (WAEMU) mortgage market and, through its bond issuance program, in the development of the regional financial market. To meet the high demand for housing loans in the zone, CRRH finances the housing loan portfolios issued by its 55 shareholder banks by raising long-term resources on the regional bond market and from development finance institutions (DFI) to target and reach the low and middle-income classes. CRRH offers two distinct categories of loans to its shareholder banks in line with its two sources of financing: (i) "loans from market resources": for financing non-social housing from funds raised by CRRH on the regional financial market; and (ii) "loans from DFI resources": for financing social/affordable housing from funds raised by CRRH from DFIs. CRRH is a financial institution established on July 16, 2010 with its headquarters in Lome (Togo) and an initial capital of CFAF 3,426 million (about EUR 5.2 million) distributed among 29 shareholder banks. At the end of 2019, 55 WAEMU commercial banks held61% of the share capital, the remaining 39% being held by BOAD (16.1%), IFC (13%), EBID (5.2%), and Shelter Afrique (4.8%), making BOAD the company's largest shareholder. CRRH is responsible for refinancing, exclusively for its shareholders, the loans they grant to their customers. To that end, it raises resources on the financial markets of WAEMU countries through bond issues. It has issued bonds on the regional market 8 times, raising a total of CFAF 162 billion. Since 2017, it has been mobilizing resources from development partners exclusively for financing affordable housing loans, particularly with KFW and World Bank support through BOAD. It should be noted that about 56.9% of CRRH's activities benefitted WAEMU transition countries. 2. The WAEMU zone comprises 8 countries, namely Benin, Burkina Faso, Cote d'Ivoire, Guinea Bissau, Mali (transition country), Niger (transition country), Senegal and Togo (transition country).

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