The Project, through PEPT Fund, is expected to enable prefinancing of the connection costs and thereby allowing connection of low-income households that otherwise would not afford connecting to the grid. This will support Côte d’Ivoire’s objective of reaching universal access, while also delivering economy-wide effects including employment and value added. At the market level, Project is expected to improve financial integration by introducing a new asset class that financially integrates the power sector to capital markets through securitization of receivables from the national electric grid and may serve as a meaningful demonstration of the use of local capital markets to raise long-term funding for infrastructure assets. The Project is part of the World Bank Group’s Joint Capital Markets Program umbrella to develop and deepen WAEMU’s capital market by diversify and increase the instrument and assets classes as well as broadening and deepening the subregional investor base.

The SPV’s underlying assets are commercial receivables from low-income households, originated and managed by Compagnie Ivoirienne d’Electricité, the national grid company (“CIE” or the “Servicer”) corresponding to grid connection costs.  Proceeds from the Asset Backed Securities will be strictly tied to financing of grid connection to facilitate access to electricity for the unserved population. As such, the activities supported under this ABS are expected to comprise business activities with limited adverse environmental and social risks or impacts that are few, generally site-specific, largely reversible, and readily addressable through mitigation measures. The Project has been categorized as FI-2, in accordance with IFC’s Environmental and Social Sustainability Policy. As part of the project, the SPV and PEPT will be required to screen the activities and operations of the Servicer against the IFC Exclusion List and national environmental and social (“E&S”) laws and regulations in Côte d’Ivoire. The project is not expected to support Coal and Higher Risk Transactions that may include a) involuntary resettlement, b) risk of adverse impacts on Indigenous Peoples, c) significant risks to or impacts on environment, community health and safety, biodiversity, cultural heritage, or d) significant Occupational Health and Safety risks.

The main E&S risks and impacts of this project relate to the ability of the SPV and PEPT to identify and manage the potential E&S risks and impacts associated with the activities as well as enforce and coordinate with the Servicer to manage these risks. The E&S risks and impacts associated with the project are typically low to medium environmental and social risks such as labor and working conditions, waste management and occupational health and safety, etc.

The issuer (the SPV) and the seller (PEPT Fund) are both funds created for the purpose of this project and therefore do not have employees nor E&S procedures. The issuer and the seller are required to put in place credible mechanism to make sure the Servicer operates in line with IFC requirements, including the IFC Exclusion list and the national E&S laws and regulations in Côte d’Ivoire and the actions agreed upon with the Servicer at appraisal are implemented.