IFC, Société Générale and BNP Paribas in joint venture to finance cotton campaign in Burkina Faso
IFC, a member of the World Bank Group, announced a €65 million financing facility with Société Burkinabè des Fibres Textiles (SOFITEX) to finance the 2017-2018 cotton campaign in Burkina Faso.
IFC will finance €28.5 million of the facility, while Société Générale will also provide €28.5 million and BNP Paribas an additional €10 million financing.
The facility will allow SOFITEX to buy cotton from its producers, gin, it and convey it to the Abidjan, Cotonou and Lomé ports, from where it will be exported to international markets.
The facility will also allow financing of more efficient storage of cotton in warehouses, which contributes to reduced post-harvest losses. Improving yields and reducing post-harvest losses are key elements of IFC’s strategy to support climate-smart agriculture.
Samuel Dzotefe, Manager, Agribusiness, Sub Saharan Africa, IFC, said ‘‘Our partnership with SOFITEX, Société Générale and BNP Paribas is important to encouraging agricultural production in Burkina Faso. Cotton provides for the livelihood of more than three million Burkinabè and is the country’s second largest source of foreign currency. This financing is part of a broader effort involving investment and advisory for IFC to support a sector that is vital for Burkina Faso’s economic growth.”
IFC has been providing similar financing to SOFITEX since 2015. That year, in partnership with Société Générale, IFC committed a €70 million facility to finance the cotton campaign. In 2017, BNP Paribas joined IFC and Société Générale to finance the facility for €90 million.
Since November 2016, IFC, the World Bank and SOFITEX have been implementing the Smallholder Water Management and Irrigation Program. The program is helping SOFITEX’s producers improve how they manage water and soils, notably by setting up anti-erosion stone contour lines and collecting rain fall in basins to use it as supplemental irrigation. The program is working to help producers improve their yield and so increase their revenue.
Investment and advisory in Burkina Faso are an important part of IFC’s effort to encourage climate smart agricultural development in the Sahel region. IFC’s engagements support a broader World Bank Group’s commitment to finance the country’s National Economic and Social Development Program.