World Bank's Landmark Debt-for-Education Swap

Ivory Coast has launched a debt-for-education swap with the World Bank, marking a landmark transaction. The deal involves the country buying back €400 million of expensive debt, freeing up €330 million for education investment. This transaction is the first of its kind by the World Bank.

The World Bank has announced a groundbreaking debt-for-education swap with Ivory Coast, signifying the first transaction of its kind from the institution. This innovative approach allows the West African nation to manage €400 million of costly commercial debt, thereby unlocking €330 million over the next five years for educational initiatives.

Ivory Coast's government will leverage a commercial loan featuring a lower interest rate and extended maturity, facilitated in part by a partial World Bank guarantee. This strategic move is expected to generate at least €60 million in savings, directly boosting the country's education sector.

Such debt-for-development swaps have gained traction recently, serving as a financial tool to support climate, health, education, and green finance projects. The World Bank highlights the cost-effectiveness of this swap, which avoids the financial complexities seen in similar transactions involving multiple entities or special purpose vehicles.

(With inputs from agencies.)