Focus – Winter 2025 edition

Welcome to the Winter 2025 edition of Focus.

In this edition, arbitration partner Nastasha Peter and associate Mama-Sahale Souare review the context in which increasing amounts of environmental, social and governance (ESG) disputes may arise and provide recommendations as to how they should be addressed.

Counsel Pravesh Lallah analyses the potential for the green hydrogen sector in Morocco, highlighting the legal challenges and offering suggestions for regulatory reforms for a burgeoning industry.

Finally, senior associate Sina Abadie and associate Lucas Aichelmann summarise the significant changes brought by the recent revision of WAEMU foreign exchange regulations and its implications for project finance transactions and the mining sector.

News

We are pleased to announce that Trinity International recently opened its fourth office in Singapore.  At the same time, our other Trinity International offices continue to grow their teams.

Trinity International has now opened an office in Singapore, to be known as Trinity International (Singapore) Law Pte. Ltd., to service new and existing clients in the Asia-Pac region.  Currently the team advises lenders, sponsors and governments on ongoing transactions in Uzbekistan, Kazakhstan, Papua New Guinea, Mongolia, the Maldives, India, Sri Lanka, Laos, Cambodia, the Philippines and Indonesia. Partner Fiona Gulliford, Head of Asia-Pacific, has relocated to Singapore and will work together with Partner and Managing Director of the Singapore office, Maxime Damphousse. George Williams joins as Counsel in Trinity International’s new Singapore office. George has a wealth of experience advising on financings, investments and projects across the Asia-Pacific and has previously worked at Anglo-American in Singapore and Hogan Lovells and Gide in Vietnam.

In Paris, we welcome Jérôme Le Berre and Florian Quintard as partners, Rayan Keyrouz as counsel as well as Maïlys Attiogbé and Martin Van Box Som as associates.

As a recognised specialist in tax law, Jérôme brings twenty years of experience in the energy and natural resources sectors across Francophone and Anglophone Africa. His arrival allows Trinity to expand its offerings by adding tax expertise to its range of services, including transactional, project finance, regulatory, and arbitration support.

Florian Quintard also joins the Paris team as partner in the international arbitration practice. Florian is dual-qualified in Paris and England and Wales and has extensive experience in international arbitration, particularly in the construction and energy sectors.

Rayan has more than ten years of experience international arbitration and was previously a senior associate in Shearman & Sterling’s international arbitration team in Paris, Dubai and Abu Dhabi. He represents private companies, State entities and governments in investment treaty and commercial arbitrations under various rules, including ICC, CRCICA and ICSID arbitration rules.

Maïlys specialises in project finance and project development, with a particular focus on advising lenders and sponsors on cross-border energy and infrastructure projects located in developing regions, especially in Francophone and Anglophone Africa. Before joining Trinity International, Maïlys worked for three years as an associate at Clifford Chance.

Martin specialises in Corporate/M&A and Private Equity, with a particular focus on advising investors in their equity and quasi-equity transactions across various sectors in emerging markets, especially in Francophone Africa. Before joining Trinity, Martin worked for four years as an associate at Asafo & Co in Casablanca and Abidjan.

Senior Associates Anne-Gaëlle Cottenceau and Yassine Allam have both been promoted to counsel, effective 1 January 2025.

Trinity’s London office strengthen its global disputes practice by welcoming James Dingley as a partner. James is recognised for his expertise in international commercial and investment treaty arbitration proceedings, in which he has represented a range of States, State-owned entities and private entities. James brings more than 18 years’ experience of resolving complex, high value and politically sensitive disputes to Trinity. Consistent with the Trinity’s own profile, he has particular experience of disputes in the natural resources, energy & infrastructure sectors with a particular connection to emerging markets across Africa, the Middle East, Central and Southern Asia and the wider CIS region.

Our London office also welcomes Grigor Chobanyan as an associate specialised in project finance. Grigor is New York and English law qualified and speaks English, Russian and Armenian.

Sonia Forcada Hincapié joins our Washington D.C. office as an associate. Sonia is licensed to practice in Spain and recently received an LLM from Georgetown, sitting for the NY bar in February. She was most recently a lawyer at MIGA and has a number of years of experience in international corporate and M&A transactions.

In Deal News, since the last edition of Focus, we have been delighted to advise our clients in reaching the following milestones:

• In December 2024, London partner, Jo Sykes, assisted Etana Energy, a South African energy trading company, to achieve financial close in respect of an innovate US$100m default guarantee financing provided by GuarantCo and BII. The guarantee facility will allow Etana to offer credit support to renewable energy generators that it will purchase energy from for onward sale to Etana’s customers. It is expected that the $100m guarantee financing will unlock an estimated $500m of new renewable energy projects, providing a major boost to South Africa’s green energy transition and, in turn, avoiding 1.2 million tonnes of CO2-equivalent emissions annually. Etana’s business model has only recently been made possible by regulatory changes in South Africa that have opened up the opportunity for private power producers to sell electricity to business customers, highlighting the pioneering nature of the transaction.  Companies like Etana are looking to accelerate this opportunity, expanding the addressable market by buying renewable energy from private generators and selling that output to a portfolio of commercial customers by “wheeling” the electricity across the existing transmission network.
• Our London office advised The Emerging Africa & Asia Infrastructure Fund (EAAIF) as lender to a 20 MW solar photovoltaic (PV) plant in north-western Uganda. The project reached financial close in December 2024. EAAIF’s investment will support AMEA Power, the project’s sponsor, to develop critical infrastructure which will bring affordable energy to one of the most remote and underserved areas of Uganda. The project will help the region plug a significant gap between energy supply and demand, supporting remote communities and businesses to overcome frequent load shedding and blackouts and bringing power to hundreds of thousands of people. The project will further accelerate Uganda’s energy transition and reduce reliance on power generated from the highly polluting heavy fuel oil which is frequently used in the West Nile region and will also support Uganda’s plans to achieve universal energy access by 2040, up from around 50 per cent in 2022. The Trinity team, led by London partner, Jo Sykes, included partners Kaushik Ray, Lucy Johnson and Luke Muchamore, counsel Pravesh Lallah, consultant Gail Wong, senior associate Elizabeth Handley and paralegal Jemima Larbi.
• Our Paris office advised the Banque Ouest Africaine de Développement (BOAD), as lead arranger, and the Emerging Africa & Asia Infrastructure Fund (EAAIF) in relation to a commitment to finance € 28 million and € 24 million equivalent in local currency for the 52 MWc Ferke solar photovoltaic (PV) plant in Ferkessédougou, Côte d’Ivoire. The project will be developed by PFO Energies, a wholly owned subsidiary of PFO Africa – one of the largest construction companies in Côte d’Ivoire. This transaction is the first solar IPP in Côte d’Ivoire to announce financing. The team was led by partners Marianna Sedefian, Pierre Bernheim,  Luke Muchamore (London), with support of counsel Yassine Allam, senior associates Sebastian Plamondon and Alexis Giroulet and associate Maïlys Attiogbé.
• The Paris team advised FEI Ongrid LP on the financing of hybrid renewable energy assets, either already deployed or soon to be deployed in Mali by Communication and Renewable Energy Infrastructure (CREI). The project has reached financial close in December 2024. FEI Ongrid LP has committed up to USD 35 million in funding to support CREI’s initiative. CREI is a prominent asset management company with a diverse portfolio of telecom towers and renewable energy assets across Africa and Asia. Its core mission is to deliver sustainable energy solutions and connectivity to Mobile Network Operators (MNOs) and rural communities in developing regions. CREI operates as part of the global telecom services group, TwoThirtyThree Holding Group. The teams was led by partner Marianna Sedefian, with the support of counsel Yassine Allam and associate Maïlys Attiogbé, Associate.
• A team led by London partner Fiona Gulliford, together with senior counsel Barry Burland and lead associates Rita Doureradjam and Katchenin Kone, with support from associate Alexis Giroulet in Paris, on the financing side, and assistance from partners Rinku Bhadoria and Luke Muchamore from London on the project due diligence side, represented lenders, led by The Standard Bank of South Africa, and including Cygnum Capital, in respect of a US$140M senior debt commitment to CrossBoundary Energy to enable CrossBoundary Energy to scale up their renewable energy portfolio across Africa. The financing was fully underwritten by The Standard Bank of South Africa. This groundbreaking transaction brought together commercial and DFI funders committing to support the adoption of renewable energy solutions by businesses across Africa and reached financial close in December 2024. It is hoped that the financing will be the first step in accelerating CrossBoundary Energy’s scale up of its renewable power solutions to Commercial and Industrial clients across Africa, providing a reliable and affordable power source to support business growth in the region. The scale of the financing is significant in a market where access to finance remains an key barrier to companies accessing de-centralised power.
• A London team, led by partner Fiona Gulliford, and including partner Luke Muchamore, associates Katchenin Kone, Rita Doureradjam, Maksym Kodunov and with assistance from Paris partner Marianna Sedefian and counsel Yassine Allam, represented the European Bank for Reconstruction and Development in respect of the financing of the development, construction and operation of a 100 MW Sarimay Solar PV plant, located in the Khorezm region of Uzbekistan. The Project is being developed by French developer, Voltalia S.A. The financing consists of long-term senior debt of US$44.8 million, and includes an EU-backed unfunded guarantee under the EFSD+ HI-BAR program covering a US$ 7.0 million tranche. The Project is another step towards meeting the government of Uzbekistan’s strategic objective of expanding the proportion of renewable energy sources in its national energy mix, with the aim of establishing 25 GW of solar and wind power by 2030. The Project will play a significant role in mitigating the effects of climate change and assisting Uzbekistan in achieving its low-carbon transition target. The Project reached financial close in December.
• Trinity International’s Paris office has advised Qair International, an independent renewable energy company, in the context of the financing of a greenfield solar photovoltaic plant with a total capacity of 10-megawatt to be located in Feriana (Tunisia). The project, financed by EBRD and developed under Tunisia’s authorisation regime, will enable the country to reduce its CO2 emissions by 8,560 tonnes a year and to decrease its reliance on fossil energy. The project is in line with Tunisia’s goal of achieving 30% renewable energy production by 2030. Trinity’s team was led by partners Marianna Sedefian, Pierre Bernheim and Luke Muchamore with the support of counsel Yassine Allam.
• Trinity International’s Paris office has advised Anzana Electric Group (formerly Virunga Power) in relation to the development and financing of two run-of-the-river hydropower IPP projects (1.65 MW and 9 MW, respectively) in Burundi. The project, financed by TDB Group, has reached financial close in January 2025 and adds a significant supply of clean energy in a country where only 10% of the population has access to electricity. Trinity’s team was led by partners Marianna Sedefian, Pierre Bernheim with the support of counsel Yassine Allam and senior associates Alexis Giroulet and Sebastien Plamondon.

ESG Disputes in the Finance Sector

The financial sector plays a key role in achieving environmental, social, and governance (“ESG”) goals. The reason for this is easy to understand: a company’s ability and willingness to undertake a project frequently depends on the extent to which the project is bankable. Financial institutions can thus wield considerable power in determining whether a project is carried out, as well as setting the parameters that the project sponsor is required to respect.

Given the increasing awareness of the importance of ESG, the Trinity arbitration team has seen a rise in the number of disputes involving ESG obligations in facility agreements and other finance documents. We consider below the context in which these disputes arise, as well as our recommendations as to how they should be addressed.

1. ESG in the Financial Sector

Lenders are now increasingly aware of their potential to drive significant change in investment activity, and thus increasingly conscious of the need to adopt responsible ESG practices. A key driver of this awareness has been the discussions around mechanisms to tackle climate change. One of the objectives of the central document of the UNFCCC process, the 2015 Paris Agreement on Climate Change, is to make “finance flows consistent with a pathway towards low greenhouse gas emissions and climate resilient development”.[1]

When the Paris Agreement was adopted during COP21, six major Multilateral Development Banks committed a collective USD 100 billion to support climate change action.[2] Then, at COP26, the private finance sector formed the Glasgow Financial Alliance for Net Zero (GFANZ), bringing together existing and new net-zero finance initiatives into a unified strategic forum. As a result of this amongst other factors, there has been a rapid growth in ESG-linked products in the finance sector. These range from what are referred to as “use of proceeds” instruments, which impose strict requirements for the net proceeds from the relevant bond or loan to be used for the financing of specific environmental projects or assets, to more flexible or ad-hoc instruments.

On the “use of proceeds” end of the spectrum, green bonds and loans have historically had a slow uptake in African markets, but they are now becoming increasingly popular,[3] having for example been issued in Nigeria, South Africa, the Seychelles, Morocco and Egypt, with Zambia issuing its first green bond in 2023.[4] For borrowers requiring greater flexibility, there are a range of instruments which permit use of the funds for general purposes, but tie the cost of the loan or bond to the achievement of specific key performance indicators (KPIs).[5] These could range from objectives such as reducing greenhouse gas emissions or improving energy efficiency, to using renewable energy, reducing water usage, or increasing the use of recycled materials. At the other end of the spectrum, ESG standards have also had an influence on lending practices in plain vanilla finance agreements, with financial institutions imposing conditions on borrowers in these instruments as well.

It is important to recognise that, while this dynamic is most often encountered in the environmental sphere, there are also ESG-linked instruments targeted at social, human rights issues and governance issues as well. In all of these fields, financial institutions have taken on the mantle of stewardship and engagement, using their unique leverage to encourage companies to align with particular goals.

2. ESG Guidance and Standards in the Finance Sector

Given the importance of ESG in investment strategies, lenders have developed various sets of requirements for inclusion in their contractual documents. Typically, Development Finance Institutions (DFIs) and certain commercial lenders will have their own tailor-made schedule of ESG requirements that they will expect borrowers to adhere to. These may cover topics such as anti-corruption, respecting labour rights, environmental protection and so on, together with transparency and reporting obligations to monitor whether the obligations are respected.

In particular, in projects in which the International Finance Corporation (IFC) is a lender, the IFC’s Performance Standards on Environmental and Social Sustainability will usually play a large role in shaping the ESG requirements for the project. The IFC estimates that investments totalling USD 4.5 trillion across emerging markets have adhered to IFC’s Performance Standards or have been inspired by them in the last decade.[6] Similarly, in projects guaranteed by the World Bank’s Multilateral Investment Guarantee Agency (MIGA), clients are required to adhere to MIGA’s Policy on Environmental and Social Sustainability.[7]

Behind these requirements are a large number of initiatives, guidelines and other soft law instruments, which have been influential in developing and promoting best practice. These are too numerous to list here, but some of the best known are as follows:

• the numerous United Nations (“UN”) guidance documents, which in the finance domain include the six UN Principles for Responsible Investment[8] and the six UN Principles for Responsible Banking;[9]
• the Equator Principles, which were first introduced in 2003 and are now in their fourth version,[10] subscribed to by over 130 banks and other financial institutions across 40 countries.[11] The principles are intended to serve as a “common baseline and risk management framework for financial institutions to identify, assess and manage environmental and social risks when financing projects”,[12] and set out environmental and social standards as conditions for providing project-related loans and project finance advisory services to large infrastructure and industrial projects; and
• the Green Loan Principles, voluntary guidelines jointly developed by the Loan Market Association, the Asia Pacific Loan Market Association and the Loan Syndication, which are intended to help standardize green lending practices.[13] The Chancery Lane Project has released a set of draft clauses that can be used to incorporate the GLPs into facility agreements.[14]

Alongside these soft law instruments, lenders will also be concerned to ensure compliance with any applicable legal and regulatory requirements in the relevant jurisdiction, for example relating to the ESG reporting requirements.

As will be appreciated, the dense contractual and legal matrix created by these obligations is a fertile ground for disputes, and mechanisms to resolve these efficiently are essential for the incentivising effect of these standards to function properly.

3. Dispute Resolution Mechanisms in Finance-related ESG Disputes

While financial institutions tend to be wary of arbitration in the context of domestic facility agreements, international finance agreements do frequently include arbitration clauses. As a result, lenders and borrowers can and do use international commercial arbitration to resolve ESG-related disputes. The types of disputes arising in this context are many and varied: for example, they may concern ESG conditions precedent that the borrower is required to fulfil before it can draw down the loan, repeating representations and warranties during the course of loan, monitoring and reporting requirements, and so on.

Arbitration may also be pursued if a borrower’s breach of ESG obligations causes harm to third parties, such as a breach of human rights or environmental damage, and this in turn leads to reputational damage to, or claims against, the financial institution. There is a growing trend for third party stakeholders to bring claims against financial institutions and investors, precisely because of the leverage they have with borrowers,[15] and there is therefore a corresponding potential for indemnity claims to be brought by the lender under its contract with the borrower.

However, in the finance sector, arbitration is generally considered a last resort. Parties will often seek alternative solutions – and this is particularly so in the context of ESG breaches, where the ultimate aim of the lender may be to apply pressure to the borrower in order to ensure compliance with its obligations, rather than to obtain financial compensation. Indeed, the contract itself may contain such mechanisms, for example applying a margin ratchet to penalise the borrower for a breach of its ESG obligations. A dispute-averse approach is in line with the philosophy expressed in the European Union Directive of 13 June 2024 on corporate sustainability due diligence, which cautions that the hasty termination of an agreement for a breach of ESG obligations can cause more harm than good.[16] Similarly, the UN Guiding Principles on Business and Human Rights encourage companies to use leverage before considering termination of relationships.[17]

There are also alternative dispute resolution mechanisms available for third party stakeholders. For example, in projects involving the IFC or MIGA, there is an ombudsman which provides an independent accountability mechanism to hear complaints from individuals or communities affected by the project.[18]

It will therefore be clear that in this field, perhaps more than in any other, arbitration is only a part of the picture. Alternative dispute resolution may provide a forum for a wider dialogue that changes perceptions and behaviours and therefore achieves compliance with ESG obligations. Even where the dispute is intractable and arbitration is therefore required, the interests and motivations of the parties to the dispute (and non-party stakeholders) are complex, calling for creative procedural and substantive solutions.

Parties involved in such disputes should not hesitate to consider alternatives such as negotiation, early neutral evaluation, expert determination or mediation, alongside or prior to any formal disputes process. Those handling disputes in this field will require a broad toolkit, consisting not only of legal and financial acumen, but also of practical on-the-ground knowledge and an ability to listen with sensitivity to the viewpoints of many different stakeholders.

***

The Green Hydrogen Sector in Morocco: A Transformative Opportunity

Introduction

Morocco’s ambition to become a leading player in the green hydrogen sector is evident from its strategic initiatives and substantial investments. The country’s abundant renewable energy resources, particularly solar and wind, and large tracts of undeveloped land and coastline, position it favourably to harness green hydrogen, a clean energy source pivotal for global decarbonisation efforts. However, the development of this nascent sector is fraught with legal and regulatory challenges that need to be addressed to ensure its success. This article critically analyses the potential for the green hydrogen sector in Morocco, highlighting the legal challenges and offering suggestions for regulatory reforms for a burgeoning industry which has the potential to accelerate the industrialisation and modernisation of the North African kingdom.

Potential for Green Hydrogen in Morocco

Morocco’s strategic location, coupled with its significant renewable energy potential, makes it an ideal candidate for green hydrogen production. The Moroccan government has set aside approximately 1.5 million acres of public land for green hydrogen and ammonia plants, aiming to leverage its solar power capabilities and existing fertiliser market.  The national green hydrogen plan, dubbed “L’Offre Maroc” (the Morocco Green Hydrogen Offer) seeks to attract international investment and position Morocco as a competitive player in the global green hydrogen market.

The country’s commitment to renewable energy is further demonstrated by its ambitious targets to increase the share of renewables in installed electricity capacity from 39% in 2023 to 52% by 2030. Additionally, Morocco’s state phosphate agency, the Office Chérifien des Phosphates, plans to produce a million tonnes of green ammonia from green hydrogen by 2027, tripling this amount by 2032.

Legal Challenges in the Development of the Green Hydrogen Sector

Despite the promising potential, several legal challenges hinder the development of the green hydrogen sector in Morocco. These challenges include:

1. Land Allocation and Use: The allocation of land for green hydrogen projects is a critical issue. The Moroccan government has identified significant public land for these projects, but the process of land allocation, reservation, and leasing remains complex and bureaucratic. The preliminary land reservation agreements and detailed feasibility study agreements outlined in the Morocco Green Hydrogen Offer need to be streamlined to provide investors with greater certainty and reduce administrative burdens.
2. Regulatory Framework: According to research by the OECD, the existing regulatory framework for renewable energy in Morocco is less favourable compared to OECD countries and best-performing nations in the region. Early regulations governing renewable energy had a narrow scope and did not establish a clear framework for the relationship between renewable project developers and the state-owned electricity company, l’Office National de l’Electricité (ONEE). Although recent updates have improved the regulatory landscape, further work is needed to guarantee the sale of excess energy of self-producers to the grid operator and support the direct sale of renewable energy to end-users.
3. Infrastructure Development: The development of shared infrastructure, such as ports, transmission lines, pipelines, and water desalination plants, is essential for the operation and maintenance of integrated green hydrogen projects. The indicative timeline for the development of some shared infrastructure is set out in the Morocco Green Hydrogen Offer, but detailed timelines and access conditions are yet to be defined. This uncertainty can deter investors and delay project implementation.
4. Investment Incentives: While the Morocco Green Hydrogen Offer outlines investment incentives, such as custom duties exemptions and tax exemptions, the lack of a specific investment incentive scheme for integrated green hydrogen projects may limit the attractiveness of Morocco as an investment destination. The investment incentives under the new investment charter need to be more targeted and substantial to attract significant private sector investment.

Obstacles in the Moroccan Government’s Regulatory and Legal Frameworks

The Moroccan government’s regulatory and legal frameworks for the green hydrogen sector have been criticised for their complexity, lack of clarity, and insufficient support for private sector investment. The following points highlight these criticisms:

1. Bureaucratic Processes: The process of land allocation and project approval is bureaucratic and time-consuming, creating uncertainty for investors. The phased approach for land allocation and the requirement for multiple agreements (preliminary land reservation, detailed feasibility study, and framework investment agreements) add layers of complexity that can deter potential investors.
2. Regulatory Uncertainty: The regulatory framework for renewable energy and green hydrogen projects lacks clarity and consistency. The relationship between renewable project developers and ONEE remains ambiguous, and the regulatory updates have not fully addressed the challenges faced by private operators in competing with the state-owned utility.

Suggested Reforms and Initiatives

To ensure the success of the green hydrogen sector in Morocco, the following reforms and initiatives are recommended:

1. Integrate Moroccan needs into the green hydrogen strategy: By way of general statement, the African nations developing green hydrogen strategies have principally been targeting an export-focussed strategy with the much awaited X-Links project being a case in point: the gargantuan project is mainly structured to service the UK and Europe’s energy needs. Morocco (and other African nations in the region) should be cautious as to not become subject to an extractive strategy which would then materially affect its own industrialisation and modernisation phase which can be fuelled by green industry.
2. Streamline Land Allocation Processes: Simplify the process of land allocation, reservation, and leasing to provide investors with greater certainty and reduce administrative burdens. Establish clear guidelines and timelines for each stage of the process to enhance transparency and efficiency.
3. Enhance Regulatory Clarity: Further refine the regulatory framework for renewable energy and green hydrogen projects to provide clear guidelines for the relationship between project developers and ONEE. Guarantee the sale of excess energy of self-producers to the grid operator and support the direct sale of renewable energy to end-users.
4. Develop Shared Infrastructure: Define detailed timelines and access conditions for the development of shared infrastructure, such as ports, transmission lines, pipelines, and water desalination plants. Ensure that public-private partnerships for infrastructure development are transparent and efficient.
5. Strengthen Investment Incentives: Introduce a specific investment incentive scheme for integrated green hydrogen projects, offering substantial and targeted incentives to attract significant private sector investment. Consider additional incentives, such as grants, low-interest loans, and risk-sharing mechanisms, to enhance the attractiveness of Morocco as an investment destination.
6. Promote Public-Private Collaboration: Foster collaboration between the public and private sectors to leverage private sector expertise and resources. Establish a dedicated agency or task force to coordinate green hydrogen projects and facilitate communication between stakeholders.

Conclusion

Just as the development of oil and gas reserves has transformed the Middle East from deserted regions to thriving metropolises and playgrounds for the citizens of the world, the green hydrogen sector could have a similar if not greater impact on Morocco’s economic transformation and be a point of reference as to how a green industry can be the catalyst for our era’s industrialisation process.  Just as the Green March led to Morocco’s full political independence, green hydrogen could accelerate the North African kingdom’s accession to economic and energy resilience.

NEW FOREIGN EXCHANGE REGULATIONS IN THE WAEMU ZONE

In December 2024, the WAEMU member States adopted a new Regulation on external financial relations (R06).

Although the regulation does not fundamentally change the existing foreign exchange framework, it marks a significant shift in the BCEAO’s prerogatives by strengthening its role as a key institution in defining, monitoring, and implementing foreign exchange regulations.

Key changes:

1. Redefinition of Current Transactions: The list of current transactions has been narrowed to specific types of transactions, including flows of goods and services, as well as interest and dividend payments. The regulation is unclear whether certain transactions, such as insurance and reinsurance transactions, would fall into this category.
2. Foreign Investment Regulations: Direct investments outside the WAEMU zone remain subject to prior approval from the Minister of Finance, with external financing of at least 75% of the investment. Loans, guarantees and debt acquisitions outside the WAEMU zone are subject to the same regulatory framework. While this not a change introduced by R06, it is a useful reminder of a regime that is usually misunderstood.
3. Repatriation of export proceeds: The obligation to repatriate export proceeds is maintained, although the BCEAO is now responsible for setting (and, possibly, subsequently revising) the applicable deadline.
4. Enhanced Monitoring of repatriation requirements: A “Comité national de suivi du rapatriement des recettes d’exportation” will be established in each Member State to monitor compliance with the requirement to repatriate export proceeds. This monitoring will have two key aspects: in addition to monitoring exporters’ compliance, the committee will also ensure that intermediaries (such as local banks) comply with it. The composition and powers of this committee will be determined by the Minister of Finance of each Member State.
5. FX Bank Accounts: The opening and operation of foreign currency – onshore or offshore – bank accounts remain subject to prior authorisation of the Ministry of Finance, but the responsibility for determining (and, potentially, subsequently revising) conditions relating to the duration or renewal of such authorisations lies with the BCEAO, which may offer the prospect of regimes tailored to the operational requirements of each business sector.
6. Entry into force: While the R06 provides for entry into force upon its signature, the WAEMU Treaty, which provides for the entry into force of regulations upon their publication in the Official Bulletin of the WAEMU, should take precedence (i.e. the R06 should enter into force only when published).

As BCEAO has yet to issue instructions further clarifying the conditions of application of the R06, further developments may be on the horizon.

[1] 2015 Paris Agreement, Article 2.1(c).

[2] Joint Statement by the Multilateral Development Banks at Paris, COP21 Delivering Climate Change Action at Scale: Our Commitment to Implementation.

[3] Tom Minney, “Green bonds bloom in Africa”, 31 July 2024, in African Business: see https://african.business/2024/07/african-banker/green-bonds-bloom-in-africa

[4] See https://www.trinityllp.com/green-bond-zambia/

[5] International Capital Market Association, Sustainability-Linked Bond Principles, June 2020, p. 2.

[6] See https://www.ifc.org/en/what-we-do/sector-expertise/sustainability/policies-and-standards.

[7] MIGA, Policy on Environmental and Social Sustainability, 1 October 2013, para. 6 and MIGA, Guide Understanding MIGA’s Environmental and Social Due Diligence Process, 19 June 2018.

[8] The UN Principles of Responsible Investment are investor initiative in partnership with UN Environnement Programme Finance Initiative and UN Global Compact.

[9] The UN Principles of Responsible Banking are investor initiative in partnership with UN Environnement Programme Finance Initiative.

[10] Equator Principles, Activity Report 2023, November 2024, p.15.

[11] Equator Principles, Activity Report 2023, November 2024, p.38.

[12] The Equator Principles, EP4, July 2020, Preamble, page 3.

[13] LMA, the Asia Pacific Loan Market Association and the Loan Syndication, Green Loan Principles, February 2024.

[14] See: https://chancerylaneproject.org/clauses/green-loan-starter-pack/.

[15] Two recent examples are the claim brought by French environmental NGOs Notre Affaire à Tous, Les Amis de la Terre, and Oxfam France against BNP Paribas in the Paris Courts, alleging breach of the French Law on the duty of vigilance (articles L. 225-102-4 and L. 225-102-5 of the French Commercial Code) and the claim brought by the Dutch NGO Milieudefensie (Friends of the Earth Netherlands) against the bank ING in the Dutch courts, on the basis of a general duty of care under the Dutch civil code.

[16] European Union Directive EU n°2024/1760 of 13 June 2024 on corporate sustainability due diligence, preamble, para. 50: “In order to ensure that appropriate measures for the prevention and mitigation of potential adverse impacts are effective, companies should prioritise engagement with business partners in their chains of activities, instead of terminating the business relationship, as a last resort after attempting to prevent and mitigate adverse potential impacts without success.”

[17] UN Guiding Principles on Business and Human Rights 2011, Commentary, p. 22: “Where a business enterprise has not contributed to an adverse human rights impact, but that impact is nevertheless directly linked to its operations, products or services by its business relationship with another entity, the situation is more complex. Among the factors that will enter into the determination of the appropriate action in such situations are the enterprise’s leverage over the entity concerned, how crucial the relationship is to the enterprise, the severity of the abuse, and whether terminating the relationship with the entity itself would have adverse human rights consequences”.

[18] The Office of the Compliance Advisor Ombudsman: see https://www.cao-ombudsman.org/