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News July 10, 2020

SEK financing Scania buses in Côte d’Ivoire

With buses from Scania, the city of Abidjan in Côte d’Ivoire is expanding its public transport system so that it can continue to grow and develop sustainably. The Swedish Export Credit Corporation (SEK) is financing the transaction with an export credit of EUR 180 million.

Through a partnership between Scania, Team Sweden, which includes SEK and the Swedish Export Credit Agency (EKN), and Standard Chartered Bank, Scania has been contracted to deliver 450 buses to the city of Abidjan in Côte d’Ivoire in West Africa. The contract also includes building a bus depot and training employees. The buses run on biodiesel and some of them are compatible with biogas.

Scania is a global manufacturer of heavy vehicles and buses, as well as industrial and marine engines. The head office is in Södertälje and the company has been part of Volkswagen Truck & Bus Group since 2015.

“SEK wants to be a positive force in the climate transition. In a close collaboration between Scania, the Ministry for Foreign Affairs, EKN, Business Sweden, Swedfund and SEK, a Swedish financing solution was presented as early as 2017, which has now led to Scania securing the order and the financing is now in place.”

Maria Hultén, Director at SEK

The aim is that public transport in the city of Abidjan will improve life quality, generate local jobs and a deep cut in CO2 emissions in the future by using local sustainable biofuels from agricultural byproducts, which are abundant in Côte d’Ivoire.

The Swedish Export Credit Corporation is financing the transaction with an export credit of EUR 180 million. An export credit is common in major transactions and involves financing to support foreign buyers of Swedish goods or services. EKN is guaranteeing 100 percent of the credit and Standard Chartered Bank, which operates locally in Côte d’Ivoire, has played a vital role and is the arranger and agent for the loan, as well as arranging accompanying down-payment financing.

Faruq Muhammad, Global Head of Structured Export Finance at Standard Chartered Bank, said: “We are very proud to have arranged this financing for the Ministry of Finance in Côte d’Ivoire. Not only does it strengthen our existing relationship with the Government of Côte d’Ivoire and showcase the first financing of this kind we’ve provided for the Government, but it also demonstrates our commitment to supporting the development of critical infrastructure in the local community in which we operate, in collaboration with SEK.”

Financial center of Côte d’Ivoire

Abidjan has five million inhabitants and is a fast growing economy in West Africa. Due to its coastal location, the city has an important export port and is therefore the country’s financial and industrial center, with textile, wood, agricultural, chemical and canning industries.

“In order for the city to develop, a well-functioning and sustainable public transport system is needed. That will increase the mobility of the city’s inhabitants so that more people can enter the labor market. At the same time, sustainable biofuels will help to improve air quality and combat climate change,” explains Nicolas Lougovoy, Head of Strategic Projects, Buses & Coaches, Scania West Africa.