Lomé Container Terminal (LCT) is a nationally incorporated company operating in the Gulf of Guinea. In December 2008, the Government of Togo awarded the company a 35-year concession—with an optional 10-year extension—to develop, construct, and operate a container cargo terminal within the Port of Lomé. In 2011, IFC provided a total of €82.5 million in loans to LCT and also mobilized approximately €142.5 million from other lenders. Construction works started in 2012, and the terminal has been operational since October 2014. In 2015, IFC provided LCT with additional financing of €10 million. IFC’s loans to LCT were fully repaid on December 15, 2023, ending the financial relationship.  

In March 2015, CAO received a complaint submitted by Collectif des personnes victimes d’erosion côtière (Collective of persons victims of coastal erosion), a community association representing riverine settlers who claim to be negatively impacted by construction of the project. The complaint cites concerns about land erosion in their communities, lack of consultation or information about the project, and issues related to the project’s Environmental and Social Impact Assessment (ESIA).

In March 2015, CAO found the complaint eligible and conducted an assessment. During the assessment, there was a lack of consensus amongst the parties to engage in a CAO-facilitated dispute resolution process. In accordance with CAO’s Operational Guidelines, the complaint was referred to CAO Compliance for appraisal. After completing the compliance appraisal in November 2015, CAO concluded that the issues warranted further investigation. The investigation was conducted with reference to IFC’s 2006 Sustainability Policy and Performance Standards which were applicable at the time of IFC’s investment in LCT.

In October 2016, CAO completed its compliance investigation making several findings of non-compliance in relation to IFC’s appraisal and supervision of the E&S risks and impacts of the project. CAO found that IFC’s E&S appraisal did not identify coastal erosion as a risk of the project and did not adequately review the assessment of risks and impacts, including cumulative risks and impacts related to the project. This was despite the ESIA acknowledging potential erosion impacts during construction and the historical erosion impacts since the Port of Lome was constructed in the 1960s. IFC was thus non-compliant with its Sustainability Policy. CAO also found IFC to be non-compliant with the requirement to ensure that the client’s action plan reflected measures to mitigate erosion risks in accordance with Performance Standard (PS) 1. Finally, CAO found that IFC had not assured itself that all affected communities in the project area of influence had been adequately consulted in accordance with PS1 requirements.

In relation to IFC’s supervision of the project, CAO found that actions agreed between IFC and its client in February 2016 regarding the project’s impacts on coastal erosion were insufficient in several respects. This included timeliness and assurance that the client’s commitment to fund research on coastal erosion would meet PS1 requirements for environmental assessment and consultation with affected communities.

Overall, CAO found that IFC did not assure itself that the client was responding “to community concerns about the project” or engaging in consultation “on an ongoing basis as risks and impacts arise,” as per the requirements of PS1. Further, CAO found that IFC had not provided advice which would bring the client back into compliance as per the Sustainability Policy.

CAO Monitoring Reports

In March 2018, CAO released its first monitoring report. The report recognized positive actions taken by IFC at the level of policies, procedures, and knowledge. These included updated guidance in 2017 in the World Bank Group Environmental, Health, and Safety (EHS) Guidelines for Ports, Harbors, and Terminals related to the assessment of project impacts on coastal processes. CAO also acknowledged several actions initiated by IFC at the project-level. These actions were at the initial stages of implementation and had not yet substantially addressed CAO’s investigation findings.

In April 2019, CAO released its second monitoring report. The report noted that LCT had commissioned both an environmental audit, including a component on coastal erosion as part of the renewal process for its government environmental license, and a study on the contribution of different infrastructure projects to coastal erosion. CAO acknowledged these positive steps toward addressing the non-compliance findings, and indicated that it expected to review these studies, together with appropriate corrective actions, prior to concluding its monitoring.

In August 2021, CAO released its third monitoring report. The report noted IFC and LCT’s actions between May 2019 and July 2021 in relation to the assessment of impacts and sources of coastal erosion. This included the completion in 2020 of a government-required environmental audit, which was disclosed on IFC’s website, but which did not assess the relationship between the LCT project and coastal erosion. LCT also initiated a study on coastal erosion in early 2019, which was finalized in April 2020. However, both LCT and IFC had questions about the study’s methodology and findings and were in the process of reviewing it at the time. As a result, the question of whether the LCT’s construction had contributed to coastal erosion remained open from a technical perspective. CAO noted, however, that it was uncontested that the Port of Lomé, in which LCT is the largest operator, had historically been, and continued to be, a contributing factor to coastal erosion east of the port. Finally, CAO noted that erosion impacts associated with the project due to its reliance on the Port of Lomé infrastructure continued to affect complainants.

In April 2024, CAO released its fourth monitoring report. The report covered IFC actions between August 2021 and December 2023. CAO observed that the finalization of a coastal erosion study in 2022 is a significant milestone for IFC and included, among other sources of erosion, an estimate of the LCT project’s contribution to coastal erosion. CAO acknowledged that IFC actively supported its client in commissioning and finalizing this study and had made efforts to encourage disclosure of the study in accordance with PS1 requirements. At the time of publication, however, these efforts had been unsuccessful, and the study has still not been disclosed more than two years after its completion. This lack of disclosure remains a non-compliance with PS1.

In addition, delayed disclosure of the study’s findings has prevented any mitigating and remedial actions from being taken to address coastal erosion impacts related to the LCT project’s construction. Based on the coastal erosion study and additional expert advice received, CAO stated it was satisfied that the link between the IFC-financed project and erosion impacts has been demonstrated. CAO found that, consistent with the Sustainability Policy and PS1, IFC should have worked with its client and other relevant stakeholders to assess project-related erosion impacts on coastal communities. Finally, the report discussed allegations of client intimidation during the monitoring period and the related low-trust environment between the client, the complainants, and other coastal community members.

On the basis that this monitoring report was published after the end of IFC’s financial relationship with its client, CAO recommended the following actions for prompt implementation by IFC to address the remaining non-compliances:

• Increase efforts and use remaining leverage with stakeholders to ensure the disclosure of the coastal erosion study and its findings;
• Work with LCT to assess project-related erosion impacts on coastal communities downdrift of the project, in consultation with affected communities, and identify related mitigating and remediating measures; and
• Continue supporting LCT to improve its stakeholder engagement and awareness of risks to communities according to good international industry practice and guided by PS1.

Given the remaining non-compliances and CAO’s appraisal of a third complaint related to IFC’s investment in LCT (LCT-03) in November 2023, which resulted in a decision to merge the LCT-01 and LCT-03 cases, CAO will keep this case open in monitoring and will publish a follow-up monitoring report in FY2025.

All documents relating to this case are available under the "Case Documents" section below.