Aktuelle Rechtsthemen

1. C&I self-generation structures and the concept of a credit transaction in the WAEMU area

From an economic standpoint, a C&I project may be structured in several ways: alongside an operation and maintenance agreement for a solar power generation installation between the developer and the customer, the parties may enter into a sale of the installation to the customer, a lease of that installation, a lease with a purchase option, or a dissociation between the supply of the asset and the financing of its acquisition. The determining factor, however, remains constant: as soon as the developer no longer merely builds or maintains the installation, but also arranges for it to be made available over time, with an acquisition by the customer at the end of the lease period, banking law may apply.

In the WAEMU area, which includes Senegal, Mali, Burkina Faso, Niger, Côte d’Ivoire, Benin, Togo and Guinea-Bissau, this banking law is defined by the national banking laws of the WAEMU Member States, drafted on the model of the WAEMU Model Banking Law.

The latter defines credit institutions as legal entities which, by way of their usual business, carry out banking transactions. Such transactions include credit transactions. Finance leases and, more generally, any lease transaction with a purchase option are treated as credit transactions. (WAEMU Model Banking Law, Articles 2 and 6)

Finance lease transactions are to be understood, in particular, as transactions involving the lease of equipment, machinery or tools which give the lessee the possibility of acquiring all or part of the leased assets, on a date agreed with the owner, for a price agreed by the parties and taking into account the payments made by way of rent.

Any person not licensed is prohibited from carrying out, by way of usual business, banking transactions, including credit transactions. Nevertheless, an undertaking may grant its contracting parties payment extensions or advances in the ordinary course of its business activities.

These concepts are, of course, also found in national laws, for example in Benin (Law No. 2024-14 of 2 September 2024 on banking regulation), in Côte d’Ivoire (Ordinance No. 2009-385 of 1 December 2009 on banking regulation), and in Senegal (Law No. 2025-03 of 11 February 2025 on banking regulation in Senegal and Law No. 2012-02 of 3 January 2012 on finance leases).

Senegalese legislation is somewhat more specific, in that it defines a finance lease as a lease transaction relating to assets for professional use, coupled, ultimately, with a right of acquisition for the lessee, and specifies that a finance lease agreement must be clearly distinguished from a simple lease, a sale, a hire-purchase arrangement, a credit sale, an instalment sale, and similar contracts.

This distinction drawn by the Senegalese legislature is particularly pertinent. Neither a hire-purchase arrangement nor an instalment sale confers on the beneficiary of the sold asset a mere possibility of acquiring it. In reality, the beneficiary does not have an option. It acquires it.

A comparison may also be drawn with French law, which likewise reasons from a right of acquisition granted to the lessee: Article L. 313-7 of the Monetary and Financial Code likewise refers to transactions which “give the lessee the possibility of acquiring” the leased asset. The Cour de cassation thus upheld the refusal to characterize a contract as a finance lease where no unilateral promise of sale by the lessor, no purchase option, and no acquisition price at the end of the contract had been agreed (Cass. Com., 18 September 2012, No. 11-19.764).

2. Contractual structures that may be contemplated in light of this constraint

The first possible structure is the conclusion, between the developer and the end customer, of an agreement for the lease of the installation with a purchase option for the latter, the developer itself being licensed as a financial institution by the BCEAO to offer such a service, or acting on behalf of a licensed financial institution which would provide the financial lease of the equipment to the end customer. In practice, however, such a structure is unlikely to be competitive.

A second possible structure is an instalment sale agreement for the installation, within the scope of the exception provided by WAEMU law for payment extensions or advances granted by an undertaking in the ordinary course of its business activities (WAEMU Model Banking Law, Article 14, 1°; Ivorian Ordinance No. 2009-385, Article 14). The installation is thus legally sold subject to a retention of title. Each month, the customer pays the developer partly toward the price and partly for maintenance and operation services.

However, caution is required: the characterization does not depend solely on the fact that the price is paid in instalments, but on the overall economics of the structure. If the payment schedule, its cost and its terms reveal a habitual financing activity distinct from the principal sale transaction, the risk of recharacterization cannot be excluded. (WAEMU Model Banking Law, Articles 6, 13 and 14; Beninese Law No. 2024-14, Article 19.)

A third structure often contemplated is the hire-purchase agreement. The customer pays the developer each month partly as rent for the installation and partly for operation and maintenance services. In order to avoid characterization as a finance lease, it will at the very least be necessary to exclude any purchase option in favour of the end customer at the end of the lease period. However, that will not be sufficient. It will also be necessary to define carefully the terms of payment of the purchase price in order, so far as possible, to avoid having the payments made by way of rent taken into account.