Rabat – The European Bank for Reconstruction and Development (EBRD) gave a loan of MAD 165 million ( €15 million) to Banco Sabadell Succursale Casablanca (BSC) to help finance small and medium-sized enterprises (SMEs) in Morocco.
Both banks signed an agreement for the loan on December 19, allowing BSC to finance SMEs, Maghreb Arab Press (MAP) reported.
Banco Sabadell Branch Casablanca (BSC) was established in 2009 as the Moroccan branch of Spain’s fourth-largest banking group, Banco Sabadell SA (BS).
The news agency added that the agreement is “in line with the strong economic ties between the EBRD, Morocco and Spain, with the presence of a dense network of more than 600 Spanish companies in the Kingdom and a total of almost €4.5 billion in cumulative investments.”
A founding member of the EBRD, Morocco became a country of operations in 2012.
The bank invested approximately €2 billion in Morocco through 60 projects.
Morocco has received multiple loans recently from different international institutions, including the African Development Bank (AfDB), the World Bank, and the European Investment Bank.
Earlier this month, the World Bank pledged to lend Morocco $275 million as a disaster risk management development policy loan.
The African Development Bank (AfDB) approved on November 28 a €100 million credit line for the Municipal Equipment Fund (FEC) to finance new projects of investment and utilities in Morocco. The EU Investment Bank also approved a total of €401.5 million funding to develop renewable energy projects.
The loans raise question about whether the loans will make Morocco’s public external debt unsustainable, weighing down its economic development with the high cost of interest payments.
Several top bankers and officials have warned Morocco of the consequences of high debt.
Last year, the central bank governor, Abdellatif Jouahri, said he expected external debt to rise to 16.6% of Morocco’s gross domestic product (GDP) in 2019, up from 13.8% of GDP in 2018.
Global database website CEIC shows that Morocco’s external debt reached $51.3 billion in March 2019.
