Morocco’s Bank of Africa to Issue Its First Social Bonds

Rabat – Bank of Africa (BOA), Morocco’s third-largest banking group, is gearing to launch its own line of Social Bonds, a financing tool dedicated to support projects that could potentially address social issues.

After gaining board approval in late May, BOA is preparing to introduce the socially responsible financing tool under a budget cover of MAD 500 million ($48.5 million).

In early May, BOA announced the signing of a technical collaboration agreement with the European Bank for Reconstruction and Development (EBRD).

Under the agreement, the EBRD committed to assist BOA throughout the process of issuing the Social Bonds.

The EBRD would reportedly contribute 50% of the underlying capital.

EBRD’s technical assistance for BOA would include analysis services to identify “the main gaps in BOA’s capacity, resources, assets, and processes following recognised green, social, and sustainability bond standards,” the European bank said in a previous statement.

The two parties would work to develop “an action plan for the adoption and implementation of a sustainable finance framework in preparation for BOA’s issuance of green, social, and sustainability bonds,” the statement adds.

The Moroccan bank has repeatedly said that the strategic venture aims to help the bank tap into the country’s innovative Small and Medium-Sized Enterprises (SME).

The financing vehicle would also allow BOA to rely on sustainable financing to bring profit to its shareholders while at the same time contributing to the growth of key sectors, including infrastructure, industry, and energy among others.

Commenting on the venture, EBRD President Odile Renaud-Basso has said that the EBRD-BOA collaboration would “strengthen Morocco’s capital markets and help build a sustainable and resilient financial sector.”

According to Renaud-Basso, the collaboration would equally “pave the way for replication by other local financial institutions, triggering a change in the sector to support and enhance the use of bond issuance that incorporates a green and social impact.”