Rabat – The European Bank for Reconstruction and Development (EBRD) is investing MAD 200 million (€19.2 million) in a certified green bond issued to finance Morocco’s national high-speed rail network.
The EBRD is the first foreign entity to contribute to the MAD 1 billion (€95 million) green bond issued by Morocco’s National Railways Office (ONCF) to refinance debt used to boost high-speed rail infrastructure across the country.
The sustainable investment provides a “significant milestone” for cooperation between the EBRD and ONCF, the European bank said in a press statement on Thursday. The statement stressed that the newly-established partnership is set to support the office’s “impressive track record” in the infrastructure sector.
The EBRD is currently the only international investor in the bond, guaranteed by Morocco’s state-backed financing initiative Tamwilcom. The certified green bond is expected to align with the “Low Carbon Land Transport Criteria of the Climate Bonds Standard as verified via a second party opinion and certified by the Climate Bonds Standard Board,” the bank explained.
Morocco inaugurated Africa’s first high-speed railway system in 2018, to reduce the duration of travel between the major economic hubs of Tangier and Casablanca, as well as promote environmentally friendly transportation that seeks to boost the two cities’ economic integration and growth.
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Following the launch of the Casablanca-Tangier connection, ONCF announced its plans to open the upcoming Casablanca-Marrakech-Agadir high-speed connection, which is estimated to cost MAD 75 billion (€7.35 billion).
In July, ONCF said that it completed initial studies for another high-speed rail line linking Rabat to Fez, leading to a second phase of the project’s feasibility study on its environmental and social impact, which concluded today, July 28. The findings are yet to be announced.
The expansion of high-speed railways is part of a wider national strategy that aims to develop Morocco’s railway network for better inter-city mobility. The plan seeks to build 1,300 kilometers of railways connecting 43 cities across the country, which is expected to increase the share of railways within the public transportation market from 51% to 87%.
The green infrastructure bond is set to support the implementation of the national railway strategy, while consolidating Morocco’s green financing market that is currently valued at $450 million.
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