Rabat – The European Bank for Reconstruction and Development (EBRD) has agreed to invest up to MAD 400 million (€38.4 million) in a green bond issued by Morocco’s national railway operator, ONCF.
This bond, valued at MAD 2 billion (€192 million), will help refinance ONCF’s recent development projects focused on sustainability.
This is ONCF’s second green bond after the inaugural one in 2022, again supported by EBRD.
Sue Barrett, EBRD Director for Europe, Middle East, and Africa (EMEA) Infrastructure team, said, “The EBRD’s participation in this bond issue demonstrates our continued commitment to the Kingdom of Morocco in terms of ensuring the sustainable growth of its railway network, as well as the development of Moroccan capital markets.”
“We also aim to work with ONCF to develop further green financial products while enhancing governance initiatives,” she added.
The proceeds from the bond will be used by ONCF to upgrade, renovate and electrify sections of its rail network, purchase and replace electric trains, add safety features, and improve transport planning.
The bond came after the Climate Bond Standards, with certification from the Climate Bonds Standard Board. It also includes a guarantee from Tamwil.com, Morocco’s state-backed financing institution.
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Mohamed Rabie Khlie, ONCF’s Chief Executive Officer, described the project as a milestone.
“The success of this second green bond issue confirms ONCF’s commitment to sustainable development. Railways play a key role in cutting carbon emissions from mobility, and this bond strengthens our efforts to promote an efficient and environmentally responsible mode of transport.”
EBRD remains the sole foreign investor in the bond. The bank says it will provide funds to incorporate these new technologies to ready ONCF for its future exposure to green financial instruments.
The package will allow ONCF to adopt International Financial Reporting Standards (IFRS) and pave the way for a possible sustainability-linked loan.
The new agreement follows the start of cooperation between the EBRD and ONCF in 2022 with Morocco’s first infrastructure sector green bond. The two institutions are also set to cooperate on other new projects in the green sector.
Morocco is one of the EBRD’s founders and an economic investee as of 2012. The bank has invested more than €5.2 billion in 110 projects in the North African country since operations began.
