The European Bank for Reconstruction and Development (EBRD) has invested €38m in in Morocco’s Railway Transition project.
The new €38 million financing agreement follows the 2022 launch of cooperation between the EBRD and the ONCF marked by Morocco’s first green bond in the infrastructure sector.
The EBRD has agreed to invest up to 400 million dirhams (about €38.4 million) in a green bond issued by Morocco’s national railway operator, ONCF.
This bond, valued at 2 billion dirhams (about €192 million), will help refinance ONCF’s recent sustainability-focused development projects.
It is ONCF’s second green bond, following the inaugural issuance in 2022, once again backed by the EBRD.
Sue Barrett, EBRD’s Director for Infrastructure in Europe, the Middle East, and Africa (EMEA), stated: “The EBRD’s participation in this bond issuance demonstrates our ongoing commitment to supporting Morocco’s sustainable railway growth and the development of its financial markets.”
“We also aim to work with ONCF to further develop green financial products while enhancing governance initiatives,” she added.
Proceeds from the bond issuance will be used by ONCF to modernize,renovate, and electrify sections of its railway network, purchase and replace electric trains, introduce new safety features, and improve transport planning.
The bond complies with the Climate Bond Standards and is certified by the Climate Bonds Standard Board. It also includes a guarantee from Tamwil.com, a state-backed Moroccan financial institution.
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Meanwhile, Mohamed Rabie Khlie, ONCF’s Director General, hailed the project as a milestone.
“The success of this second green bond issuance reaffirms ONCF’s commitment to sustainable development. Rail transport plays a crucial role in reducing carbon emissions from mobility, and this bond strengthens our efforts to promote an efficient and environmentally friendly transport system.”
The EBRD remains the sole foreign investor in the bond. The bank has pledged to provide funds to integrate new technologies, preparing ONCF for greater exposure to green financial instruments.
This initiative will also enable ONCF to adopt International Financial Reporting Standards (IFRS) and pave the way for a potential sustainability-linked loan.
Morocco is a founding member of the EBRD and has been a beneficiary of its economic programmes since 2012. The bank has invested over €5.2 billion in 110 projects in the North African country since the start of its operations.
MK/ac/sf/lb/gik/APA