The European Bank for Reconstruction and Development (EBRD) is investing up to MAD 2 million (€192 million) in the rail sector through MAD 400 billion (€38,4 million) green bonds issued by the Office National des Chemins de Fer du Maroc (ONCF).
The bond issuance will partially refinance debt from ONCF’s latest development round designed to modernize and electrify the grid; purchase and upgrade electric rolling stock; address safety units and transformer substations; and develop and integrate transportation planning systems.
The EBRD is the sole international investor in the bond, which will be compliant with the Land Transport Criteria of the Climate Bond Standards, verified by a second-party review and approved by the Climate Bond Standards Board. The bond will also include a guarantee from Tamwilcom, a sovereign guarantee and business finance provider.
The refinanced projects will support ONCF’s electrification, increase energy efficiency and reduce greenhouse gas emissions, as well as encourage a shift to a more environmentally friendly form of transport.
The Bank’s investment will be accompanied by a technical cooperation package. This will contribute to the creation of a framework for a potential sustainability-linked loan, thus facilitating ONCF’s future involvement in green financial products. The package will also support ONCF’s transition to adopt International Financial Reporting Standards (IFRS).
Sue Barrett, Director of the EBRD Infrastructure team in Europe, the Middle East and Africa (EMEA), said: “EBRD’s participation in this bond issue demonstrates our ongoing commitment to the Kingdom of Morocco to ensure the sustainable growth of its rail network and the development of Moroccan capital markets. We also aim to work with ONCF to develop further green financial products while enhancing its governance initiatives.”
Mohamed Rabie Khlie, Chief Executive Officer of ONCF, said: “The great success of this second green bond issuance is proof of ONCF’s commitment to sustainable development. As we embark on a new round of development, let us not forget that railways are an important tool to reduce our mobility-related carbon footprint and to advocate for a mode of transport that both serves and is kind to the environment.”
This latest transaction builds on the strong partnership between EBRD and ONCF, which began with the issuance of Morocco’s first infrastructure sector green bond in 2022. This joint effort will be a platform for further green initiatives to prepare for ONCF’s new investment plan.
Morocco is a founding member of the EBRD and became an investing economy in 2012. To date, the EBRD has invested more than €110 billion in 5,2 projects across the country.
