EBRD Invests €38.4M In Moroccan Railway Green Bond

European Bank for Reconstruction and Development (EBRD) has proceeded to invest into Morocco's railway sector up to MAD 400 million (€38.4 million). This investment partakes in the MAD 2 billion (€192 million) green bond by the Office National des Chemins de Fer du Maroc (ONCF). This historical milestone achieves modernization and electrification of the railway infrastructure. It is an initiative that reinforces Morocco's ability in sustainable improvements in transportation and green financial solutions.

The greatest portion of the money collected from that green bond would be channeled towards various projects improving the railway network throughout Morocco. Some of which would modernize the system, provide electric rolling stock capabilities, and implement all energy-efficient measures in accordance with the international sustainability frameworks. Moreoever, the investment will also enforce safety measures in the railway network, guaranteeing a more reliable and sustainable mode of transport for passengers and goods across the whole country.

Sue Barrett, EBRD's EMEA Infrastructure Director, was emphatic on the strategic significance of this investment, which she said was indicative of the ongoing commitment of the bank to sustainable growth in Morocco. Barrett pointed out that the railway network constituted one of the most important infrastructural components in the whole of Morocco and played a major role in saturation of its environment with respect to emissions.

In 2022, the partnership was founded on EBRD's investment in the first green bond specifically for Moroccan infrastructure, thus forming the second large-scale joint effort between the bank and ONCF. The first investment provided a foothold for this initiative, by bringing the bank and ONCF closer together, and serving as an example for green financing projects in Morocco's transport sector.

Mohamed Rabie Khlie, CEO of ONCF, is thrilled by the successful issuance of this second green bond. He stressed that the railway will become a very effective carbon offsetting tool for bringing environmentally-friendly transport solutions. Khlie went on to underline that such a development harmonized with ONCF's continuous pursuit of sustainability in its operations and established the company as a leader in green mobility.

The EBRD investment meets the Climate Bond Standards and is further guaranteed by Tamwilkom. In addition, an attached technical cooperation package will be introduced to assist ONCF's transition to International Financial Reporting Standards (IFRS) and open up the financing option for a sustainability-linked loan. It is an all-encompassing approach not just for the EBRD financial investment but also for operational and financial architecture advancement across ONCF in the long-term sustainability approach.

Morocco, a founding member of EBRD back in 2012, had already received its over €5.2 billion investments into more than 110 projects. Most of these projects covered various sectors, including renewable energy, infrastructure, and financial services, contributing to economic growth and sustainable development for the country. The latest investment in the green bond has put Morocco ahead as the leader in adopting environmentally friendly financial practices in the region.

This bond issuance thus comes at a critical period when Morocco continues to focus on developing its transport infrastructures while addressing environmental challenges at large. Railways are recognized as one of the major components of reducing emissions within the transport section; thus, this investment stands objective to putting the country in a more achievable position with regard to green transition.

With the EBRD as the only international investor for this particular bond, this move was also to affirm that the country is doing well at transitioning into "green." Yet more is in store for this whole growth experience across sustainable finance. That magic wand of ONCF will, therefore, play a significant part in getting things rolling for many more green financial activities, all of which are to the benefit of the railway sector in Morocco, but also set the pace for others in the region.

Partnerships like this between the EBRD and ONCF are increasingly seen as showcasing the need for international collaboration and investment in achieving green development goals, as the world shifts to sustainable and increasingly eco-friendly practices. The positive outcome from the green bond issuance indicates that the country stays firm in its long-term commitment to sustainable development within the realm of transportation systems and capital markets.

Looking forward, EBRD support will be significant in moving ONCF toward its next plan for investment concerning the ongoing application of railway infrastructure development in this country. This signing proves, then, that green finance will very much work in creating positive environmental and economic outcomes while promoting sustainable growth.