OCP Morocco issues 2 billion dollars worth of bonds on the international market
OCP Group has returned to the international financial market. It is the first time that the global phosphate fertiliser giant has announced its strategic development plan for 2023-2027, which aims to rely exclusively on renewable energy sources to power its industrial processes.
The group led by Mustafa Terrab launched a round with international investors to raise 2 billion dollars in bonds and fund its development plans, Reuters reported, citing sources close to the company.
OCP Group's new plan will transform Morocco by introducing new industries such as desalination plants, green hydrogen and ammonia plants and an extensive network of new mines and production facilities, backed by a large network of sustainable energy farms.
Behind the bond issue is the overspending that the Moroccan company had to bear due to rising commodity prices caused by the war in Ukraine. To avoid supply problems, the company signed a contract with the US company Koch Industries to buy ammonia from North America.
The Moroccan group reportedly appointed BNP Paribas, Citi and JP Morgan to manage the deal. OCP Group's last entry into the bond market was in 2021, with a volume of 1.5 billion dollars. OCP Group's new green investment programme (2023-2027) is based on increasing fertiliser production capacity and a commitment to achieve carbon neutrality by 2040 through unique renewable energy sources containing them.
Consolidating OCP's global presence, the programme foresees an overall investment of approximately 13 billion dollars, reaching a local integration level of 70%, supporting 600 Moroccan industrial companies and creating 25,000 direct and indirect jobs.
As part of its commitment to clean energy, OCP Group has set itself the goal of supplying green energy to all its industrial units by 2027, harnessing the potential of wind, solar, hydro and thermal energy sources.
In addition to this investment plan, it aims to eliminate the group's dependence on imports of ammonia, a key raw material for fertiliser production, as OCP plans to use green hydrogen to meet its ammonia demand. OCP has also committed to producing 200,000 tonnes of green ammonia by 2026 and has an ambitious target of 1 million tonnes over the next four years.
The phosphate giant plans to further expand production to 3 million tonnes by 2032. This ambitious plan is in line with OCP Group's commitment to use 100% green ammonia in its products.
Another key focus of OCP Group's new green investment strategy is to directly address Morocco's key challenges.
The country faces severe water shortages and periodic droughts and imports 90% of its energy needs. These two structural weaknesses pose significant risks to the country and are a key element of the OCP Group's large-scale investment plans.
The current water crisis in Morocco not only threatens the local population, agriculture and nature; it is a pressing issue for the water-intensive production of phosphate fertilisers, Morocco's most valuable export product.
Water is essential to transport the mined phosphate rock, produce phosphoric acid and is an essential component of a variety of other elements to produce the fertilisers that farmers around the world need to feed the world's growing population.
The new OCP investment plan is an important contribution to Morocco's efforts to reduce the trade deficit, create new jobs for future generations, strengthen the entrepreneurial ecosystem and reduce dependence on foreign chemicals and fossil fuels. With the OCP aligned with the government's ambitions, the cluster has funding, support and detailed plans for the next five years.