The EBRD allocates 38 million euros to boost the railway transition in Morocco

The European Bank for Reconstruction and Development (EBRD) will allocate an investment of up to 400 million MAD (equivalent to 38.4 million euros) to a green bond issued by the Moroccan National Railways Office (ONCF). 

This bond, with a value of 2 billion MAD (192 million euros), will enable the refinancing of ONCF's recent sustainable development projects. This is the second green bond issued by ONCF, following the first in 2022, also backed by the EBRD. 

Sue Barrett, EBRD's Director of Infrastructure for Europe, the Middle East and Africa (EMEA), emphasised that ‘the EBRD's participation in this bond issue reaffirms its commitment to the Kingdom of Morocco, supporting both the sustainable growth of its rail network and the development of Moroccan capital markets’. ‘We also seek to collaborate with the ONCF to develop more sustainable financial products and, at the same time, strengthen governance initiatives,’ he added. 

The funds obtained through the bond will be used by the ONCF to improve, renovate and electrify sections of its rail network, as well as to acquire and replace electric trains, incorporate new safety measures and optimise transport planning. 

The bond was issued following approval of the climate bond standards, with certification from the Climate Bonds Standard Board. It is also backed by Tamwil.com, the financial institution backed by the Moroccan state. 

Mohamed Rabie Khlie, CEO of ONCF, described the project as a milestone. ‘The success of this second green bond issue reaffirms ONCF's commitment to sustainable development,’ said Khlie, who recalled that ‘railways are key to reducing carbon emissions associated with mobility,’ so this bond ’reinforces efforts to promote an efficient and environmentally friendly mode of transport.’ 

The EBRD continues to be the only foreign investor in the bond. The bank emphasises that it will allocate funds to incorporate new technologies, with the aim of preparing the ONCF for its future participation in green financial instruments. 

This package will enable the ONCF to adopt International Financial Reporting Standards (IFRS), also paving the way for a possible sustainability-linked loan. 

This new agreement follows the start of the EBRD and ONCF's collaboration in 2022, with the issuance of the first green bond in Morocco's infrastructure sector. Both institutions also have plans to cooperate on future projects within the green sector. 

Morocco, which is one of the founding countries of the EBRD and an economic investor since 2012, has been key in the bank's operations. Since it began operating, the EBRD has invested more than 5.2 billion euros in 110 projects in the North African country. 

The Moroccan railway network is a key transport system for the country as it connects the main cities and regions, facilitating the movement of people and goods. The railway network covers approximately 2,000 km of track, connecting important cities such as Casablanca, Rabat, Marrakech, Fez and Tangier.