This is the first green bond issuance in foreign currency in Morocco, as well as IFC and Proparco’s first green bond investment in the region.
The 10-year maturity bond will be used to provide long-term funding for BCP, one of Morocco’s largest banking groups, to refinance investments in selected renewable energy projects in the Kingdom.
A key objective is to help create a sustainable financing mechanism for banks to support long-term investments in green assets, by channeling private institutional money to climate finance through capital markets.
“This strategic operation cements our position as a pioneer in the financing of renewable energy projects," said Abdeslam Bennani, Deputy CEO in charge of Corporate and Investment Banking at BCP. “It also recognizes the confidence and trust placed in the BCP Group by the largest international financial institutions.”
“This historic investment is in line with commitments made by Morocco during COP22 in Marrakech, last year,” said Yazid Safir, Proparco Regional Representative in North Africa. “This pioneering operation for Proparco will allow us to stimulate the Moroccan capital market and develop new subscriptions for green bonds in other regions, while further strengthening our long-term partnership with the BCP group.”
IFC’s investment is part of its strategy to create markets by unlocking investment for private sector projects, and meet the increasing demand for renewable energy and energy-efficient projects.
“Addressing climate change is a priority for IFC in the region and Morocco is an active player in this area,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa. “By building on our long-term partnership with BCP, we aim to encourage more private sector investment in long-term renewable energy projects, paving the way for more sustainable economic development and growth.”
The financing is expected to help save 938,000 tons on average of CO2 emissions equivalent per year, as well as the equivalent of 17.36 million tons of CO2 in greenhouse gas savings over the remaining lifetimes of the projects being financed.
IFC’s Climate Investment Opportunities Report, released in November 2016, identified $23 trillion in investment opportunities in 21 emerging market countries by 2030, and $68 million in Morocco alone in select sectors.
Climate is also central to Proparco’s priorities, with the institution earmarking €2 billion by 2020 for green projects.
IFC’s green bond program helps funnel private investment into low-carbon projects. As of June 2017, IFC had issued $5.8 billion in green bonds in 12 currencies.