EBRD backs landmark bond issuance in Morocco

• EBRD investing MAD 400 million in bond issuance by Casablanca-Settat region
• Investment will trigger region’s inclusion in Bank’s Green Cities initiative
• Landmark transaction expected to catalyse Morocco’s municipal bond market

The European Bank for Reconstruction and Development (EBRD) is supporting Morocco’s capital markets by investing MAD 400 million (€36.8 million) in a landmark bond issuance by the Casablanca-Settat region – the first time that a bond has been issued by one of the country’s regional authorities.

The MAD 1 billion (€92.0 million) bond, which is being issued domestically in local currency, will help the region to implement strategic investments under its 2022-2027 Regional Development Plan. The Bank’s investment will support the Casablanca-Settat region’s efforts to diversify funding sources by tapping the debt capital market.

This subscription will also serve as a trigger investment allowing the Casablanca-Settat region to join EBRD Green Cities – the Bank’s flagship urban development programme helping cities to address their most pressing climate and environmental challenges. As part of this engagement, the region will develop a Green City Action Plan (GCAP) and a pilot mobility planning initiative aimed at fostering greener, smarter and more inclusive transport solutions.

The Bank’s investment will be complemented by a €2 million technical cooperation package, which will include funding from the Netherlands under the High-Impact Partnership on Climate Action (HIPCA)* for the development of the regional GCAP. The package will also include support for the drafting of a plan to improve the region’s financial and operational performance, which will encompass a digital transformation framework and an enterprise resource planning implementation roadmap.

The EBRD’s Head of Morocco, Haytham Eissa, said: “This inaugural bond issuance by the Casablanca-Settat region represents an important step forward for Morocco’s local capital markets and the diversification of funding sources for its regions. By investing in this transaction and supporting the region’s participation in EBRD Green Cities, we are helping to mobilise sustainable finance for urban development while strengthening investors’ confidence in municipal and regional issuers.”

The President of the Casablanca-Settat region, Abdellatif Maâzouz, said: “This bond issuance represents an innovative source of financing, aligned with the strategic orientations of His Majesty King Mohammed VI as set out in his message to participants at the Tangier Conference on Advanced Regionalization. It also underscores the strong confidence of the market and investors in the Casablanca-Settat region’s commitment to advancing sustainable and inclusive development, in close partnership with its local and international stakeholders. The issuance follows a comprehensive restructuring of the region’s existing debt portfolio, further strengthening its financial credibility and enhancing its capacity to mobilise resources in support of long-term territorial development.”

This is only the second municipal bond issuance ever carried out in Morocco and the first by a regional authority. The issuance represents an important development for the country’s local capital markets. By participating in the issuance, the EBRD is helping to ensure successful placement and laying the foundations for a deeper and more resilient municipal bond market.

The Casablanca-Settat region is one of Morocco’s most dynamic economic hubs, accounting for over 31 per cent of national GDP and a large share of the country’s industrial activity, exports and investment. Its regional development plan places climate resilience, sustainable mobility, digitalisation and territorial inclusion at the heart of its priorities.

The EBRD has been investing in Morocco since 2012. To date, the Bank has committed more than €6 billion in the country, supporting the private sector, the green transition and sustainable infrastructure.

*Active donors to HIPCA include Austria, Canada, Finland, Germany, the Netherlands, Norway, South Korea, Spain, Switzerland, the TaiwanICDF, the United Kingdom and the United States of America.