€20 million loan to BMCE Bank for energy efficiency

By Nibal Zgheib

€20 million loan to BMCE Bank

The European Bank for Reconstruction and Development (EBRD), the Agence Française de Développement (AFD), the European Investment Bank (EIB) and Kreditanstalt für Wiederaufbau (KfW) are teaming up to strengthen sustainable energy measures in Morocco, with the support of the European Union Neighbourhood Investment Facility (EU NIF).
 
The four financial institutions are providing a €20 million financing facility to BMCE Bank and its leasing subsidiary Maghrebail.
 
The finance line is the first under the Morocco Sustainable Energy Financing Facility (MorSEFF), a comprehensive programme for sustainable energy investments through financial institutions.
 
The proceeds of this EBRD-led facility are dedicated to financing energy efficiency and small-scale renewable energy investments. BMCE Bank will on-lend to small and medium-sized enterprises and corporates in the commercial and industrial sectors, including commercial construction and energy service companies.
 
BMCE Bank will also raise awareness among its clients, promoting energy-efficient and renewable energy technologies and strengthening local production.
 
In addition, comprehensive technical assistance and investment incentives, funded by the EU NIF and by the EBRD Southern and Eastern Mediterranean (SEMED) Multi-Donor Fund, will provide support to BMCE Bank in the design of business development tools and the successful implementation of the facility. It will also allow clients of BMCE Bank to receive support in project implementation, as well as investment incentives, encouraging them to make sustainable energy investments.
 
HE Rupert Joy, the EU Ambassador to Morocco, said: “The EU is delighted to support the MorSEFF programme through its Neighborhood Investment Facility. MorSEFF is part of the regional Southern and Eastern Mediterranean “SEMed SEFF” program developed by the EBRD in collaboration with AFD, EIB and KfW. The EU has allocated in excess of €47 million for technical assistance and investment incentives to SEMed SEFF, of which €14 million for Morocco alone. This commitment, together with the joint action of four leading European Development Finance Institutions, underlines the importance of Morocco and of promoting sustainable energy for the EU.”
 
Sylvia Gansser-Potts, EBRD Director for Financial Institutions, said: “This facility is part of the EBRD’s wider effort to help its recipient countries reduce their energy intensity. We are very happy to team up with BMCE Bank to tackle this issue, promoting better practices and raising awareness about the advantages of sustainable energy investments. MorSEFF benefits from the expertise the EBRD has accumulated through investing €16.5 billion in sustainable energy of which €2.6 billion using financial intermediaries in 20 countries.”
 
Othman Benjelloun, Chairman of BMCE Bank group, commented: “BMCE is honoured to be the first financial institution in Morocco and in the region to seal this innovative partnership. It is a further illustration of BMCE Bank Group’s leadership in innovation and its commitment to responsible economic development. It is also a logical step forward for an institution which, since its privatisation in 1995, has proactively engaged in promoting Sustainable Finance at an institutional level. We hope that others will join us in making sustainable finance an additional tool for growth and jobs within financial institutions and more widely, in Morocco and Africa.”
 
Marie-Pierre Nicollet, AFD Director of the Mediterranean and Middle East Department: “With more than €15 billion committed to projects with positive impacts on climate since 2005, AFD is a major stakeholder in international climate finance. In particular, AFD commitment since 2006 through its “Sustainable Use of Natural Resources and Environmental  Facilities”, reached nearly €2 billion with about 40 partner banks, especially in the Mediterranean Region. We are thus very pleased to further support such initiatives and to take part to this new cooperation in Morocco with BMCE and our European partners.”
 
Heinz Olbers, EIB Director of Lending Operations in Neighbouring Countries, observed: “Climate action is a priority for the EIB, which provided €19.1 billion in 2014, mainly by funding energy efficiency projects. The development of renewable energy is at the heart of our activities in Morocco, in a sector to which we devoted nearly the third of our funding in 2014. And we will continue this mobilisation in 2015, supporting sustainable development which creates employment opportunities for young people.”
 
Wolfgang Reuß, Director, KFW, said: “Promoting investment in sustainable energy to preserve our planet is a major challenge but is also a great opportunity for Morocco. KfW funds €2 billion of green energy investments every year. In Morocco the portfolio amounts to more than €1 billion. Through MorSEFF, we are proud to participate for the first time in green financing in the Moroccan banking sector, as well as in the wider region of North Africa and the Middle East.”
 
Morocco is a founding member of the EBRD and to date the Bank has invested €380 million in 17 projects in the country, in addition to €130 million of trade-facilitation credit lines with local banks. The EBRD has also provided technical assistance support to more than 135 small and medium-sized local enterprises.