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Green banking markets in Africa discussed in Morocco

By Anthony Williams

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EBRD/BMCE Bank of Africa climate finance conference in Casablanca

The creation of green banking markets in Africa took centre stage at a conference in Casablanca, Morocco, today, less than a month before Morocco holds a major climate meeting to usher in a new era in the global battle against climate change.

The European Bank for Reconstruction and Development (EBRD) teamed up with Banque Marocaine du Commerce Extérieur, BMCE Bank of Africa, to hold a one-day conference in the Moroccan city of Casablanca on how to engage the financial sector with the climate challenge in Africa.

Entitled “Creating Green Banking Markets in Africa”, the EBRD/BMCE Bank of Africaconference was an important example of the steps being taken to implement the 2015 Paris Agreement, a global climate accord that will come into effect in the coming weeks.

The Casablanca conference dealt specifically with the practical steps that need to be taken to turn the Paris vision into reality, a theme that will be taken further at the COP 22 climate talks in Marrakesh in November, the follow-up to the COP 21 in Paris last year.

Senior representatives from the EBRD and BMCE Bank of Africa welcomed guests from across Africa to the green banking markets conference. Although the EBRD only invests in three African countries – Egypt, Morocco and Tunisia – other nations from across the continent are interested in applying the EBRD’s financing model.

In his opening remarks to the conference, the EBRD’s Energy Efficiency and Climate Change Managing Director Josue Tanaka said: “There is an urgent need for strong action ‎now to achieve global climate goals.” He stressed “the EBRD’s strong conviction that commercial banks will play an ever more important role in the scaling up of green financing and in achieving significant environmental benefits based on their broad distribution capacity.”

Othman Benjelloun, Chairman BMCE Bank group of Africa, commented: “In parallel with the great commercial success of the first €20 million financing facility dedicated to sustainable energy, MorSEFF has enabled Group BMCE-Bank of Africa to familiarise itself more closely with the renewable energy market, to improve its awareness and to support the development of resources devoted to the promotion of sustainable development, energy efficiency and renewable energy. It is therefore with enthusiasm and commitment that, within the context of the next COP 22, we are renewing our partnership with the EBRD, the AFD and the EIB for a new MorSEFF programme designed to support businesses in their environmental approach and position ourselves as a benchmark bank in the field.”

The two organisations used the conference to celebrate the success stories of BMCE Bank of Africa clients who had invested in renewable or energy efficiency projects using a joint EBRD/BMCE Bank of Africa financing facility.

At an awards ceremony on Wednesday evening at the BMCE Bank of Africa headquarters, prizes were due to be handed out to corporate pioneers in the sustainable use of energy and to individuals who had helped deliver renewable energy and energy efficiency projects.

The conference included sessions on the regulatory framework for innovative financial products in the green arena, and the role of commercial banks in promoting green economy transition and cooperation with development banks.

There was also a focus on integrating green finance into banks’ business operations. This sort of integration lies at the very heart of the EBRD’s Sustainable Energy Financing Facility (SEFF) product, which has now been successfully introduced in some 24 countries.

With SEFFs, the EBRD makes loans to partner banks in its countries of operations which then on-lend funds to clients investing in efficient and renewable energy programmes. It is a crucial element in the drive by all development banks including the EBRD to attract significant sums of private capital to the global climate challenge.

During the conference the EBRD and BMCE Bank of Africa signed their latest agreement under the MorSEFF facility, a SEFF specifically tailored to the Moroccan market.

This represented €35 million funding provided by the EBRD, together with Agence Française de Développement (AFD) and the European Investment Bank (EIB), with the support of the European Union Neighbourhood Investment Facility (EU NIF).

This comes after a string of large-scale green investments made by the EBRD in Morocco in the past 12 months, including a €126 million joint BMCE Bank of Africa-EBRD investment in the 120 MW Khalladi wind farm near Tangiers and a €24 million loan to Morocco-based bio-fertiliser group Elephant Vert.

These projects are part of the EBRD’s Green Economy Transition strategy, adopted in the lead-up to COP 21 in Paris, which aims to increase annual financing for green projects to 40 per cent of its annual investments by 2020 (versus an average of 24 per cent in the 10 years to 2016).

The EBRD invests to promote the development of the private sector in 36 countries spanning three continents – from Mongolia in Central Asia to Morocco on the shores of the Atlantic Ocean, from Estonia on the Baltic to Egypt on the Mediterranean.

It places a special emphasis on investing in the sustainable use of energy and resources. Since 2006 the EBRD has invested over €20 billion in some 1,160 green energy projects worth a total of more than €112 billion. This includes over €1 billion in 44 green projects in the southern and eastern Mediterranean region worth €6.5 billion, saving an estimated 1.7 million tonnes of oil per year (5,700 kt CO2 per year).

The EBRD will play an active role in the COP 22 conference and will lead activities that focus on capacity building in relation to the Nationally Determined Contributions (NDCs), energy efficiency, carbon market policies, adaptation and technology transfer.

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