Provision of an investment of up to MAD 200m (EUR 19.2m) in favour of Office National des Chemins de Fer ("ONCF"), Morocco's national integrated railway company. The investment will entail the subscription to a local currency senior secured green bond for up to MAD 1 billion (EUR 95 million equivalent) through public placement. The bond will be aligned with the Low Carbon Land Transport Criteria of the Climate Bonds Standard as verified by a Second Party Opinion ("SPO") and certified by the Climate Bonds Standard Board.
The Bond proceeds will be used to refinance debt used to finance the electrified high-speed rail line linking Tangiers to Casablanca ("Al Boraq"). The investment will result in overall capital market development through supporting the first green bond in Morocco in the infrastructure sector. The development of an Environmental and Social Action Plan (ESAP) will require the client to comply with certain standards after subscription.
ETI score: 66
Transition impact of the project arises from the Resilient and Green transition qualities:
(i) Resilient - The proposed investment contributes to overall capital market development through supporting the first green bond in Morocco in the infrastructure sector, which will be in line with Low Carbon Land Transport Criteria of the Climate Bonds Standard and received a SPO and will have an important demonstration effect as it will incentivise issuers to broaden the type of capital market products that they deploy; and
Green - The proceeds of the Bond will refinance debt used for the construction of the Al Boraq high-speed electrified passenger rail line and is 100% GET.
OFFICE NATIONAL DES CHEMINS DE FER
ONCF, Morocco's national railway integrated company, is a fully state-owned entity organised as a public establishment with industrial and commercial nature, active in three transport market segments: (i) phosphate rock transport carried out for the State-owned OCP Group, (ii) general freight transport and (iii) intercity passenger transport. The company is responsible for building and maintaining the rail infrastructure and operating train services. ONCF is the network owner and operator for the Moroccan railway sector.
ONCF was created in 1963 to manage the existing network and railway services formerly operated by three private foreign-owned concession companies. ONCF operates under the authority of the Ministry of Transport and Logistics ("MTL"). The ONCF is administered by a Board of Directors chaired by the Minister, and managed by the General Manager appointed by Dahir (Royal Decree).
EBRD Finance Summary
Subscription to a local currency domestic senior guaranteed green bond in Morocco for an amount of up to MAD 200 million (EUR 19.2m equivalent), representing up to 20% of the overall issuance.
Total Project Cost
The Bank's additionality is mainly driven from 1) Providing funding which better matches asset life with funding structure. 2) Closing the funding gap and supporting carrying out a successful book-building process. 3) EBRD's involvement will help to trigger enhanced practices at the level of the bond market through green bond issuance in line with Low Carbon Land Transport Criteria of the Climate Bonds Standard. 4) Developing an ESAP, which will require the client to comply with certain standards after subscription.
Environmental and Social Summary
Categorised B (2019 ESP). The Project is a capital markets transaction (Green Bond). The use of proceeds is focused exclusively on refinancing of the previous investments into Al Boraq high-speed train and will explicitly exclude any new high-risk or category A projects. The ONCF Green Bond Framework is in line with the requirements of the Low Carbon Land Transport Criteria of the Climate Bonds Standard (CBS), as verified independently by a SPO. The Project supports Paris Agreement goals for mitigation based on meeting the CBS criteria. An Environmental and Social Action Plan (ESAP) has been developed and includes requirements relating principally to corporate-level management systems given the non-project nature of the Bank's financing. After subscription, the Bank will require the Company to comply with the PRs, and the EBRD proceeds will not be used for any new high-risk or Category A projects in line with EBRD's E&S Policy 2019. The Bank will monitor the Company's performance through reviewing annual reports prepared by the Company and published on its website.
PSD last updated
01 Aug 2022
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