Provision of a corporate loan of up to EUR 300 million denominated in MAD or EUR to the electricity branch of the Moroccan state-owned utility company, Office National de l'Electricite et de l'Eau Potable (ONEE, the "Company" or the "Borrower"). The loan proceeds will be used to provide liquidity to ONEE in order to improve the Company's financial resilience. The transaction will be structured as a Sustainability-Linked Loan (SLL) which will be the first one in the country.
The loan will achieve the following objectives: (i) strengthen the financial position of ONEE as it will help restructure its balance sheet by providing long term finance and (ii) reduce ONEE's carbon footprint through the achievement of the Sustainability Performance Targets (SPTs) as set in the Sustainability Framework
EBRD loan proceeds are to be ring-fenced from the Company's fossil fuel assets.
This will be the first SLL in the country with an expected strong demonstration impact on other utilities with fossil-fuel exposure in the region as well as towards other financial institutions who could replicate similar financing structures.
ETI score: 75
Transition impact will be derived from Resilient and Green qualities.
Resilient: The project will increase the resilience of the energy sector to systemic shocks and the ongoing electricity market crises.
Green: ONEE will commit to SPTs including a reduction in CO2 emissions and increased share of renewable energy.
OFFICE NATIONAL DE L ELECTRICITE ET DE L EAU POTABLE
ONEE was created in 2012 as a result of a merger between Office National de l'Electricite, the state-owned national electricity utility, and the Office National de l'Eau Potable, the state-owned national water utility. ONEE is responsible for providing both electricity and water to its customers, as well as managing the collection of sewage and rainwater, water sanitation and public lighting in certain areas. ONEE owns and runs electricity transmission, multiple domestic electricity generation assets, and more than 50% of domestic electricity distribution.
EBRD Finance Summary
Total Project Cost
The Bank's additionality stems from:
- Offering financing at terms and conditions which are not available from commercial sources;
- Financing the first SLL in the country with an expected strong demonstration impact to other fossil-fuel dependent utilities in the southern and eastern Mediterranean (SEMED) region, as well as towards local commercial banks who might want to replicate a similar structure in the future; and
- Supporting ONEE to reduce its carbon footprint and achieve sustainability targets.
Environmental and Social Summary
Categorised B (2019 Environmental and Social Policy). The electricity subsidiary of ONEE is an existing client of the Bank since 2012, and has been advancing satisfactorily in bringing its policies and procedures in line with best international standards. Environmental and Social Due Diligence (ESDD) will include a review of: ONEE's E&S performance and management procedures (contractor management, Occupational Health and Safety, labour management, and EHSS management systems etc.); their compliance with the previously-agreed ESAP; and the resources and readiness to manage the E&S risks associated with the objectives set forth by the SLL and in achieving the NDCs. EBRD loan proceeds are to be ring-fenced away from fossil fuel assets and operations.
ONEE will be required to develop a credible and ambitious corporate decarbonisation plan, which will include a set of relevant and ambitious SPTs and KPIs with specific timeframes. A reporting framework will need to be agreed for the KPIs as part of the Company's overall sustainability reporting in line with best practice.
As a result of the ESDD, actions identified to align the project with EBRD's PRs and Paris Alignment objectives will be included, by EBRD, in an ESAP to be agreed with the Company.
Technical Cooperation and Grant Financing
Technical assistance will be provided for the purposes of:
- Supporting ONEE to develop the Sustainability Framework;
- Assisting ONEE in establishing its digital roadmap strategy and implanting digital use cases;
- Developing a decarbonisation strategy for ONEE;
- Assisting ONEE in introducing climate governance principles;
- Assisting the Moroccan national energy regulator (ANRE) in supervising and opining on the account unbundling of ONEE.
Company Contact Information
Mohammed ZAHIDI, ONEE; Electricity branch
65, Rue Othmane Bnou Affane Casablanca MAROC
PSD last updated
21 Nov 2023
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