Morocco buys World Bank susdev bonds

IFR 2505 - 14 Oct 2023 - 20 Oct 2023
Quick read
Julian Lewis

Bank Al-Maghrib, Morocco's central bank, has bought €200m of shorter-dated sustainable development bonds from the World Bank comprising three and five-year tranches of €100m, both via Natixis as agent bank.

Bank Al-Maghrib bought the fixed-rate bonds as part of its management of foreign currency reserves. The central bank last reported US$31.8bn-equivalent of reserves in August, according to CEIC Data – rather more than its North African peers Egypt (US$24.7bn) and Tunisia (US$8.6bn), but less than neighbouring Algeria (US$64.1bn).

Figures for another peer, Libya, vary but appear to exceed Algeria’s.

Coupons on the bonds, which were issued under the World Bank’s sustainable development bond framework from March 2021, were not disclosed.

The private placement coincided with Morocco becoming the first African host of the annual International Monetary Fund/World Bank meetings for 50 years in Marrakesh.

In a statement, the World Bank and Bank Al-Maghrib termed the deal an opportunity “to raise awareness for the urgency of mainstreaming climate action in the region and across the continent”.

The World Bank said it would use proceeds on its sustainable development activities, citing its “accelerating investments to increase the resilience of drinking water supply and irrigation” in North Africa, where climate change is increasing water scarcity. It said that these would serve as a model for other water-constrained countries.