BMCI Forum: the issues and challenges of sustainable financing in Morocco

BMCI Forum: the issues and challenges of sustainable financing in Morocco

The BMCI organized, this Wednesday, June 15 at the Sofitel in Rabat, the first edition of the “Sustainable Finance Forum”. The objective was in particular to highlight ESG (environmental, social and governance) financing, its importance and Morocco’s expectations in relation to it.

During the event, finance was represented by BMCI and its parent company BNP Paribas, as well as by the European Bank for Reconstruction and Development (EBRD).

Due to the current climate emergency, production and industrialization methods must become more responsible and sustainable. The world of finance is also turning to green financing by directing its investments towards structures that are more respectful of the environment and better able to meet new standards, which are increasingly restrictive for manufacturers. Among them, the European Union’s decision to ban the sale of new thermal engine vehicles from 2035.

A need to support low-carbon industry

Based on this observation, the financing players present have developed business support programs to finance projects with an environmental impact. In their internal policies, financial groups are gradually disengaging from financing granted to the oil and gas sectors.

“We have already made a commitment, jointly with the EBRD, through a funding envelope of 25 million euros for a multi-annual program that we signed a few months ago. This will allow us to distribute a number of loans to companies that want to upgrade their production system to less energy-intensive models “, explains Philippe Dumel, Chairman of the Management Board of BMCI, in a discussion aside from the event.

Morocco will soon be faced with various regulatory constraints related to the decarbonization of industry. These include the entry into force, in 2023, of the carbon tax in the European Union. A challenge to decarbonization which the country is preparing to be able to ensure the export of its goods to the Old Continent, which represents 65% of Moroccan exports. If Moroccan exporters do not comply with these standards, they may well see their goods taxed at the borders.

One of the other bodies supporting financing in Morocco, present at the event, is the EBRD. In 2021, 51% of its investments were in green financing. Since its installation in the Kingdom, the institution has released the equivalent of nearly 4.3 billion dirhams in green financing lines.

The country has good solar potential, but also wind power. This energy has become very competitive for some foreign investors. Nevertheless, Morocco must meet various challenges to scale up.

The difficulty of access to renewable energy for all

One of the most important projects to boost sustainable finance and allow it to feed the industry is indeed a certain transition to scale. Regulatory issues are emerging.

Met on the sidelines of the event, Saïd Mouline, Director General of the Moroccan Agency for Energy Efficiency (AMEE), explains to us that “the major renewable projects involving very high voltage (the major energy consumers, editor’s note), that is to say the mines, the steel industry, the ONCF and the cement manufacturers, have a model where they can buy cheaper green energy while decarbonizing their industrial process. “And to add:” They are therefore winners at all levels. We are trying to change the current framework. There is now a debate on the new law so that it is open to medium voltage, that is to say to the majority of companies. We are talking about tens of thousands of them. »

This opening will be done in stages. Because if access to this resource can be beneficial from an ecological point of view, the business model should be profitable for all. “You have to find the best model; where everyone can meet. Texts have also been submitted to Parliament. Regarding the amounts that will be required, it is important that we remain within an economic model for everyone. We are optimistic that we will quickly be able to take the leap,” says Saïd Mouline.

This would indeed be an opportunity for Moroccan companies to be more competitive by reducing their energy bills, and would also allow Morocco to reduce its energy dependence and its trade balance.

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