The European Bank for Reconstruction and Development (EBRD) and Morocco’s Office National de l’Electricité et de l’Eau potable (ONEE) have signed a €300 million loan agreement. ONEE is involved in generation, transmission and renewables. Morocco is strongly committed to the energy transition in order to achieve its objective of having 52 per cent of its installed capacity from renewables by 2030. In this context, ONEE and the country as a whole are taking important steps towards decarbonisation, while maintaining the security and affordability of energy.

The loan is structured as a sustainability-linked loan (SLL) – the first one in the MENA and Africa region’s energy sector. It provides an example of how energy utilities can link financing with support for the transition to a low-carbon economy. The proceeds will be used to improve the company’s financial resilience, helping to alleviate the impact of the energy crisis.

The SLL builds on ONEE’s increasing climate ambitions via two key performance indicators – namely, reducing the carbon intensity of electricity generated in Morocco and increasing renewable sources’ share of the country’s total electricity production. The company’s Sustainable Performance Targets (SPTs) are in compliance with Morocco’s updated Nationally Determined Contribution (NDC) commitments, and a leading independent second-party opinion provider has confirmed the SLL’s alignment with the internationally recognised Sustainability-Linked Loan Principles, rating the overall project as “ambitious”. This verification process was supported by FSD Africa.

As part of the loan, ONEE has committed to undertake retirement of some Carbone intensive thermal capacities in the medium term, building on Morocco’s enhanced climate ambition of transitioning to a net-zero economy by 2050 as announced at COP28. The EBRD will be supporting ONEE’s efforts to (i) prepare a decarbonisation strategy, (ii) improve its climate governance and expand the digitalisation of the company’s core activities by establishing a digital roadmap strategy and implementing digital use cases.