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, although it is unclear whether the deal involved an agent bank or was a bilateral transaction.
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 undisclosed.
The deal coincided with Morocco becoming the first African host of the annual International Monetary Fund/World Bank meetings for 50 years. The meetings take place in Marrakech until October 15.
In a statement, the World Bank and Bank Al-Maghrib termed the placement 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.