New sustainability-linked loan to ONEE targets net zero goals and digital infrastructure improvements. ESG BROADCAST shares key takeaways.
The European Bank for Reconstruction and Development (EBRD) has approved a landmark €300 million sustainability-linked loan (SLL) to Morocco’s state-owned utility, the Office National de l’Electricité et de l’Eau Potable (ONEE). Announced on 20 June 2025, the transaction marks the first SLL in the MENA and African energy sectors, representing a critical advancement in linking green finance with climate-aligned utility reform.
ONEE, responsible for the generation, transmission, and integration of renewable energy in Morocco, will use the loan to enhance its financial resilience while undertaking structural climate mitigation reforms. The funding supports Morocco’s broader commitment to achieving 52% of installed capacity from renewable energy sources by 2030—a national target aligned with its updated Nationally Determined Contribution (NDC).
The SLL includes two measurable Sustainable Performance Targets (SPTs): reducing the carbon intensity of Morocco’s electricity mix and increasing the share of renewables in power generation. These targets have been independently assessed as “ambitious” by a second-party opinion provider, confirming the alignment of the loan structure with the internationally recognized Sustainability-Linked Loan Principles.
In a significant step, ONEE has also pledged to retire select carbon-intensive thermal assets and prepare a comprehensive decarbonization strategy. The reforms will be supported by the development of a digital roadmap to guide ONEE’s transition, including advanced planning for grid modernization and integration of renewables.
In parallel, the EBRD will assist ONEE in enhancing its climate governance, institutionalizing climate risk disclosure practices, and expanding core digital capabilities. These measures will directly support the country’s transition toward a net-zero economy by 2050, as pledged at COP28.
The loan will also address critical infrastructure needs by enabling improved network planning and dispatch optimization based on real-time carbon intensity metrics. These interventions are essential to meet Morocco’s rising energy demand while reducing emissions and maintaining affordability.
Morocco, a founding member of the EBRD and a beneficiary of its resources since 2012, has received over €5.4 billion through 119 EBRD-financed projects. This latest agreement reinforces the country’s leadership in sustainable energy finance and climate-aligned infrastructure development.
Strategic significance lies in Morocco’s ability to showcase how sustainability-linked finance can drive large-scale, sector-wide climate transformation. For ESG stakeholders, the loan sets a precedent in combining operational decarbonization with financial performance criteria, reinforcing global interest in green finance frameworks and responsible business strategies across emerging markets.
ESG BROADCAST will continue monitoring the updates related to this topic. Stay tuned to be updated on the related policy and pivotal regulatory shift.
