As a regional sustainable finance pioneer, Bank of Africa has been integrating sustainability for more than 15 years, and more recently tackling climate-related impacts, opportunities, and risks.
Bank of Africa (BOA) is present in 32 countries, including 20 on the African continent, and more than 15 thousand employees representing across our Group, so the impact potential of our Group is immense. In Morocco, the banking sector is very active on climate action thanks to front-runners like BANK OF AFRICA, in close collaboration with the Moroccan Central Bank.
Climate action is instilled across our strategy. First, Bank of Africa signed energy and resource optimisation financing facilities with various DFIs that are the best in class and the most active in Africa, such as the European Investment Bank, the EBRD, the French AFD, the German KFW, and we have fully disbursed these facilities, accompanying our customers towards better impact.
The impact is there because of Blended Finance, going beyond money to offer clients technical assistance, grants or subsidies.
Second, as a founding signatory the Principles for Responsible Banking we have been piloting impact-based methodologies and tools in partnership with UNEP FI. Since 2019 we embarked upon a process through which we progressively screen our loan portfolio for its climate but also SDG impacts. We are integrating the Positive Impact Finance approach and progressively building climate-related targets and objectives. As an example, half of our customer base is covered by this impact analysis: 1/3 of our investment loan book has positive impacts linked to SDGs. This is in addition to performing environmental and social due diligence across our investment portfolio as well as being an Equator Principles bank since 2010.
From your perspective what type of sustainable financial instruments have most impact on the African continent ?
BOA has been financing various climate-related projects, and is the first Moroccan bank in the region to commit to the MorSEFF program – Morocco Sustainable Energy Financing Facility — in partnership with EBRD, AFD, EIB and KfW. Later on we signed on to the EBRD’s GEFF – Green Economy Financing Facility, Green Value Chain (GVC) and beyond… These facilities are indeed financially successful, amounting to over $100 million of financing to SME and corporates — but the greatest success of which we are proud is to have supported companies in their energy, green and sustainable transition through a «Blended Finance» offer or mix of public and private funds.
I believe that Blended Finance products are shaping a new financial transformation … I am not a proselyte but I do believe that a new form of finance of the 21st century will emerge by blending existing instruments, and de-risking instruments for emerging, mature and frontier markets. We need to package all these components to attract international investors and make these products available to them if we want to attract capital to Africa. We are strongly committed to these issues.
The MorSEFF-type of programs have enabled bankers to understand and speak the language of energy and resource efficiency, and their various impacts on business. Our sales team has integrated this dimension so much so that one of the first questions asked when reviewing an investment project is to ask the client if the equipment provided for in its business plan integrates means to reduce the energy bill… Green technology is now also integrated into risk assessment and this demonstrates the quality and sustainable vision of the Bank’s Management. This is how banks can become a One-Stop-Shop to mainstream energy and resource efficiency.
Beyond financing, Bank of Africa is very proud to contribute to a pilot for Africa, the Morocco Air Conditioner (AC) Buyers’ Club, for so-called super-efficient air conditioners in partnership with the National Agency for Energy Efficiency — AMEE, Institute for Governance & Sustainable Development (IGSD), the Natural Resources Defense Council (NRDC) and other partners. Together, the founding members of the Morocco AC Buyers Club have a high ambition to replace older room ACs in Morocco that were inefficient when purchased, and use obsolete refrigerants that are being phased out or phased down under the Montreal Protocol on Substances that Deplete the Ozone Layers. The strategy is to aggregate demand to make the next generation cooling technology more affordable to Moroccan customers and safer for the climate, while creating new jobs and community prosperity.
What is your vision to better implement Africa’s Sustainable Development Goals, including SDG 7 related to sustainable energy ?
On the eve of the COP 27 in Sharm El Sheikh, and having recently returned from New York where I attended the meeting of the 11 founding members of the African Business Leaders Coalition (ABLC) initiated by the United Nations Global Compact, Bank of
Africa is even more committed to advancing sustainable growth, prosperity and development in Africa by bringing impact to its most pressing issues. We look forward to signing the much-awaited Climate Statement of the ABLC.
I have a dream that Africa can truly capitalize on its natural resources towards this new paradigm of economics, sustainable energy technology, transformational investments… the dream is having all these countries embarked in actions of implementing SDGs at a continental scale through a new way of capitalizing and blending resources. A collective work of the private, public and NGO sectors will lead us to fulfill this dream.
This is why I often say and believe that the financial sector, alongside the NGOs and beyond, should structure products and services which look like what international investors are looking for, by simplifying maturities, banking services, instruments and equity, combined with technical assistance and grants/subsidies, Africa will better able to attract international investors.
Investors will be looking at these products and services without which they would not have been interested otherwise in Africa – this will bring them to Africa because they will recognize the same kind of products and services they are used to. This is the dream I have for Africa.
My call to my peers in Africa is to consider that what is happening now in the globe a start of a new Century. The 20th century most likely started with the end of World War I. This century has started with the pandemic and what is happening now on the international scene. In this context of crisis, food security, conflicts, and climate change, we are joining this collective intelligence to find solutions not only for Africa but also for the different parts of the world based on the same convictions and human solidarity.
Mr. Brahim Benjelloun-Touimi
Director and Delegate General Manager Bank of Africa – BMCE Group
