Mohammed VI Investment Fund, AfDB pool efforts to promote investment financing in Morocco

The Mohammed VI Investment Fund (FM6I) and the African Development Bank (AfDB) signed a Letter of Intent, aimed at increasing funding sources for productive investment and strengthening the role of the private sector in Moroccan economy.

This partnership, sealed on the sidelines of the Africa Investment Forum 2023, held last week in Marrakech, will allow the two institutions to identify initiatives that could be suitable for joint funding, as well as to explore other funding mechanisms, such as risk-sharing through guarantee products.

The Mohammed VI Investment Fund is a pivotal mechanism that represents Morocco’s steadfast resolve to strengthen its socio-economic foundations, AfDB President, Akinwumi Adesina, was quoted in a joint statement as saying.

“I am very happy to co-sign this Letter of Intent that demonstrates the African Development Bank’s intention to foster an alliance with FM6I and synergize efforts, expertise, and resources to greatly amplify its investment impact and to deliver transformative development results together,” Adesina added.

For his part, Director General of the Mohammed VI Fund for Investment, Mohamed Benchaâboun welcomed this new partnership with such a strong and credible institution in Africa. “The African Development Bank is not only a long-standing partner of the Kingdom of Morocco, but also a genuine player in the emancipation of our continent,” he said.

This partnership translates the Fund’s commitment to Africa as it will help boost private investment in the continent, Benchaâboun said.

The partnership, which will make the Fund a major lever for strengthening the African Development Bank’s involvement in Morocco, is the tangible expression of an ambition shared by both institutions, namely strengthening the role of the private sector in financing the Moroccan economy.

The Mohammed VI Investment Fund has launched three major initiatives to catalyze productive investment in Morocco.

In this regard, the Fund is currently finalizing the selection process for management companies responsible for managing thematic and sectoral funds, aimed at offering Moroccan companies funding solutions to enhance their capacity for investment, to create long-term jobs and to develop their activities in new geographical markets.

The second initiative is a subordinated debt product, which will supplement its equity financing offer. It will also enable Moroccan businesses to fund their investment projects while increasing their equity at the same time.

Under the third initiative, the Fund is developing innovative tools for infrastructure project preparation and to take a stake in these projects to speed up the pace of sustainable infrastructure project implementation in Morocco.

On the sidelines of the African Investment Forum, the Fund secured $500 mln from the European Investment Bank, as it plans to garner a total of $4.5 billion in favor of strategic, infrastructure and industrial projects in Morocco.

Under the agreement, the EIB will also back the Fund’s private equity and venture capital investments.

Last month, the Bank said it will offer Morocco 1 billion euros to back its reconstruction efforts.

Mohammed VI Investment Fund is one of the key pillars of the recovery plan announced by King Mohammed VI in July 2020. It has an initial capital of 15 billion dirhams ($1.6 billion) from the state budget, and aims to attract up to 30 billion dirhams in additional private capital, ultimately generating a total investment envelope of 120 to 150 billion dirhams.

Morocco is facing growing demand for infrastructure services as it seeks to boost its economic recovery and competitiveness.

The country also seeks to increase the share of the private sector in total investments from one third currently to two thirds by 2035.