Morocco has once again managed to lead Maghreb countries in preparing financial systems to support climate action, according to the “Climate Finance Readiness Index” report covering the Middle East, North Africa and Turkey (MENAT) region.
Published recently by the Toronto and Casablanca-based consulting firm Green For South, the report highlights that the Kingdom, in its sub-region which also includes Algeria and Tunisia, is the first to have adopted “appropriate regulations and guidelines (mostly voluntary at this stage), an interesting volume of climate finance activity (dealing with international funds and issuing green bonds) and effective awareness raising schemes.”
The report also highlighted Morocco’s efforts to improve its climate resilience, particularly in terms of mitigation, which requires significant investment, recalling in this regard the total cost of climate mitigation and adaptation actions included in the NDC (Nationally Determined Contribution) as published in June 2022 and estimated at USD 78 billion (USD 38 for mitigation measures and USD 40 billion for warning measures).
Tunisia also has appropriate regulation (on a voluntary basis), an interesting volume of climate finance activity, the report adds, noting that there has been no issuance of green bonds or “Sukuk” and awareness provisions are still limited.
On the other hand, Algeria “has no regulation in the financial sector to support climate action and climate finance activity is still limited,” Green For South said, estimating that overall, the North African region is at an early stage of implementation of these actions.
For this firm specializing in sustainable finance, green and climate, Morocco and Tunisia are called to further strengthen their regulations (and make it mandatory) and encourage green emissions and launch more awareness initiatives and training.
Regarding the MENA region, Egypt is leading the way in making all ESG and climate risk regulations mandatory in the different financial sectors (banking, insurance, and capital markets) unlike countries like Jordan, Morocco, Tunisia, and Turkey that generally have voluntary reporting requirements.
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