Morocco—Greening the Mohammed VI Fund for Investment–Innovation and Investment Fund (I2F)

Client: Foreign, Commonwealth & Development Office

Duration: 2021-2022

Region: Middle East and North Africa

Country: Morocco

Solutions: Environment Climate

The Mohammed VI Fund for Investment (M6FI), established in 2020 with an initial £1.2 billion budget allocation, spearheads Morocco’s COVID-19 recovery efforts. The Fund’s core mandate is to provide local businesses and strategic infrastructure projects with long-term financing, in the form of equity or quasi-equity, to i) support the growth of high-potential small and medium-sized enterprises (SMEs); ii) promote the financing of commercially sustainable infrastructure, and iii) develop strategic sectors which can help the national economy recover in a post-crisis context.

M6FI has the mandate to leverage capital totaling £3.6 billion from development and commercial investors through investment vehicles or sub-funds in line with thematic priorities: infrastructure, industrial reorganization, SMEs, agriculture, tourism, innovation/growth.

DAI worked with the Ministry of Economy and Finance (MEF) to support the design and structuring of M6FI, embedding the environmental, social, and governance (ESG) criteria required to ensure alignment with the Paris Agreement and international standards adhered to by development finance institutions and commercial investors.

The program also recommended additional pro-climate and ESG criteria to support the Fund’s aim to mobilize international climate finance to specific sub-sectors. It made suggestions to reflect and embed these recommendations to help M6FI incorporate ESG into the investment decision-making process at a fund and sub-fund level and equipped the Fund with the necessary screening tools to support Paris-compliant projects.

Modern French built tram in the centre of Rabat. The Rabat-Sale tramway system consists of 2 lines.jpeg

Sample Activities

  • Provide local businesses and strategic infrastructure projects with long-term financing, in the form of equity.
  • Support the design and structure of M6FI, embedding environmental, social, and governance criteria.

Select Results

  • Developed M6FI’s ESG Policy Document, to be adopted as a testament to its commitment to applying internationally accepted ESG standards used by other developmental financial institutions.
  • Developed an ESG Baseline providing an overview of M6FI’s outlook on ESG guidelines and principles to pave the way for developing the Fund’s ESG policy.
  • Drafted M6FI’s Climate Finance Strategy, which reflects how ESG criteria will be embedded into the Fund’s investment process, also expanding on how climate risk will be integrated into investment decision-making.
  • Developed a set of tools to support the implementation of the ESG Policy, including a Climate Risk Tool, Decision Support Tool (a screening tool complemented by a Project Profile Template), and a Capacity Building Plan.
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