Photo: Citizen59 / Wikimedia Commons, CC BY 3.0
The African Development Bank has completed its first bond issue in Moroccan dirhams, raising MAD 1 billion through a seven-year private placement aimed at expanding local-currency financing.
A new funding channel in Morocco
The African Development Bank (AfDB) said the bond was placed with qualified investors and carries a floating interest rate linked to the Moroccan Overnight Index Average, known as MONIA.
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The transaction adds the dirham to the Bank’s financing options in Morocco alongside its main international funding currencies, including the US dollar and euro. AfDB said the move should allow it to offer a broader range of lending solutions to clients whose revenues and costs are denominated in local currency.
The Bank thanked Morocco’s Ministry of Economy and Finance, Bank Al-Maghrib and the Moroccan Capital Market Authority for their role in the operation. Attijari Finances Corp acted as adviser, while Attijariwafa bank and CDG Capital served as placement institutions.
Why local-currency financing matters
Borrowing in a foreign currency can leave African governments, businesses and public agencies exposed when their domestic currency weakens. Repayments rise in local-currency terms even where the underlying project is performing as planned.
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Local-currency finance can reduce that exchange-rate mismatch, making borrowing conditions more closely aligned with the currency in which a borrower earns income. For Morocco, the issuance also brings a highly rated multilateral development institution more directly into the domestic debt market.
The AfDB has identified expanding local-currency lending as a strategic priority. Its capital-markets programme already raises funds across major global markets and has included private placements in several emerging-market currencies. The Bank’s board has authorised a 2026 borrowing programme of up to UA 8.9 billion, or about $12.1 billion, excluding hybrid capital issuances.
Potential model for other African currencies
AfDB said it is considering a dedicated dirham liquidity portfolio, potentially supported by converting part of its foreign-currency holdings. The aim is to build capacity for a continuing local-currency financing operation in Morocco rather than treat the deal as a one-off issuance.
The Bank also said it wants to work with Moroccan authorities and market participants to deepen the country’s financial market, including through hedging instruments and stronger liquidity in derivatives.
For African borrowers, the importance of the deal lies beyond its MAD 1 billion size. The structure offers a test case for how a continental lender can raise money locally and recycle it into development finance without passing currency risk on to projects and businesses.
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If the Moroccan model proves workable, the lessons could support a gradual expansion into other African currencies where market depth, investor demand and regulatory conditions permit.