Morocco’s central bank Bank Al-Maghrib (BAM) and the European Bank for Reconstruction and Development (EBRD) have concluded a multi-year programme aimed at strengthening the banking sector’s resilience to climate-related risks, officials said Wednesday.
Launched in 2022, the initiative sought to help Moroccan banks better identify, assess and manage environmental risks at a time of increasing exposure to climate shocks, particularly in agriculture- and energy-linked lending portfolios.
The programme comes as Morocco faces growing climate variability, including prolonged droughts, floods and other extreme weather events that have placed pressure on key sectors of the economy and financial system.
Bank Al-Maghrib Director General Bouazza Abderrahim said the global environment in which financial institutions operate has become increasingly uncertain, citing climate disruption, geopolitical tensions and regulatory changes as key sources of risk.
“We are currently operating in a highly unpredictable environment, marked by climate disruption, geopolitical tensions, and regulatory volatility,” Abderrahim said.
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He added that central banks and supervisory authorities have a responsibility to ensure that financial institutions adequately manage emerging risks, including those linked to climate change.
“It is our responsibility, as a central bank and supervisory authority, to ensure that banks effectively manage risks, including those arising from climate change,” he said.
The programme, supported by the Frankfurt School of Finance & Management and RINA Consulting, provided Moroccan banks with technical training and tools to improve climate risk governance, stress testing and portfolio assessment.
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Officials said participating institutions were trained to integrate climate considerations into traditional risk frameworks, including credit and operational risk management systems.
Abderrahim noted that climate risk is increasingly recognised by banks not only as a regulatory concern but also as an economic one, given its potential impact on asset quality and financial stability.
“Today, climate risk management is recognised by banks as both a prudential and economic issue,” he said, warning that a lack of methodological frameworks could expose lenders to significant losses.
In response, BAM has begun introducing regulatory measures requiring banks to gradually incorporate climate risk into governance structures and risk management practices.
The central bank said it plans to continue refining this framework in line with international best practices and lessons learned from implementation.
The initiative forms part of Morocco’s broader strategy to develop climate finance by 2030, which aims to align financial flows with national environmental and sustainability goals.
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The strategy encourages closer coordination between regulators, financial institutions and public authorities to support investment in decarbonisation and climate-resilient infrastructure.
Officials say the programme is particularly relevant given Morocco’s exposure to recurring climate shocks, including severe droughts, floods in northern regions, and the 2023 earthquake in Al Haouz, which highlighted vulnerabilities in infrastructure and economic systems.
Such events have underscored the need for financial institutions to incorporate physical climate risks into lending decisions and long-term portfolio planning.
The banking sector plays a central role in financing agriculture, energy and infrastructure projects, making it particularly sensitive to climate-related disruptions.
Analysts say Morocco’s approach reflects a broader global trend in which central banks are increasingly integrating environmental risks into financial supervision frameworks.
By concluding the programme, BAM and the EBRD aim to accelerate the sector’s preparedness for climate-related shocks while strengthening financial stability in an increasingly uncertain global environment.
