Morocco's BMCE Bank looks to build on China ties to deliver $11bn tech city

RABAT: BMCE Bank is looking to build on its ties with China to help finance and develop a new industrial city in the north of Morocco, its president and chief executive told Reuters.

BMCE, one of the north African country's largest banks, is working with local authorities in a company charged with delivering the 2,000-hectare-plus new city over ten years.

The city, to be called Tanger Tech Mohammed VI, aims to support 100,000 jobs and house 300,000 people, and the first development phase has already been achieved with industrial investors expected to receive the first plots later this year, BMCE Bank President and CEO Othman Benjelloun said via email.

In April, the project company signed a memorandum of understanding with state-owned China Communications Construction Co (CCCC) and its subsidiary, China Road and Bridge Corp (CRBC), to develop the city.

In terms of funding, BMCE aims to capitalise on its network of partners in China, Benjelloun said, citing agreements that have been signed with China Development Bank and its subsidiary China Africa Development Fund.

"Chinese public funding will be mobilised as part of the One Belt, One Road initiative," he said, referring to Beijing's huge infrastructure project aimed a promoting trade.

Multilateral and Moroccan banks are also expected to contribute to the project, Benjelloun added.

BMCE is the first bank in Morocco to open in China, where it has been operating a corporate and trade finance branch in Shanghai since early 2019.

"We consider Shanghai as an entry point of our Asian strategy," Benjelloun said, expressing optimism about prospects for expanding to other Asian markets.

"We will examine our priorities with our investors and partners keeping in mind that reinforcing relations between Asian countries and the African continent remains our ultimate goal," he said.

BMCE last month raised $200 million through a capital injection by British development finance agency CDC Group and 1.9 billion dirhams ($199 million) by issuing new shares in a rights issue on the Casablanca stock exchange.

"The reinforcement of our financial foundation will also be achieved through perpetual subordinate debt and a capital increase reserved for employees," Benjelloun said.

BMCE reported a 10% fall in 2018 net profit attributable to shareholders to 1.83 billion dirhams due to a drop in business at its African branches and the rising cost of risk.

African branches accounted for 46% of profits, while Morocco and Europe represented 48% and 6%, respectively.