Morocco Seeks Innovative Financing to Accelerate Africa’s Railway Development

Morocco is urging African governments, development banks and private investors to rethink how railway infrastructure is financed, as rising construction costs and limited public budgets threaten to slow the expansion of transport networks across the continent.

The issue took centre stage at the second International Forum on Investment and Financing Solutions for the Future of Rail Transport in Africa, held in Rabat on October 14–15 under the high patronage of His Majesty King Mohammed VI. The gathering brought together railway operators, financial institutions, investors and development agencies to explore ways of turning ambitious infrastructure plans into projects capable of attracting long-term funding.

Morocco used the meeting to highlight its own railway expansion strategy, which includes a planned investment programme worth 134 billion dirhams by 2030, while advocating financing arrangements that reflect the economic realities and investment needs of African countries.

Public Budgets Alone Cannot Meet Africa’s Railway Needs

The forum focused on a fundamental challenge facing African transport infrastructure: railway projects require substantial upfront capital, while their economic benefits often materialize over decades.

Mohamed Rabie Khlie, director general of Morocco’s National Railways Office (ONCF), called for a shift from policy discussions to practical implementation. Building on the 2023 Dakar Declaration, he argued that the continent needs lasting partnerships and financing models capable of supporting projects throughout their life cycles.

He also highlighted the economic consequences of inadequate infrastructure. According to figures cited by Khlie, infrastructure deficiencies reduce Africa’s annual economic growth by approximately two percentage points and can cut productivity by as much as 40%.

These constraints are becoming more pressing as population growth, rapid urbanization and a predominantly young population increase demand for affordable, reliable and sustainable transport.

The challenge, therefore, extends beyond securing construction budgets. Governments and their partners must also establish funding arrangements that cover maintenance, operations and long-term financial risks.

Morocco Plans Major Railway Expansion by 2030

Morocco is positioning its railway programme as an example of how sustained investment can transform national mobility and support economic development.

The launch of Al Boraq, Africa’s first high-speed train, marked a significant step in the Kingdom’s transport strategy. Morocco’s railway network now carries more than 55 million passengers annually, according to Khlie.

The country intends to build on this foundation through a major investment drive ahead of the 2030 FIFA World Cup, which Morocco will co-host with Spain and Portugal.

The programme presented at the forum is valued at 134 billion dirhams and encompasses several strategic priorities:

• Extending the high-speed railway towards Marrakech, with the objective of developing a 630-kilometre high-speed network.

• Connecting the railway system to the Nador West Med port.

• Expanding regional passenger rail services and developing rapid transport networks in major urban areas.

• Acquiring new rolling stock to increase capacity and improve service quality.

The investment plans outlined by the ONCF and the Ministry of Transport and Logistics also refer to the acquisition of 660 new railway cars and trainsets, while the ministerial programme specifically mentions 168 new trainsets.

These figures reflect different elements of the broader railway development agenda presented at the forum.

However, Morocco’s ambitions also illustrate the financing pressures confronting railway operators. Khlie warned that traditional public funding mechanisms are no longer sufficient to cover the full cost of increasingly complex infrastructure projects.

Stronger Financial Frameworks to Attract Investors

Morocco’s Ministry of Transport and Logistics has called for clearer contractual arrangements between the state and the ONCF to improve investor confidence.

Such agreements would define the responsibilities of each party, establish financing commitments and clarify how construction, operational and financial risks would be distributed.

At the continental level, participants emphasized the need for closer cooperation between governments, development banks, infrastructure operators and private investors.

One priority is to direct funding towards projects with the greatest potential economic impact, particularly railway corridors connecting seaports, logistics platforms and industrial centres. Better connections between these facilities could reduce transport costs, facilitate freight movements and strengthen trade between African countries.

Development banks are also being encouraged to adapt their financial instruments to railway projects, whose long investment horizons often require patient capital and repayment arrangements extending over many years.

Private-sector participation, meanwhile, will depend on credible business models, transparent governance and a clear allocation of responsibilities for service delivery and infrastructure maintenance.

The central message from Rabat was that financial viability must be assessed over the entire life of a railway asset rather than through construction costs alone.

Carbon Markets Offer an Alternative Source of Funding

Environmental benefits emerged as another potential source of financing for African railway projects.

François Davenne, director general of the International Union of Railways (UIC), argued that the climate advantages of rail transport remain insufficiently reflected in existing financing mechanisms.

Railways can reduce emissions by shifting passengers and freight away from more carbon-intensive forms of transport. Yet the long-term environmental benefits of these projects do not always translate into immediate financial returns for investors.

Davenne identified carbon markets as a possible way to address this gap by generating additional revenue from emissions reductions.

A UIC study estimates that railway development in developing countries could prevent 1.8 gigatonnes of carbon emissions by 2050. Based on the study’s assumptions, the resulting carbon value could represent between $27 billion and $72 billion in potential revenue.

However, a significant difference remains between the carbon prices used in economic assessments and those observed in commercial transactions. While some studies calculate project benefits using a price of approximately €100 per tonne of carbon, market prices have remained below €20 per tonne in the transactions cited at the forum.

To help close this gap, Davenne announced the launch of the Moor Coalition, an initiative intended to update carbon-credit methodologies and seek official recognition under Article 6 of the Paris Agreement.

The objective is to make the emissions reductions generated by railway investments more readily convertible into financing for infrastructure development.

If successfully implemented, such mechanisms could complement conventional public funding, development-bank loans and private investment.

Turning Railway Projects Into Bankable Investments

Securing capital is only part of the challenge. African countries must also prepare projects that meet the technical, financial and institutional requirements of lenders.

Asmaa Bourdai, regional coordinator at the African Union Development Agency (AUDA-NEPAD), stressed that railway infrastructure can generate benefits well beyond passenger and freight transport.

Reliable rail connections can create employment, help agricultural producers reach larger markets and improve access to international trade for landlocked countries. In this respect, railway development is closely linked to broader objectives of economic integration and regional competitiveness.

Bourdai highlighted Morocco’s Atlantic Initiative and its progress in advancing the African Union’s Agenda 2063. She also pointed to the Kingdom’s experience in green finance, including its 2022 green bond issuance, as a potential model for other African countries.

Through South-South cooperation, AUDA-NEPAD aims to encourage the transfer of relevant expertise and financing practices across the continent.

Nevertheless, Bourdai emphasized that projects must be sufficiently developed to attract bank financing. This requires stronger technical preparation, greater alignment of railway standards between countries and clearer arrangements for sharing risks associated with construction, passenger demand and maintenance.

AUDA-NEPAD’s infrastructure development programme and a shared guarantee platform backed by major African and international banks are among the instruments intended to improve financing conditions and help governments move projects forward.

Green Finance and Industrial Development

Beyond raising capital, Morocco is presenting railway investment as an opportunity to strengthen domestic industrial capacity and develop technical skills.

Electrification, improved energy efficiency and the expansion of rail services can support lower-emission transport systems while opening opportunities for green financing.

The Moroccan authorities have also expressed a willingness to share expertise in railway engineering, maintenance and operations with African partners.

Developing local railway industries could help participating countries create skilled jobs, reduce dependence on external suppliers and build the technical capacity required to maintain infrastructure over time.

Such benefits, however, will depend on the ability to combine infrastructure spending with credible industrial strategies and sustainable operating models.

From Investment Pledges to Projects on the Ground

The Rabat forum highlighted a common concern across Africa’s railway sector: ambitious infrastructure plans will remain unrealized unless financing structures, technical preparation and institutional cooperation advance together.

Morocco’s 134-billion-dirham investment programme illustrates the scale of the resources required, while the discussions on carbon markets, green finance and risk-sharing mechanisms point to possible ways of broadening the funding base.

The next step is to convert these proposals into clearly defined projects with identified sources of financing, credible implementation schedules and transparent responsibilities for governments, lenders and operators.

For African railway development, success will ultimately depend not only on the volume of capital mobilized but also on whether investments deliver reliable services, strengthen regional trade and remain financially sustainable over the long term.