Morocco has disclosed that investments in stadium construction and expansion could cost up to 5 billion dirhams ($500 million). [Getty]
Morocco has made a significant return to the international bond market, raising €2 billion in its largest Eurobond sale since 2020.
The funds will help finance an ambitious infrastructure drive ahead of the 2030 FIFA World Cup, which the North African nation will co-host with Spain and Portugal.
The bond sale has already drawn considerable attention. Investors placed bids totalling €6.75 billion (about $7.31 billion)—more than three times the amount Morocco initially planned to raise.
The book runners for the sale are BNP Paribas SA, Citigroup Inc., Deutsche Bank AG and JPMorgan Chase & Co., while Lazard Inc. is acting as advice.
Encouraged by the overwhelming demand, the government expanded the offering from €1.5 billion (about $1.6 billion) to €2 billion ($2.16 billion), reported Bloomberg on 26 March. Rabat has yet to officially confirm the deal.
Morocco offered two types of bonds: a four-year bond and a 10-year bond. The four-year bond will pay 155 basis points (1.55 percent) over midswaps—a common European interest rate—lower than the initial estimate of around 1.9 percent.
The 10-year bond offers 215 basis points (2.15 percent) over midswaps, also cheaper than initially expected thanks to the high investors demand.
However, issuing bonds in euros comes with its risks. If the Moroccan dirham weakens against the euro, the cost of repaying the debt could escalate.
This marks Morocco’s first Eurobond sale in five years, a critical financial manoeuvre as the country ramps up spending to build stadiums, improve transportation networks, and upgrade public services in time for the world’s biggest football tournament.
Morocco has disclosed that investments in stadium construction and expansion could cost up to 5 billion dirhams ($500 million).
Additionally, the country is working to expand its airport capacity and extend its high-speed rail network to Marrakech before the World Cup, with plans to push further south to Agadir.
By 2040, the rail operator aims to double the number of cities it serves to 43, reaching 87 percent of the Moroccan population. Some analysis shows that the total investment in infrastructure for the Morocco World Cup may reach $23 billion, which is about 61.6 percent of the size of the 2022 Qatar World Cup.
As part of an effort to encourage investment, the central bank cut interest rates for a second consecutive time last week to ease local borrowing costs.
Morocco holds the highest non-investment-grade rating from all three major rating agencies—Moody’s, S&P Global, and Fitch Ratings—placing it just below investment grade.
Its last dollar bond sale in 2023, worth $2.5 billion, has performed well, further cementing Rabat’s reputation as a reliable borrower.
In December 2024, the African Development Bank (AfDB) pledged €650 million ($685 million) to support Morocco’s World Cup preparations, specifically targeting transportation infrastructure projects.
The World Bank and the Arab League’s Economic and Social Council have both pledged economic support for Morocco’s World Cup preparations.
Meanwhile, the Gulf Cooperation Council’s Secretary-General, Jassim Muhammad Al-Budaiwi, said that the council would “provide all forms of support and cooperation” for the event.
Rabat has made it clear that co-hosting the World Cup 2030 is more than just a football tournament; it sees it as a chance to present itself on the global stage and invigorate its economy.
The Moroccan government hopes that the large-scale infrastructure projects will create jobs and attract tourism, with the long-term economic benefits outweighing the cost of borrowing.
