Renewable Energies in Morocco

3 March 2022 - Christian Steiner & Sophie Greiner

Morocco as an investment location for renewable energies

For the development of renewable energies – especially photovoltaics and solar thermal energy – Morocco has particularly good location factors in various respects and thus offers ideal conditions for foreign investment.

Morocco offers ideal conditions for investments in renewable energies, especially photovoltaics and solar thermal energy. Space, sunshine and geographical proximity to Europe and to customers in Africa, as well as Morocco’s political stability, are decisive location factors for promoting the expansion of renewable energies in this North African state.

1. What location factors does Morocco offer for the development of renewable energies?

Thanks to its geographical location, low population density, political stability and – last but not least – an average of 8.8 hours of sunshine per day (as compared to 4.6 hours per day in Germany, 8.2 hours per day in Spain), Morocco holds enormous potential for the development of renewable energies. Domestic consumption is rising steadily, both in private households and in the growing industry. In 1990, for example, total electricity consumption was still 8.17 TWh, of which 2.15 TWh (26.3 %) was used by private households and 4.02 TWh (49.2 %) by industry. Consumption increased by 418% for households and 201% for industry by 2018.  Due to the proximity to Europe, the connection to the Mediterranean and the Atlantic and the country’s good positioning in intra-African relations, several sales markets are available for both piped exports and the shipment of “green” hydrogen. 

The Kingdom recognised these advantages early on: in 2009, Morocco founded the company Masen (Moroccan Agency for Sustainable Energy) as part of its energy strategy.  Since then, the production of all renewable energies has been planned, coordinated and implemented with Masen in cooperation with ONEE (Office national de l’électricité et de l’eau potable). The main tasks are to expand renewable energies, improve energy efficiency and strengthen cooperation with other countries in the region.  With the help of Masen, a large number of international industry players have been attracted over the years, building up a high level of expertise. With an investment of 2.6 billion US dollars in renewable energies to date, Morocco has now risen to become one of the world’s major players in climate and environmental policy. This is also evident in its active participation in international climate negotiations: in 2016, for example, the country hosted the UN Climate Change Conference COP22, which focused on the design of the Paris Climate Agreement and thus also on the technical implementation required for this.

2. Which renewable energies play a role in Morocco?

The main pillars of renewable energy production in Morocco are hydropower, solar and wind energy, with solar energy making up the bulk. Ouarzazate in the south of Morocco, where the Noor solar thermal power plant, the world’s largest solar complex to date, generates renewable electricity on 365 days of sunshine. It stands for internationally acclaimed successes, but also for some painful lessons in terms of energetic transition.

The installed wind capacity is currently around 1,200 megawatts in eleven parks. Hydropower has an installed capacity of 1,770 megawatts. 

Consequently, Morocco is also predestined to produce green hydrogen. The German Federal Ministry for Economic Cooperation and Development (BMZ) estimates that Morocco could meet two to four percent of the world’s demand for fuels from green hydrogen (power-to-X) by 2030.

This is reflected, among other things, in the German-Moroccan Hydrogen Agreement, which was signed in Berlin in June 2020 and provides for the Federal Republic of Germany to support Morocco in the construction of a hydrogen production plant and the subsequent production of green hydrogen.  

3. Is Morocco a stable partner in the MENA region?

After a diplomatic winter of several months, diplomatic relations (and thus also economic relations) between Germany and Morocco have been tentatively beginning to blossom again since the end of 2021. According to the Federal Foreign Office in Berlin: “The Kingdom of Morocco is an important link between North and South, both politically and culturally and economically – the country is a central partner of the European Union and Germany in North Africa. (…) There are significant economic and trade relations between Morocco and Germany. (…) The country plays an important role for stability and sustainable development in the region.” 

This is an important signal for German companies. Investments can be planned for the long term and support can be built on from the Moroccan government and royal family. The European Union also sees Morocco as a guarantor of stability in the MENA region and an important trading partner. 

Since 2000, the Association Agreement between the EU and the Kingdom of Morocco has provided a general framework for relations in the political, economic, social, scientific and cultural fields. 

4. Prospects for investments in the field of renewable energies

Morocco has become one of the world’s main players in renewable energies and intends to remain so. The country has the ambitious goal of increasing the share of renewable energies to 52% by 2030 and investing a total of around 40 billion US dollars in the development of the energy sector by then.  

5. Largely unrestricted access for foreign investors

Foreign investors also have a largely free hand in the renewable energy sector in Morocco. This applies first of all to the participation in Moroccan companies, which may be 100% foreign-owned. Capital and dividends can be exported without restriction, provided the foreign exchange regulations are observed – essentially registration of the investment with the Office des Changes. Only the purchase of agricultural land is prohibited for foreigners. However, the use of suitable land for wind and solar plants can be secured through long-term leases from the state or private owners. The Moroccan state also offers foreign investors various investment incentives, for example in the form of tax breaks, subsidies, full or partial exemption from customs duties, long-term loans or low-interest loans. These incentives were originally made possible in 2014 by Art. 28 of loi-cadre n°99-12

Print Friendly, PDF & Email

Dr. Christian Steiner

Rechtsanwalt (Berlin)
Abogado (Sevilla, Spanien)
Managing Partner MAGHREB

17, rue El Bouhtouri, Quartier Gauthier

20060 Casablanca | MAROKKO

c/ Manuel Bermudo Barrera 3B, 2C

41004 Sevilla | SPANIEN

+212 648 120 763

+34 684 083 156

+34 955 314 614

LinkedIn

Email