_morocco's upcoming market: green hydrogen from the desert
Regarding renewable energies, Morocco is a pioneer on the African continent. The country is on the verge of a significant transformation. Almost half of the country's workforce is still employed in agriculture, but the industry share is growing. The sun is expected to provide the necessary energy for growth. By 2030, its share is expected to rise to 52 per cent, reducing greenhouse gas emissions by 45.5 per cent. The EU has already pledged investments of 1.6 billion euros. So the signs are good for suppliers and manufacturers of climate-friendly energy solutions. Investments could pay off.
Green energy for sustainable economic growth
Around 45 per cent of Morocco's workforce is currently employed in agriculture - but this only accounts for just under 12 per cent of the gross domestic product. On the other hand, the manufacturing, mining and textile industries are growth sectors with great potential. At this point, whether affordable and reliable energy sources are available significantly influences the decision for or against an investment. The Moroccan slogan is "economy AND environment" - become independent of foreign energy sources and strengthen its economy. The Moroccan Solar Energy Agency MASEN has positioned Morocco as a pioneer in solar and wind energy on the African continent. Internationally important industry players have been attracted, and a high level of expertise has been built up.
Due to its exceptional potential for power generation from solar and wind, the Kingdom is predestined for producing and exporting green hydrogen. The Kingdom's goal of generating a total of 52 per cent of its electricity from renewable sources by 2030 could even be exceeded. By 2040, 70 per cent is on the cards. By 2050, the goal is 80 per cent. Various initiatives to convert energy into hydrogen (Power to X) are already in the start-up phase.
Investments of the European Union
By 2027, the EU will invest around 1.6 billion euros in the energy transition in Morocco as part of the Global Gateway initiative. The plans will create new project opportunities for suppliers and manufacturers of climate-friendly energy solutions. The European Investment Bank (EIB) is also providing EUR 129 million to support the construction of seven photovoltaic power plants - Project Noor Atlas - in eastern and southern Morocco, together with the European Commission and KfW Entwicklungsbank. The total installed capacity is to be 240 megawatts. The project is part of the Moroccan Solar Plan (MSP) and is only one of many projects in which Morocco invests massively in expanding solar energy. The EIB is continuously tendering new projects on this basis.
Three-stage development of the hydrogen sector
A strategy drafted by the bilateral energy partnership Pertenariat Energétique Maroco-Allemand (PAREMA) envisions introducing new technologies and the development of a corresponding infrastructure. Natural hydrogen resources are to be explored by 2030, and the export of green hydrogen products is to be promoted. Moroccan industrial companies are to make greater use of hydrogen in production. By 2040, the first commercially viable power-to-X projects could begin. The plan for 2040 to 2050 envisages the use of green hydrogen in numerous sectors: industry, heat generation, urban mobility and even air transport.
Access for foreign investors
In addition to the support of the Moroccan government and royal family, the Kingdom offers a wide variety of financial and tax incentives to foreign investors, based on Article 28 of Framework Law No. 99-12 on the National Charter for the Environment and Sustainable Development (Loi-cadre n° 99-12 important Charte Nationale de l'Environnement et du Développement Durable, 2014). Specified here are, among other things, subsidies, proportional or total exemption from customs duties, taxes or levies, long-term loans and low-interest loans.
Foreign investors also have an essentially free hand in the renewable energy sector; only the purchase of agricultural land remains barred to them. However, this circumstance holds a solution: a long-term lease from the state or private owners. Shareholdings in Moroccan companies may be up to 100 per cent in foreign hands, and capital and dividends may be exported without restriction, subject to foreign exchange regulations.
Are you interested in Morocco as a business location, or are you planning an investment in renewable energies? Then please do not hesitate to contact us. In addition to answering your questions, we will be happy to provide detailed advice and support for your affairs on-site in Morocco.
Contact:
Mamdouh Al Tajjar, Business Consultant, Associate.
altajjar@clayston.com