Morocco has a strong domestic financial market and a relatively strong regulatory framework, which makes the kingdom an attractive proposition for private sector investors. Over the period 2014-2019, almost 18% of finance has been invested by the private sector, while some 77% came from ODA loans. Only 5% was extended via grant funding.

EU Institutions and EU Member States have played a central role in financing the Moroccan energy sector, accounting for 91% of the EUR 2.2 billion in ODA commitments extended to the North African country between 2014-2019. A breakdown of European ODA commitments shows the renewable generation subsector accounted for 89% (EUR 1.8 billion) of this development aid, while only 11% has been directed at the transmission and distribution networks; this low figure may reflect the country’s near 100% electricity access rate. As a relatively prosperous Upper Middle Income Country, the vast majority of European funding committed to Morocco over the period, approximately 95%, took the form of ODA loans with only small amount of grant funding.

A strong enabling environment has underpinned Morocco’s emergence as an African leader in renewable energy. The Moroccan Agency for Sustainable Energy (Masen) was created in 2010 to take a leading role in meeting the government’s then ambition of installing a minimum capacity of 2,000MW of solar generation capacity by 2020. Masen’s remit has since been broadened, as it has established a reputation for competence and imagination in developing RE projects. Much of its innovation has focused on the structuring of financing for projects such as the multi-phase Noor solar park at Ouarzazate, which has attracted large-scale debt financing from institutions including the World Bank Group, European Investment Bank, European Commission, AfDB and Germany’s KfW. This, in turn, has attracted bidders offering record low tariffs. Since Masen’s creation, Morocco has expanded its RE ambitions, looking to generate more than half its electricity from RE by 2030. Solar has a leading role to play in this, but other technologies are also making an important contribution, from wind to pumped storage solutions that optimise hydroelectric resources.

Morocco is an example of how strong regulation and liquid local financial markets can help facilitate rapid progress in developing large-scale renewable energy projects and the pursuit of SDG7.