King Mohammed VI of Morocco at the Elysee Palace in Paris France, on February 09, 2015. Chesnot/Getty Images
Abengoa, a Spanish company specializing in international energy technology, announced on Monday that it had recently begun work on a desalination plant in Morocco, the largest in the region. It will supply 100,000 m3/day of drinking water to more than 500,000 people in the city of Agadir and the surrounding area, with the ability to double that capacity in the future. The increased water security provided by the Abengoa plant will significantly help the development of the two main economic drivers in the region: tourism and agriculture. With $88 million in financing through a local partner and a consortium of banks, Abengoa’s plant is the first public-private-partnership project that the National Power and Drinking Water Office has developed. It also demonstrates how Morocco is a rare exception of political stability, with a correspondingly welcoming business environment, in North Africa.
In 2014 Morocco’s GDP grew 3%, boosted by electronics exports that shot up 26.2% and an automobile industry whose exports jumped 26.5%, making it the county’s leading export sector. But this was no temporary trend — Morocco has been cultivating a stable business environment for years. Abengoa, which began working in Morocco in 1977, inaugurated operations at Ain Beni Mathar, Africa’s first solar thermal plant, in 2010. Combining solar power and natural gas, the plant has a capacity of 472MW and generates 10% of the country’s electricity.
The country also has plans for major energy infrastructure construction, as it wants to reduce its reliance on oil and coal imports in favor of natural gas and renewables. In December, Morocco announced that it would increase LNG imports and construct a maritime terminal worth as much as $4.6 billion at the industrial hub of Jorf Lasfar, as well as build four gas-fired power plants of 600MW each.
The Moroccan Solar Energy Program aims to build 2GW of solar capacity by 2020, when renewables will generate 42% of all electricity. A key element is the Ouarzazate complex, which when completed will be the largest solar facility in the world with a total capacity of 560 MW. The project’s budget is roughly $2.35 billion, and it will generate electricity for around 1.3 million people while avoiding some 800,000 tons of annual carbon dioxide emissions. Built by a Saudi firm, the first power plant (with a capacity of 160 MW) will be connected to the grid in October 2015, while all facilities are expected to be operational by 2019.
Most of Morocco’s economy depends on the West, for FDI, export markets, and tourism, so friendly diplomacy is crucial. Luckily, Morocco has very good relations with the U.S., including a free trade agreement. (It also helps that King Mohammed VI uses the monarchy’s historic status as a religious authority to promote moderate Islam in the region). America’s ambassador Dwight Bush said in December that the U.S. is eager to boost FDI to Morocco, and he hailed the country’s solar program as “visionary.”
Relations with Europe are also very friendly, and Morocco aims to double its annual number of tourists (most of whom are European) to 20 million by 2020. Additionally, under pressure to stem the flow of illegal African immigrants to Europe, Morocco is cooperating by offering African migrants legal status so that they can set up businesses and use the country’s health and education systems. As a result of early successes, the program (which started with U.N. funding) will be expanded with funds enthusiastically provided by the E.U.
As a rising economic partner and geostrategic ally of the West, Morocco is primed to continue to prosper — as long as it maintains political stability that is.
