Morocco and UAE sign $14 billion investment for water and energy transformation

Morocco has recently etched its name in the annals of economic history with an extraordinary $14 billion agreement with the United Arab Emirates. This landmark pact promises to significantly reshape the nation’s water and energy landscape, setting a course for sustainable infrastructure development that could resonate for generations.

The ceremonial signing of this accord marks the largest private investment in Morocco's modern history, intertwining the nation’s future with a comprehensive strategy for water security and energy mastery. Through this investment, Morocco aims to establish a robust framework that includes a 1,400-kilometer electricity superhighway and four state-of-the-art desalination facilities, expected to create approximately 25,000 jobs.

The agreement unites the Moroccan government and the National Office of Electricity and Drinking Water (ONEE) with a consortium of prominent financial entities, including the Mohammed VI Investment Fund, TAQA Morocco, and Nareva, the energy arm of the royal holding Al Mada. This collaboration, valued at MAD 130 billion (approximately $14 billion), signals a significant transformation in national infrastructure by 2030.

A centerpiece of this ambitious plan is the construction of a high-voltage transmission corridor extending from Western Sahara to Casablanca. This network will be complemented by advanced seawater desalination facilities, strategically placed to address the pressing water needs of the nation.

Emerging from a series of diplomatic engagements, this agreement follows His Majesty King Mohammed VI’s private visit to Abu Dhabi and his earlier official state visit, which laid the groundwork for this Moroccan-Emirati partnership.

Water security: A thirst for innovation

In arid regions, water is invaluable. The consortium’s plan features an intricate network designed to channel 800 million cubic meters of water annually from the Sebou and Oum Rabia river basins to regions in need. The first phase of this initiative, operational since August 2023, has successfully diverted around 350 million cubic meters to the Sidi Mohammed Ben Abdellah dam, essential for supplying drinking water to the Rabat area.

The project will see the establishment of four significant desalination plants across the country. A facility in Tanger will have an annual capacity of 50 million cubic meters, while Nador’s plant will boast a capacity of 300 million cubic meters, significantly enhancing the eastern region’s water resources. In Souss, Tiznit will host the largest facility, capable of processing 350 million cubic meters annually. A final plant, either in Tan-Tan or Guelmim, will serve the arid southern regions, further solidifying the national water strategy.

These cutting-edge plants will operate entirely on renewable energy, collectively producing 900 million cubic meters annually, all while maintaining competitive pricing aligned with national benchmarks.

The electric heartbeat: Energy sovereignty reimagined

The energy vision underpinning this investment is anchored in a groundbreaking high-voltage direct current (HVDC) transmission network. Spanning 1,400 kilometers, this infrastructure will connect Dakhla to Casablanca with a capacity of 3,000 megawatts, significantly enhancing energy distribution and stimulating economic growth along the corridor.

This "electricity highway" will be powered by 1,200 megawatts of renewable energy, predominantly sourced from Morocco's sun-drenched southern provinces. This strategic approach capitalizes on the natural resources of the desert regions, converting them into clean energy for industrial centers.

Additionally, the Tahaddart gas-fired power complex will undergo significant upgrades, quadrupling its capacity to 1,500 megawatts, thereby providing stability to the grid amid the increasing reliance on variable wind energy.

The human dividend, capital choreography, and implementation cadence

Beyond infrastructure, the most impactful outcome of this partnership is the creation of jobs. The initiative is set to generate over 25,000 employment opportunities during construction and operation, with around 10,000 permanent roles established post-commissioning.

This collaboration aims not only to enhance infrastructure but also to foster an ecosystem conducive to technology transfer and local expertise in desalination and renewable energy. Educational pathways and technical specializations will be developed, equipping future leaders in Morocco’s water and energy sectors.

The financial framework for this ambitious venture will be managed by the consortium, leveraging both domestic and international capital sources. The urgency of the project is evident, with partners committing to assemble elite technical teams to ensure timely implementation through 2030.

As with any project of this magnitude, regulatory considerations will be paramount. Each component of the initiative will be governed by tailored development agreements between ONEE and the consortium, with the first accord already in place for the expansion of the Tahaddart facility.

The architects of the alliance

This historic partnership capitalizes on the strengths of its key players. Nareva, a leader in Morocco’s electricity sector, boasts 3,200 megawatts of installed capacity and is known for its pioneering wind energy initiatives. TAQA Morocco, publicly traded since 2013, is responsible for a significant portion of the nation’s electricity supply and is focused on advancing national energy transition goals.

This agreement also signals a diplomatic renaissance between Morocco and the UAE, reflecting a renewed partnership that extends beyond economic collaboration. It embodies a vision for enhanced cooperation in critical sectors, including energy and infrastructure development.

Morocco has invested heavily in renewable energy over the past fifteen years, with current projects fulfilling 38% of the country’s electricity needs and aspirations to reach 52% by 2030. Amid ongoing challenges related to water scarcity, this partnership with the UAE is poised to accelerate Morocco’s journey towards resource security and sustainable prosperity.