«Following the meeting that we chaired for this purpose, the government developed the project “Morocco Offer” for green hydrogen. In this regard, we urge the government to undertake the rapid and qualitative implementation of this project, so as to capitalize on the assets available to our country in this area and to best respond to the projects carried out by global investors in this promising sector.“. This extract from the speech delivered by King Mohammed VI on July 29, 2023, on the occasion of Throne Day, sounds like a reminder that the Head of Government, Aziz Akhannouch, cannot ignore.
Eight months earlier, during a working meeting devoted to renewable energies, the Sovereign had given his instructions for the establishment, “as soon as possible», an operational and incentive “Morocco Offer”, covering the entire value chain of the green hydrogen sector. In addition to the regulatory and institutional framework, this should include a plan of the necessary infrastructure.
Since then, more than two years have passed, without the slightest concrete result on the ground. The so-called “Morocco Offer” is undoubtedly experiencing a delay in igniting, whereas not so long ago, foreign investors were rushing to the gate to express their interest.
From 100 to 40 project requests
On July 16, 2024, Leila Benali, Minister of Energy Transition and Sustainable Development, announced before parliament that nearly a hundred investors, national and international, were interested in the “Morocco Offer”. A figure drastically revised downwards a month and a half later, by some miracle: on August 29, 2024, the presidency of the government came out of its silence to reduce the number to 40 project requests, or 40% of the projections. optimistic” of the supervisory ministry.
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In a study published in January 2024, the International Energy Agency (IEA) bet on an increase “slower than expected» of the production of green hydrogen in the world. “45 GW of new green hydrogen production capacity will be operational by the end of 2028, only 7% of what previous projections predicted», notes its report, entitled “Renewables 2023: Analysis and Forecast to 2028”. Worse: if we examine the projects by 2030, the IEA estimates that of the 360 GW announced, only 12 GW are under construction or have reached a final investment decision. “The slowness of decision-making and the inflation of construction costs for new facilities are at the origin of this delay», Indicates the same document.
Incomprehensible delays
In Morocco, we are still far from any final investment decision. The slowness of the project approval process seems excessive, not to mention somewhat strange. While there is now a broad consensus on the fact that green hydrogen is the energy of the future, and that the sector is among the priority growth drivers of the Moroccan economy. Of the 40 requests submitted for assessment by the steering committee responsible for the “Morocco Offer”, chaired by the head of government, no project has yet seen the light of day. This nonchalance in implementing a strategic file on the ground is all the more incomprehensible given that Morocco is often cited among the best positioned countries in the world, having considerable assets, including its proximity to Europe and the abundance of solar and wind energy.
To see more clearly, Le360 solicited opinions and comments from several stakeholders, including energy companies, developers and experts. All are unanimous in thinking that the strategic positioning enjoyed by Morocco risks being in vain due to unjustified delays. Because in the meantime, its competitors have already moved ahead of it, in accordance with the “first come, first served” principle.
«Countries like Egypt, Saudi Arabia and Oman have gotten a head start by signing international partnerships and launching big projects. However, these projects are often at preliminary stages, and the competition is also based on the ability to develop sustainable ecosystems, beyond the initial announcements.», Says the director of a European firm which bid for the “Morocco Offer”.
However, he continues, a prolonged delay could lead to a risk of loss of strategic positioning as a regional energy hub, in a context where the race for green hydrogen is intensifying at the global level. “The impacts could be measured in terms of economic competitiveness, investor attractiveness and job creation in this key sector», he continues.
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This delay also risks undermining all the efforts undertaken by stakeholders in the green hydrogen ecosystem, well before the release in February 2024 of the circular implementing the “Morocco Offer”. “After the adoption of the 2024 finance law, which promised an incentive framework and unique opportunities, several national and international developers submitted their proposals to the government, via the Moroccan Agency for Sustainable Energy (Masen)», Underlines this energy expert who took part in the development of a green hydrogen project in the Moroccan Sahara.
Long latency phase
These requests notably included pilot projects exploiting solar and wind energy in strategic regions such as Ouarzazate, Tarfaya and Laâyoune, as well as infrastructure plans to produce and export green hydrogen and its derivatives (green ammonia, green methanol ), he explains. These are also integrated solutions including international partnerships with European and Asian players.
-«But after this initial enthusiasm, developers were faced with a prolonged latency phase, with the government still having not finalized the selection of projects nor given a clear and precise timetable for their implementation», Regrets our interlocutor.
«These delays can be explained by the concern to ensure a solid structuring of projects, to guarantee their economic competitiveness and to integrate an inclusive approach with local stakeholders.», tries to justify this senior official, a fine connoisseur of the workings of investment in renewable energies.
Masen, who is responsible for reviewing and validating projects, appears to be taking a careful and methodical approach to selecting proposals, he said. That said, “although this strategy aims to guarantee the viability of the selected projects, it causes significant delays which frustrate investors“, he admits.
Too heavy a bureaucracy
Among the grievances mentioned, a business manager points out a “bureaucracy too heavy», particularly with regard to administrative authorizations, as well as a persistent vagueness concerning tax incentives and guarantees on energy purchase contracts (PPA). “These uncertainties slow down the financial commitments necessary to start the work“, he laments, saying he is disappointed by “the complexity» the coordination, around Masen, of several stakeholders, including ministries, local authorities and international partners. This complex collaboration, he argues, slows down the validation and implementation of projects.
The consequences of this wait-and-see attitude could be disastrous. “Developers who have mobilized significant funds to design their proposals are starting to get impatient. This prolonged uncertainty could push some investors to withdraw or redirect their efforts to other, more responsive markets, such as Saudi Arabia or Namibia.», warns, on condition of anonymity, this academic member of the Moroccan Green Hydrogen Cluster Green H2.
And to add: “Moroccan ambitions to become a leader in green hydrogen are based on rapid implementation of projects to capitalize on growing demand, particularly in Europe. Each month of delay reduces Morocco’s chances of positioning itself as a key player in this competitive market“. The prolonged wait could thus damage Morocco’s reputation as an investment destination, deterring future projects in other sectors linked to renewable energy.
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To remedy this situation and prevent the “Morocco Offer” from suffering from the nonchalance of the executive, our interlocutors call on the government to define a clear and precise timetable for the validation of proposals, guaranteeing transparency and visibility for developers.
Along the same lines, in order to reassure investors, many of our interlocutors are calling on the government to finalize, as quickly as possible, the texts governing purchase contracts, tax incentives and export rules. And on the financing side, we add, hybrid mechanisms, combining Moroccan public funds and international private investments, must be activated to support pending projects.
Who benefits from the delay?
Although the “Morocco Offer” attracted strong interest and ambitious proposals from investors, the prolonged wait from developers highlights flaws in the management and coordination of the project.
Morocco has the natural resources and partnerships necessary to become a key player in green hydrogen. It is up to the government to prove its ability to transform this ambition into reality. Because without a clear response and rapid decisions, the Kingdom risks losing its credibility and losing major opportunities. In short, the ball is now in the government’s court to relaunch this strategic initiative.
Unfortunately, the remarks recently made by the Minister of Energy Transition to parliament are anything but reassuring. “If the Moroccan supply of green hydrogen does not meet competitiveness standards by 2030, we will cease its production (…) It would not be worth committing taxpayers’ money, especially if this production is intended for ‘export“, she declared on January 21 before the Infrastructure and Energy Committee of the House of Representatives.
Twenty-six months after the royal speech calling for the rapid implementation of the “Morocco Offer”, the responsible minister seems to send a discouraging message to stakeholders in the sector, clearly stating that priority will be given to projects linked to gas infrastructure. A backpedaling which does not speak its name and which will certainly not fail to revive the suspicions of conflicts of interest which weigh on the head of government. Because, let’s not forget, Afriquia Gaz, a subsidiary of Akwa, the holding company founded by Aziz Akhannouch, is none other than the exclusive distributor of gas from the Tendrara deposits.
