Learning from Morocco’s Climate Action Finance
Climate change in Morocco is expected to significantly impact the country on many levels, as it does for other countries in the MENA region. As a coastal country with a hot and dry climate, the environmental impacts are likely to be broad and diverse.
The impact of these environmental changes on Morocco’s economy is expected to create challenges across all sectors of the economy, particularly in the agricultural and fisheries sectors, which employ half the population and account for 14% of GDP. In addition, with 60% of the population and most industrial activity located on the coast, sea level rise poses a significant threat to major economic forces.
According to the 2019 Climate Change Performance Index, Morocco ranked second in preparedness after Sweden. However, by 2024, Morocco has dropped to ninth in the ranking and moved up one place to eighth in this year’s Index. Morocco receives a medium rating on climate policy, high on greenhouse gas emissions and energy use, and low on renewable energy.
Since Morocco ratified the Paris Agreement in 2015, its Nationally Determined Contribution (NDC) aims to reduce greenhouse gas emissions by 17% by 2030 compared to business as usual, with a possible 32% reduction subject to international support. In June 2021, Morocco submitted an updated NDC with more ambitious targets: reducing greenhouse gases by 18.3% by 2030 compared to business as usual, with a 45.5% reduction subject to international support. Morocco’s contribution to global greenhouse gas emissions is very small (about 0.18%), with the majority of its greenhouse gas emissions coming from the energy sector.
Morocco’s greenhouse gas emissions have increased significantly since the 1960s, reaching 70.58 million metric tons of carbon in 2021. This is consistent with Morocco’s population growth. Per capita emissions have been low and stable since the 1900s, remaining below 2.0 metric tons per capita per year. With Morocco`s ambition to embrace renewable energy, particularly solar, its government plans to reduce greenhouse gas emissions across the ecosystem.
Impacts on the Natural Environment
Most of Morocco’s climate is similar to other countries of the Mediterranean region. Along the coast, the rainy winter season is around 1,200 mm of precipitation, followed by a dry summer. Temperatures in this area range from 8°C to 28°C. The southern region is drier than the coast, with an average rainfall of around 100 mm of rain per year and temperatures ranging from below 0°C to 28°C. Average temperatures across Morocco have been rising by 0.2°C per decade, but between 1971 and 2017, average temperatures rose by 1.7°C.
Morocco experienced an unprecedented heatwave in the spring of 2022, with temperatures well above the seasonal average, attributed to climate change. A dry winter and a five-year trend of declining annual rainfall contributed to severe water scarcity and negatively impacted the agricultural sector. Rising temperatures are linked to increased greenhouse gas emissions, deforestation, and urbanization. Imider, a water-stressed region in southeastern Morocco, is facing water scarcity caused by climate change. The indigenous Berber population has long relied on an efficient irrigation system known as the khiṭara, but rising temperatures and drought, along with phosphate and silver mining in the region, are threatening this centuries-old practice.
In the spring of 2023, a heat wave lowered the season’s average by 5–13°C. Due to the drought that preceded the winter, dams were severely water-deficient, which in turn affected irrigation and other agricultural practices, and exacerbated the loss of biodiversity. Heat waves of this type pose significant threats to ecosystems and are expected to become more common as climate change progresses.
With 60% of Morocco’s population living on the coast, flooding and sea level rise are expected to significantly impact these population centers. These impacts are expected to have the greatest impact on economic activities, including tourism, agriculture, and industry.
The northeastern rural coast of Morocco is particularly vulnerable to sea level rise, tidal surges, and coastal flooding. Some areas of the northern coast are eroding at a rate of one meter per year.
Sea level rise will also affect the lowlands surrounding the Muluya River Delta, a vital wetland on Morocco’s northeastern coast, which is particularly vulnerable to sea-level rise, compaction, flooding, erosion, and overall depletion of the area. The United Nations Intergovernmental Panel on Climate Change (IPCC) estimates that this sea level rise could cause land degradation and economic impacts that “exceed what many countries can tolerate.”
Climate variability is expected to place significant pressure on Morocco’s water resources. Predictions indicate a 10% to 20% decrease in rainfall across the country, with the most severe impacts felt in the southern region. Of the 140 billion cubic meters (BCM) of water that falls in Morocco annually, 118 BCM is lost to evaporation before communities can use it. In addition, climate change will reduce snow cover in the Atlas Mountains, reducing water supplies, while demand factors such as population expansion, urban growth, industry, and tourism continue to put pressure on overall water resources. Furthermore, many coastal aquifers will be increasingly stressed by coastal salinization, and Morocco will reach a very high level of water stress by around 2040.
Morocco experienced an unprecedented heatwave in the spring of 2022, with temperatures well above the seasonal average, attributed to climate change. A dry winter and a five-year trend of declining annual rainfall have contributed to severe water scarcity and negatively impacted the agricultural sector. Rising temperatures are linked to increased greenhouse gas emissions, deforestation, and urbanization. Imider, a water-stressed region in southeastern Morocco, is facing water scarcity caused by climate change. The indigenous Berber population has long relied on an efficient irrigation system known as the khattara, but rising temperatures and drought, along with phosphate and silver mining in the region, are threatening this centuries-old method.
Research Methodology
In order to organize and present information to help the public track climate action, the first big challenge is to bring all the information currently available into a single, easily accessible format. This assessment is achieved by searching the websites of all major multilateral climate finance mechanisms. In order to enable searches across multiple criteria, a single matrix with consistent categories must be created.
To enable searching across multiple criteria, a single matrix with consistent categories had to be created. The total of 61 projects in Morocco since 2010 had to be entered into the matrix under columns that classified them by development fields, sector (private or public), mitigation or/and adaptation purposes, current project phase or status, type of financing, whether as grant, loan, equity (i.e., private investment) or/and domestic contributions from public funds.
It is important to point out that this methodology covers only the projects supported by the major multilateral climate-finance facilities. Bi-lateral and private-sector investments are not tracked within the scope of this study. However significant those green-finance activities may be, they are much more difficult to track comprehensively and do not necessarily involve the same diligence in, and/or scrutiny of state performance to apply normative framework and extraterritorial obligations in cross-border cooperation. That requires another level of interrogation to be taken up in the future.
For consistency in quantifying the values of projects, currency conversions were calculated at the date of project approvals.
Climate Finance Partners
This review covers projects supported by green finance institutions and mechanisms of:
● Adaptation Fund (AF)
● MENA Transition Fund
● Global Environment Facility (GEF)
● Climate Investment Fund (CIF)
● European Bank for Reconstruction and Development (EBRD)
● Green Climate Fund (GCF) and
● World Bank (WB).
Projects in Morocco have received funding of varying values from five global financing mechanisms. The MENA Transition Fund and the Global Environment Facility were the two funds that did not participate in the major changes that Morocco witnessed during this period from 2010 until now. Of these mechanisms, we see 61 projects in different stages.
However, in this period, the MENA Transition Fund has come under the umbrella of the World Bank, and no information has been mentioned in the online sources about new projects under that mechanism.
Some of these facilities such as the World Bank and AfDB finance development project, in general, but maintain particular lines of operation in support of green transition. For example, AfDB, Morocco’s most-prolific green project financing facility, supports development projects in two priority areas: (1) Strengthening inclusive growth through skills development, employability and entrepreneurship; and (2) Consolidating resilience to external shocks by developing sustainable infrastructure. We consider those projects that appear to align with the 2nd priority to identify the green-transition projects. All project values are listed in UAC, but converted to USD at the AfDB’s posted exchange rate of 1 AUC equivalent to USD1.3652.
Numerous projects supported by the Green Climate Fund are multi-country in scope, including Morocco. However, the available information does not disclose the value of projects by country, so these could not be quantified.
Support from AfDB and World Bank for adapting agri-food systems largely target small-scale farmers to adopt “climate-smart” practices, but these projects need to be further evaluated to determine whether or not they are promoting agro-ecology.
World Bank websites provide little detail on two new projects announced in November and December 2024, Municipal Solid Waste Management Support Program, and Transforming Agri-food Systems Program, but announced them only in the form of press releases.
Some other projects merit further evaluation. One such is a large, but canceled AfDB “croissance verte” project that appears to have sought to privatize rural water. It is unclear online how much of the project’s USD 1 billion loan were expended and still payable since its 2016 approval.
The method and the matrix organizing the data do not consider the expenditures to date. That level of monitoring would be telling, but would require dedicating more than available human and other resources. However, that feature and effort could be added to the tool in future
The hazard to watch out for is the prospect of these multilateral facilities financing projects in occupied territory, which would violate international law unless coordinated with the Sahrawi People and its representative institutions. Noteworthy is AfDB’s ambiguous map of Morocco, overlaying occupied Western Sahara.
Distribution of Climate Action by Development Field
From these mechanisms, we see 61 projects at different stages. In order to enable searches across multiple criteria, a single matrix with consistent categories must be created. The number of projects in Morocco since 2010 has reached 61: 18 projects in agriculture, 21 in energy, 7 projects in housing, 11 in the water sector, 5 for financial institutions, 3 in natural resources, 8 municipal infrastructure projects, 3 in solid waste, and 5 in other sectors. Nine projects supported more than one development field at the same time. None of the projects during this period related to transportation.
Of the 21 energy-sector projects, $1.6 billion came in the form, of loans, all of which benefit the private sector. In addition, $221.3 million have been disbursed in that sector as grants.
Mitigation vs. Adaptation
Prima facie, Morocco’s green transition appears to have achieved a closer balance between mitigation and mitigation than other states in the region. Since 2020, the record shows 31 project adapting to climate change versus 37 seeking mitigation of greenhouse gas emissions, with at least ten of those demonstrating both adaptation and mitigation outcomes.
About 60% of the projects supported climate change mitigation measures. With a total of the 37 mitigation initiatives in Morocco dedicated to mitigation, 31 adaptation projects pursued adaptation. Of these seven projects subject of the investigation were classified as having both adaptation and mitigation impacts, while 13 could not be easily classified as either adaptation or mitigation activities. Those unclassified projects aimed to support policy formulation or capitalized financial institutions to support energy investments.
Examining the project activities at the evaluation stage should determine how these funds could be attributed as mitigation or adaptation. By looking more closely at the outcomes, we can better understand their importance to the “green transition.”
The majority of development sectors are involved in these projects. There are no initiatives that directly help the mining and quarrying or industrial sectors. One project focused on solid waste management, five on urban infrastructure and the environment. The EBRD provided financing for twelve projects for an amount of $667.97 million: one in natural resources, six in the energy sector and five projects for financial institutions. The Climate Investment Fund did not make a significant effort in climate financing in Morocco, but financed two energy projects for an amount of $584.63 million, but no further information was provided on the source of financing, private sector participation in development or the stage of implementation.
The most difficult search mechanism to use was the European International Bank, which financed seven projects but did not disclose any of their solid parameters in any of the search engines, which made it difficult to complete the information in the matrix.
With financing from the Green Climate Fund, fourteen projects were financed: seven in the energy sector, six supporting housing, one in agriculture and four in infrastructure and municipalities. Many other projects are devoid of information, failing to specify the values or activities involved, or even the status of the project. To be precise, we have included implementation details that cannot be verified. Ten projects—three related to agriculture, three in the energy field, three in the water and sanitation, and —are being implemented in Morocco with AfDB funding, totaling a value of just over 6.5 billion, of which almost $4.9 billion are loans.
Following the Money
The total amount of the projects is $11.336 billion, of which $8.5 billion is loans, $330 million is grants, and $2.506 billion is from various domestic sources.
Of the total 61 projects, 39 benefit public sector implementers and 31 benefit the private sector, which indicates that nine projects benefited implementers in both public and private sectors at once. Significantly, just over $1.5 billion in AfDB funding is dedicated to support private enterprises in the water and energy fields.
Further critical monitoring is needed to evaluate the purpose (relevance) and impacts of projects in critical fields of development, particularly agricultural, water and energy.
Other European Green-transition Pledges
Outside of the usual project reporting mechanisms, in 2022, the EU, EBRD and GCF announced the provision of up to €13 million to AfDB in Morocco in addition to the €25 million already provided in September 2021. These funds are an extension of an existing loan provided under the Green Economy Financing Facility (GEFF), signed by the EBRD and AfDB in September 2021, to meet a sustained demand for green finance.
In addition, in 2023, the European Commission also announced new cooperation programs worth €624 million in total to support Morocco`s transition to green energy and enhanced governance. These include supporting the green-transition program “Terre Verte”, worth €115 million, which supports Morocco`s agriculture and forestry strategies as well as improving decent employment, ‘green` entrepreneurship, and (climate-adaptive) social security coverage of workers. Also, part of the package is a €50-million Energie verte program, which aims at boosting Morocco`s greening of its economy and energy sector, in line with commitments under the EU-Morocco Green Partnership. These significant contributions add to the tableau of Morocco’s green-transition finance, as well as identify further monitoring efforts required to obtain a full picture of Morocco’s green transition and the finance that makes it possible.
Concluding Remarks
Looking at the information we have provided, we find that terms and categories have been added that we need to explain and know what they refer to. It was necessary to add a column for amounts of project “co-finance” for those values identified by most financiers (except World Bank), concealing the distinction between domestic (public) and equity (investor) co-financing.
Some projects are not identified for the record if they are intended for adaptation or mitigation purposes. Others also remain ambiguous even from the project descriptions. Those are cited as pursuing neither a mitigation nor an adaptation approach.
We still encounter obstacles that need to be resolved. For example, public engagement requires awareness of these important activities. For example, the financing mechanism and even the currency used may affect how project information is presented. The public will have easier access to relevant information across multiple financial formats if the language, data types and presentation are better coordinated, standardized and centralized.
In addition, the climate change plan is somewhat balanced. While most initiatives attempt to minimize future impacts, few are preparing for them. Both of these issues need to be addressed now. There are additional clear issues that require further investigation and examination. For example, details about public and private sector beneficiaries are included in implementation reports and project evaluations, most of which are still in the implementation phase. Answers to these questions also show how climate finance impacts state-owned national assets or leads to further privatization of vital public goods and services.
The burden of public debt and the likelihood of its repayment is another important issue of public concern that requires further investigation. Although discussions between countries still dominate the scene, a people-friendly and people-centered strategy remains essential to address the challenges posed by the common climate crisis we all face. The relatively low level of Arab government involvement in financing green transformation projects raises many issues, especially when it comes to distinguishing between domestic and foreign policies and national behavior. In national, regional and global efforts to transition to a green economy, whether through mitigation or adaptation to climate change, the engagement of civil society is vital.
Concerns that affect us all, as well as climate action and the green transformation, highlight the link between the state and civil society. State-led mechanisms and civil society must consciously support each other. Civic engagement in implementing commitments made by the public sector, businesses and external actors is crucial to ensure that these pledges are shared and benefited from by all segments of the nation’s population.
Numerous projects supported by the Green Climate Fund are multi-country in scope, including Morocco. However, the available information does not disclose the value of projects by country.
In a positive development, we note the launch of a National Climate Finance Tracking Project in 2024, in cooperation with Initiative for Climate Action Transparency (ICAT). Morocco’s Ministry of Energy Transition and Sustainable Development is leading the project implementation, with support from international experts from Gauss International.
A recent World Bank report on Morocco estimates that total investment needed to put Morocco firmly on a resilient and low carbon pathway by the 2050s would be around $78 billion in 2022 USD value. The report also proposes these investments to be gradual and, with the appropriate policies in place, the private sector could shoulder much of the cost.
Download the Climate Finance in Morocco (matrix).
Image: These two satellites images on 14 February 2021 (left) and 13 February 2022 (right) show the consequences of the severe drought underway in Morocco on the vegetation. The image on the left shows agricultural areas with vegetation in full bloom in 2021. The image on the right shows the same areas reflecting an almost total absence of vegetation, as a consequence of the absence of rainfall. Source: European Union/Copernicus #Sentinel3.
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