By adopting an aggressive target for renewable energy and improving energy efficiency (42 per cent and 12 percent by 2020 respectively), lowering fossil fuel subsidies and creating an attractive legal framework for investors, Morocco is facilitating private sector investment in clean energy and low-carbon growth. The country is becoming recognised as a solar power innovation hub, with its renewable energy investment growing from USD 297 million in 2012 to USD 1.8 billion in 2013.16
Climate change financing comes from a range of bilateral and multilateral partners.17 The biggest donors are the European Commission and France with substantial resources from the African Development Bank, World Bank and European Investment Bank. External finance for climate change is provided bilaterally and through global funding mechanisms, and is delivered as grants and loans, as well as technical assistance to projects and government departments. The major instruments are the Clean Technology Fund (CTF) and GEF,18 being the most important current funds for climate change in Morocco.19 By way of example, Morocco secured a USD 125 million loan from the World Bank and a USD 23.95 million loan from the CTF to support its state-owned electricity and water company (ONEE) to develop its first set of three mid-size decentralised solar photovoltaic plants as part of the Clean and Efficiency Project.
In November 2014 four international financial institutions teamed up with the European Union to promote sustainable energy investments in Morocco through the launch of a Sustainable Energy Financing Facility (MorSEFF): the European Bank for Reconstruction and Development, the Agence Française de Dévelopement (AFD), the European Investment Bank and Kreditanstalt für Wiederaufbau (KfW). The €80 million facility will provide loans via a group of local participating banks and financial institutions for energy efficiency and small-scale renewable energy investments by private companies in Morocco.
The Moroccan government is not, however, solely relying on donors and foreign investors. Under the law creating MASEN and the agreements concluded between the State and MASEN regarding each project, the Moroccan government undertakes to guarantee the financial sustainability of the Solar Plan on a project-by-project basis. NOORo Ouarzazate II and III projects’ debt is entirely refinanced by MASEN using funds secured by MASEN from international lenders, including the African Development Bank, the World Bank, the European Commission, the CTF, the AFD and KfW.20