MOROCCO: An Introduction

The Morocco of the Future: What Are the Legal Issues and Investment Opportunities?

Morocco is facing considerable challenges in a number of sectors, particularly renewable energy (green hydrogen), transport (a motorway network between Nador, Fez and Kenitra), the rail network, water management (desalination and “water highways”) and sports (construction, renovation and extension of stadiums), with investments between now and 2030 estimated at over EUR100 billion.

This situation has accelerated significantly with the co-selection of Morocco, alongside Spain and Portugal, to host the 2030 World Cup, and the selection of Morocco to host the 2025 African Cup of Nations. These events are putting considerable pressure on the infrastructure development timetable, but also represent major opportunities for modernisation, structural transformation of the economy, and greater openness to investment, particularly foreign investment.

The 2030 World Cup: a strategic lever for infrastructure

Morocco’s co-hosting of the 2030 World Cup, alongside Spain and Portugal, represents a historic opportunity to accelerate infrastructure projects, well beyond the sports sector alone. It is part of a broader vision of territorial transformation, economic attractiveness and international influence for the Kingdom. Through this global event, Morocco intends not only to strengthen its hosting capacity, but also to modernise its infrastructure network as a whole, in a spirit of sustainability, regional integration and competitiveness.

This major event should therefore lead to the acceleration and implementation of a number of major infrastructure projects, covering transport (the extension and renovation of airports, improvements to the rail network such as a high-speed line linking Kénitra to Marrakech), development of a more fluid motorway network between the host cities), sports and hotel infrastructure, and urban facilities (soft mobility, cultural infrastructures, digital connectivity, etc).

In addition, the 2030 World Cup will act as a lever for institutional alignment and the mobilisation of public and private investment. The entire ecosystem – local authorities, public establishments, private operators and financial institutions – is invited to commit to a joint dynamic of planning and rapid execution. In this context, the use of innovative methods of financing, such as public-private partnerships or securitisation, could play a decisive role in cushioning the State’s budgetary effort and guaranteeing smooth implementation within the set deadlines.

The rise of green hydrogen

Green hydrogen is at the heart of the Kingdom’s energy priorities. In a global context marked by energy transition, Morocco aims to become a major player in this strategic segment, backed by its abundant natural resources (sun, wind) and its privileged geographical position at the gateway to Europe.

With this in mind, Head of Government Circular No 03/2024 was published on 11 March 2024, concerning the implementation of the Moroccan Offer for the development of the green hydrogen sector.

The Moroccan Offer is aimed at investors wishing to develop green hydrogen projects on an industrial scale, whether these be projects covering the entire value chain – from the production of renewable electricity to the transformation of hydrogen into derivatives such as ammonia, methanol or synthetic fuels – or projects that are more focused on one part of this chain. All these projects can benefit from the support mechanisms set out in the new 2022 investment charter.

In terms of land, the Moroccan government has identified one million hectares with high potential, of which an initial tranche of 300,000 hectares will be made available to investors in the form of lots of between 10,000 and 30,000 hectares. This scheme comes with a guarantee of long-term land visibility, which is essential for planning capital-intensive projects.

The Offer also provides for the development of shared infrastructure (ports, power lines, desalination plants, pipelines, etc) through public-private partnerships. These pieces of infrastructures are essential to ensure the viability and competitiveness of the projects.

As far as incentives are concerned, although no specific scheme has been set up exclusively for green hydrogen, projects can benefit from the mechanisms of the new investment charter, which provides for investment incentives and certain tax exemptions.

However, the development of this still emerging sector poses complex legal challenges. To date, the regulatory framework is incomplete, and legislation to govern the production, transport, distribution and export of hydrogen is still awaited. It will also be necessary to take the specific features of this sector into account: the authorisation regimes, environmental issues and applicable taxation. Securing long-term investment in a capital-intensive sector also requires a clear and protective framework, particularly in terms of land rights and contractual stability.

The new Investment Charter: a renewed framework to support ambition

Adopted in 2022, the new Investment Charter is part of a process of structural transformation of the Moroccan economy. It is based on a set of financial incentives designed to attract high-impact investment, encourage the creation of stable jobs and strengthen the competitiveness of the country’s productive fabric.

Its architecture is based on a main scheme and three specific schemes. The main scheme enables any project meeting certain criteria (amount of investment, number of jobs created) to benefit from a combination of bonuses – territorial, sectoral and joint – representing up to 30% of the amount of the investment. These bonuses take into account a number of factors such as local integration, environmental impact, parity and training efforts.

At the same time, three specific schemes complete the incentive system: the first is dedicated to so-called strategic projects – particularly in the fields of water, energy, food or technological security – with a value in excess of MAD2 billion. The other two are aimed at very small, small and medium-sized enterprises (SMEs) and Moroccan companies wishing to expand internationally.

The main innovation lies in the possibility for investors to sign investment agreements with the State, guaranteeing the benefits granted for the entire duration of the project. This contractual arrangement enhances predictability and legal certainty. A one-stop shop and a steering committee have also been set up to facilitate and speed up the processing of applications, thereby reducing the administrative burden.

For major infrastructure, energy and industrial projects, this reform provides a clearer and more competitive incentive framework at regional level.

Securitisation: an innovative tool for financing infrastructure projects

The reform of the legal framework for securitisation, supported by Act 33-06 as amended and supplemented, marks a major turning point in the mobilisation of long-term savings for structuring projects. Historically reserved in Morocco for credit institutions for the sale of mortgage receivables, this mechanism has gradually been opened to a wider range of assets. It is now possible to securitise future rights generated by infrastructure contracts, concessions or capital-intensive industrial projects.

In practical terms, securitisation involves transferring assets (or rights to future cash flows) to a Fonds de Placement Collectif en Titrisation (FPCT), which issues securities on the markets to investors. This enables project sponsors, including the public and private sectors, to transform illiquid assets into immediately available financial resources. This technique can play a central role in the financing of renewable energy, industrial decarbonisation and critical infrastructure projects, particularly in a context where the State is seeking to limit its indebtedness while supporting a high level of investment.

A recent example perfectly illustrates the potential of this mechanism, namely the debt fund set up for the Office National de l’Électricité et de l’Eau Potable (ONEE) for the construction of an OCGT gas-fired power station at the AI Wahda site in northern Morocco. This innovative arrangement made it possible to finance part of ONEE’s debt via the issue of securities subscribed by qualified investors.

Development of the futures market (marché à terme) and financial instruments to support investment

With a view to modernising the national financial framework and diversifying risk management tools, Morocco has begun to set up a futures market aimed at offering investors, industrialists and economic players hedging instruments against price volatility, particularly in the agricultural, energy and raw materials sectors.

The creation of a Moroccan futures market, governed by Law 42-12, is part of a broader strategy to develop deeper and more sophisticated financial markets capable of supporting the growth of private investment, the structuring of industrial sectors and the stability of strategic value chains. These instruments will eventually enable the trading of standardised futures contracts (commodities, interest rates, indices), while promoting price transparency, liquidity and resilience to external shocks.

At the same time, the Moroccan regulatory ecosystem is gradually opening up to other innovative financial instruments, such as green bonds, sukuks, and interest rate and currency derivatives, all of which are levers for strengthening the competitiveness of the capital market and mobilising diversified financing for structuring projects – particularly in renewable energies, infrastructure and the green economy.