Water Management in Morocco and its Meaning for Foreign Investors

Water scarcity is becoming a severe problem for Morocco. What does the government do about it, and what possibilities does it open for foreign investors? 

Since 1945, Morocco hasn’t experienced a drought as severe as the one in 2022, according to Nizar Baraka, the Minister of Equipment and Water. Morocco currently faces significant water scarcity, affecting both the quality and quantity of its water supply. Water quality is declining due to pollutants from domestic and industrial wastewater. At the same time, increasing water demand in Morocco is further exacerbating the problem, leading to a decrease in available water resources. Three phenomena are behind this decrease in water availability: the lack of rainfall and lower snowfall, the latter being behind an acceleration of water evaporation.

Although Morocco’s water demand is estimated at 16 billion cubic meters per year, the country has received only 5 billion cubic meters p.a. in recent years. This situation, which has affected Morocco for the past few years, has attracted the attention of Morocco’s leadership. Thus, in his speech to parliament in October 2022, King Mohammed VI highlighted the urgent nature of the water situation in Morocco. He called for new approaches and more ambitious projects to address the country’s water management challenges. The King’s remarks underscored the need for swift and decisive action to ensure a sustainable water supply for Morocco’s future.

Following the King’s instructions, the Moroccan government has adopted the National Program for Water for the period ranging from 2020 to 2027. This program is the first phase of the Moroccan National Water Program of 2020-2050. It aims to accelerate investments in the water sector, particularly to enhance drinking water supplies, which are deemed a priority, as well as irrigation and the country’s resilience in the face of climate-related risks. A budget of 105.5 billion dirhams (about 10 billion euros) should be allocated to implement the program. 

A range of initiatives have already been launched and partially implemented throughout Morocco. One of them is the water highways, which aim to connect the basins of different rivers flowing through the country. In August 2023, Morocco’s first water highway, between the Sebou and Bouregreg rivers, was inaugurated—notably crossing Rabat, the capital, and providing Casablanca, the Kingdom’s largest city, with water. 

Desalination plants have also been built and expanded throughout the country. As of January 2024, about 20 plants were operating in Morocco, with new projects being regularly announced, and public-private partnerships (PPPs) have been kickstarted for plants to be opened in the coming years in Casablanca and Dakhla. The OCP Group, the state-owned enterprise responsible for managing the country’s phosphate reserves, also plays a significant role in the desalination industry in Morocco. The group has launched a water program aimed at meeting its own water needs by implementing innovative techniques and utilizing unconventional water sources. This program intends to eliminate the company’s reliance on freshwater by 2030 and can contribute to supplying water to Moroccan cities. OCP’s efforts have already contributed to meeting the water needs of two middle Moroccan cities, Safi and El Jadida, through seawater desalination. OCP’s efforts have already contributed to meeting the water needs of two middle Moroccan cities, Safi and El Jadida, through seawater desalination. The group, which has already announced a vast plan aiming at producing renewable energy and green hydrogen in the coming years, is thus becoming a major player in the (green) energy – (desalinized) water nexus that is emerging in Morocco. Indeed, climate change response comes at a double cost for Morocco: greening its energy sector and investing in adaptation for possible heightened water scarcity in the coming years.

International cooperation is thus necessary for Morocco to cope with this double challenge and has already provided contributions to investment in water. In July 2023, the World Bank provided a loan of 350 million dollars to support the Moroccan government’s aforementioned National Program for Water 2020–2027. This funding is intended to help Morocco address its water management challenges and to achieve the program’s objectives. In 2024, the European Bank for Reconstruction and Development also announced it had invested about 400 million euros in Morocco in the water sector.

What Would These Developments Mean for Foreign Investors? 

The Moroccan State is demonstrating a certain ability to react to emergencies, plan ahead, and coordinate complex, large-scale infrastructure projects to anticipate and jugulate the problem of water scarcity, which, as a result of climate change, may very well become structural. Attention given to the issue of water scarcity at the higher level of the state – which was epitomized by the royal speech in front of Parliament evoked above – the mention of water in the very name of the Ministry of Equipment, as well as the mobilization of diverse actors to channel investment to new infrastructure all epitomize the fact that the country appears to be working on enhancing its readiness to tackle future shocks. This should come as a reassurance to foreign investors.

Second, Morocco will probably increasingly bet on PPPs to build further infrastructure aimed at providing drinking water to its population, both in bigger coastal cities and in remote areas. This can open new markets for foreign companies operating in the utility sector and, possibly, for foreign investors wishing to invest in infrastructure. For instance, a series of agreements has been signed between Morocco and the United Arab Emirates (UAE) in December 2023  – and the declaration namely mentioned drinking water as a potential sector of collaboration. For instance, through Taqa, a UAE state-owned enterprise from Abu Dhabi, the UAE is already present in electricity generation in Morocco. Taqa is also active in water management in Abu Dhabi, and such companies active in the energy-water nexus could become more prominent in Morocco. The sector could thus attract new foreign infrastructure builders, operators, and capital. The condition for this to happen is to have positive signals from Morocco, with sound management, precise regulation, and legislation paving the way for newcomers.

Third, the effect of water supply on Morocco’s stability is not to be disregarded. Drought has already destroyed 1 million jobs in rural areas in Morocco between 2016 and 2023; it has also contributed to weigh on growth in the country, which heavily depends on rainfall, as agriculture represents about 30% of jobs in the country. In 2017, in Zagora, a city in the southeast of Morocco, citizens protested as they were deprived of access to drinking water. Protests have also erupted in 2024 in Figuig, in eastern Morocco, against a change in water governance in the city. Moroccan authorities should thus act fast and implement the right public policies in a concerted and astute manner to assuage citizens’ fears vis-à-vis water management.