EU proposal could make it harder for Moroccan firms to win development contracts

Moroccan companies may still be allowed to bid for European Union-funded development projects after 2028, but new rules under discussion in Brussels could give European businesses a significant edge, according to two analyses prepared in July 2026 for the European Parliament’s Committee on Development (DEVE).

The reports warn that the EU’s next external funding instrument could create a system where companies from partner countries like Morocco remain eligible on paper while finding themselves pushed aside in practice when major contracts are awarded.

One of the biggest concerns is a proposal that would let the European Commission reserve contracts for EU-based suppliers if it considers doing so necessary to protect the bloc’s security, strategic interests or supply chains.

The studies say that the wording is too broad, leaving key questions unanswered about when the measure could be used, how long it could last and whether companies in the beneficiary country would still be allowed to compete.

That uncertainty matters for Morocco, one of the EU’s closest southern neighbors and a regular recipient of European-funded development projects. Even if projects are implemented in Morocco, local companies could end up excluded from parts of the work if Brussels activates the exception.

The studies also raise concerns about another provision allowing the EU to hand grants directly to private companies established inside the bloc when projects serve strategic priorities such as critical raw materials, digital infrastructure or climate resilience. Because these grants could be awarded without an open competition, Moroccan companies might never get the chance to apply.

According to the authors, the combined effect of those measures risks bringing back what development experts call “tied aid”—development funding that ultimately benefits companies from donor countries more than businesses in the countries where the projects take place.

That approach, they argue, comes at a cost. Citing estimates from the Organisation for Economic Co-operation and Development (OECD), the reports say restricting competition can increase the price of development contracts by between 15% and 30%.

With fewer bidders, governments often pay more for goods and services while becoming more dependent on foreign suppliers for maintenance, spare parts and technical expertise.

For Morocco, fewer contracts for local companies could also mean fewer opportunities for Moroccan subcontractors, weaker local supply chains and less transfer of skills and technology.

Moroccan firms would remain eligible to compete for contracts covering goods, construction projects, services, grants and certain prizes. But the reports stress that eligibility does not guarantee equal access, as participation could still depend on the type of project, the funding mechanism and any restrictions imposed by the European Commission.