A report by the Ministry of Economy and Finance reveals that Morocco’s private sector investments in climate finance did not exceed 30% from 2011 to 2019, significantly lower than the 50% median seen in the MENA region and in countries with comparable GDPs during the same period.
The “Climate Finance Strategy 2030” report, conducted in partnership with Bank Al Maghrib, the Moroccan Capital Market Authority (AMMC), and the Supervisory Authority of Insurance and Social Welfare (ACAPS), highlights the limited private investment in climate initiatives despite an estimated $4.5 billion in opportunities between 2025 and 2033.
These opportunities primarily involve mitigation projects, such as green energy production and transportation electrification, which are more appealing to private investors than adaptation projects.
According to the Climate Policy Initiative (CPI), equity investments constitute the largest portion of private climate finance in Morocco, accounting for 30% of total funding. Commercial debt represents 10-15% of funding, mainly directed towards renewable energy projects, while public sources, including concessional loans and subsidies, contribute 39% and 18%, respectively.
To elevate private sector involvement to 50% by 2030, the report emphasizes the need to demonstrate the profitability of these investments through effective financial mechanisms and public policy incentives.
The study also calls for diversifying financial instruments, suggesting the introduction of green asset-based products, innovative financial technology (Fintech) solutions, a voluntary carbon market, and initiatives aimed at the general public, such as electric vehicle purchases and home energy efficiency upgrades.
Additionally, the report points to delays in establishing a green financial taxonomy, which would help stakeholders identify qualifying “green” activities. In response, the Ministry of Economy and Finance has initiated a project to define these criteria in collaboration with financial regulators, supported by the World Bank and the French Development Agency (AFD).
Globally, climate finance averaged $1.3 trillion annually from 2021 to 2022, with the private sector contributing up to 49%. However, over 90% of this funding was directed towards mitigation measures, while adaptation projects received only 5%, with a mere 2% coming from the private sector, largely due to unattractive returns for investors.
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