Business Brief: COP22, New Investments, King’s Visit to Ethiopia Headline Recent Progress – Jean R. AbiNader

Jean R. AbiNader, MATIC
November 22, 2016

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Jean R. AbiNader, Exec. Dir., Moroccan American Trade and Investment Center

Morocco’s hosting of COP22 was not only an opportunity for King Mohammed VI to promote his vision of energy/environment policies in Africa; it was also a showcase for projects and investments to make the promise of lower carbon emissions a global reality. Immediately following the meetings, the king went on his delayed trip to Ethiopia, where a number of agreements were signed and projects announced. And Morocco’s commitment and achievements in becoming a major industrial gateway to Africa continued to draw the attention of media outlets worldwide.

King Visits Ethiopia, Inks Several Initiatives. According to various news sources, Office Cherifien des Phosphates (OCP) and the Ethiopian Ministry of Public Enterprise have agreed on a partnership to develop a fertilizer complex initially costing $2.4 billion in Ethiopia to serve Africa markets, which are underserved in this critical sector. According to the OCP statement, “This game-changing partnership is based on a common vision between Morocco and Ethiopia for sustainable agricultural development across Africa and reinforces economic ties between the two countries.”

OCP described the project as in several phases, the first of which “will enable the production of 2.5 million tons of fertilizer per year through 2022, rendering Ethiopia self-sufficient in fertilizer and creating opportunities for exports.” A second phase, costing an additional $1.3 billion, will have the potential to increase production to 3.8 million tons annually by 2025, providing additional quantities for domestic and international use.

In his remarks at the signing of the agreement, OCP CEO Mustafa Terrab remarked that “This South-South partnership is part of a common vision for the development of Africa between Morocco and Ethiopia and a strong willingness to strengthen economic ties, and will take full advantage of the complementarity between the respective natural resources of the two countries.”

Additional agreements signed during the trip included improving the use of water resources, establishing a bilateral business council, cooperation in finance and investments, and shipping and logistics.

Morocco Joins World Bank in Africa-Funding Initiative. Morocco is making good on its pledge to support a growth fund for environment projects in Africa. It has joined with the World Bank to launch the “Green Growth Infrastructure Facility for Africa,” to promote Africa’s green economy, as well as collaboration among private and public investments that support the environment. According to the North Africa Post, “it stands out among other funds through its utter orientation towards the emergence of efficient and environment-friendly infrastructure projects motivated by reducing carbon emission.” With its focus on partnerships among public and private players, the fund will facilitate projects in a shorter time-frame than traditional funding mechanisms.

New Project to Focus on Arid Soil Revitalization. Agrobiotek has established a presence in the Moroccan Sahara to utilize novel technology to promote the growth and productivity of crops through the use of “Geleau,” which blends fresh water with a hydro-retainer in a gel able to retain 95% of its content for up to five years, making arid soil cultivatable.  

In an interview with Huffpost Maroc, Kamal Ait Messaoud, an Agrobiotek manager, said, “Our challenge is to start revitalizing an arid and non-fertile land.” He said that the process involved putting a thin layer of gauze under the ground and layering it with organic fertilizer and water. The pilot project will be sited hear Laayoune.

Cooperative Venture to Generate Electricity from Waste. COP22 also provided the backdrop for the long-anticipated move to broaden the use of waste to produce energy. The partners include electricity engineering gian Siemens, PEPS – one of the leading European producers of energy from waste — and NST, a French company that specializes in renewable energy. “The initiative aims to meet the expectations of a National Household Waste Plan, which sets a target of 20 percent recycled and upgraded waste by 2022,” Siemens said in a statement. PEPS currently has a pilot waste-to-energy site in a sector of Casablanca.

New Safety Standards Firm Inks Deal. Novallia, a French software company that provides testing and certification services in a number of economic sectors, has set up a partnership in Morocco to provide its services in energy, hygiene and safety, and industrial risks. As Morocco’s regulatory environment evolves, Novallia sees opportunities in its monitoring and compliance services. From training and consulting to equipment and programming, the company supports companies and agencies to enable them to meet standards related to industrial discharges, gas emissions, solid waste, and food safety.

International News on Morocco’s Economy. Nikkei.com recently featured Morocco’s growth as a major industrial exporter for the automobile and aeronautics sectors. The story attributes the country’s success to its “relatively well-developed infrastructure and high standard of public safety.” It also noted Morocco’s free trade agreements with the EU and the US and its geographic location near to major European markets as assets the country is exploiting.

Among several examples, the articles noted the recent announcement by Bombardier to service Morocco’s railway business in Africa, and the company’s investments in the country’s growing aeronautics manufacturing.

CNN focused on Morocco’s leadership in wind energy, pointing out that “For 80% of the year the wind blows at 17-20 miles per hour in Morocco. It’s a boon for the wind energy sector, with big name players including Siemens and LafargeHolcim attracted to the nation’s pledge to produce 50% of electricity from renewable sources by 2030.

Siemens has invested more than $100 million in a manufacturing plant for its 207-foott- wind turbine blades. “[It’s] the first blade factory in the Middle East and Africa,” says Lasse Eisgrubber, project manager at the Siemens work site in Tangier. “We’re between the Atlantic and the Mediterranean. So we are actually planning to export a lot of our volume, and we can reach a lot of countries here.”

Siemens managers were quick to emphasize that there is great talent available in Morocco, and that it has “been able to fill the whole leadership team with Moroccan people that have great experience.” It’s an attractive investment opportunity that stands on its own two feet. “We don’t need any subsidy to make wind energy happen in Morocco,” Jan Pieter Wildiers, head of Siemens Wind Power Morocco explains, “It’s the most competitive way of providing electricity.”

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