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Business Brief: Morocco’s Infrastructure Projects Continue to Draw International Attention; Hollywood’s Love Affair with Morocco Grows; and US Finalizes Missile Sale – Jean R. AbiNader

Jean R. AbiNader, MATIC
December 14, 2016

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

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

A high-speed train project is expected to see its first passengers in 2017, and it is just the beginning for an ambitious effort to link up Africa. Solar power projects in Morocco have gained international recognition because of their role in advancing solar energy, making cost-effective solar energy, and innovative approaches to green financing. Thanks to a boost from Comcast and a pending Moroccan tax incentive, US film leaders see a bright future for the Moroccan film industry. Finally, the US State Department has cleared a pending missile sale to Morocco.

Morocco builds for its transportation and energy future. The long-range contours of the country’s high-speed railroad are coming together in the initial phase between Casablanca and Kenitra. Using innovative technology and efficient processes, firms from France and Italy are on schedule and budget on a project that could well extend until 2035. The rail project is part of Morocco’s vision of emerging as the most advanced transportation hub in Africa, complementing the development and growth of its Atlantic and Mediterranean ports. This will not only be Morocco’s first high speed railway, but Africa’s first as well.

Among the innovations are the rebuilding of conventional track beds to accommodate the high-speed trains, thus reducing costs and build-out time, and new lines planned to connect the tourist cities of Agadir and Marrakech, allowing passengers and products to move from Tangier to Agadir with no transfers.

Of great importance to Morocco is the large number of Moroccans employed in the project. Contractors have spent a great deal on building the skills capacity of the local workforce. Given that Morocco’s existing system could not provide sufficient numbers of trainees, the companies have also trained Moroccans to be the trainers for the undertaking. More than 1400 new employees are now equipped with railway systems skills.

On the energy side, good news continues from COP22 on the progress of Morocco’s solar program. Morocco’s goal is well defined – to generate 14% of its power needs from solar by 2020, part of the country’s goal of 52% energy production from renewable sources by 2030. The multiyear project is called Noor and has several phases. It is run by ACWA Power Ouarzazate, an association of ACWA Power, the Moroccan Agency for Solar Energy (MASEN), Aries and TSK. In addition, the project is being developed on a build, own, operate, and transfer (BOOT) basis.The solar complex will be operated and maintained by a consortium led by NOMAC, a subsidiary of ACWA Power, and MASEN.

Noor 1 has successfully exceeded the expectations in energy production with its launch earlier this year. In 2017, construction will begin at two sites in the southwest, near Laayoune and Boujdour, followed by plants near Tata and Midelt. And Morocco’s success has generated enthusiasm throughout the region, as similar plants are being built in Jordan, Dubai, and Saudi Arabia. The success of these plants in Morocco and others may encourage other African countries to turn sooner to solar power.

Here’s looking at you, Morocco. American film studios’ continued expansion of their activities in Morocco underscores the benefits of its stability and diverse beauty. According to an article in Variety, “Among the biggest productions that chose Morocco were Brad Anderson’s “High Wire Act” with Rosamund Pike and Jon Hamm, Alexandre Moors’ “The Yellow Birds” with Jennifer Aniston, Per Fly’s “Backstabbing For Beginners” with Ben Kingsley, Jason Hall’s “Thank You for Your Services” with Amy Schumer, as well as the trailers for “The Mummy” and “Allied,” and episodes of “Prison Break,” ”The Missing,” ”Viking” and “Homeland.”

While a 20% tax rebate has been passed by Parliament and should be implemented by the new government once it is formed, “Even without the rebate, the country has remained a convenient shooting destination for various reasons: Foreign crews are exempt from paying VAT (20%) and that applies to materials and filming services used; productions can access a diversity of decors (ranging from mountains to the desert and the Atlantic seaside), and finally, local crews are highly skilled, can work long hours and are fairly cheap, which means U.S. productions can staff with locals instead of flying in their entire crews,”argued  the head of the Moroccan Cinema Board Sarim Fassi Fahri.

The latest trip of studio executives to Morocco was planned to coincide with the annual Marrakech International Film Festival and was coordinated by Richard Smotkin, Comcast’s Senior VP of Global Government Affairs and a frequent visitor to Morocco. He remarked, “We know this is not the Middle East, so one of the reasons we put this trip together was to show the executives from American studios what Morocco is and what it can offer; for instance, not many people know it’s only a 6 hour flight from New York.”

This enthusiasm for cinema in Morocco was clear in the initial number of film projects announced at the Film Festival, which will make 2017 an even better year for the industry. As well, the international character of the Festival was reflected in the two top awards going to Chinese directors: Zang Qiwu earned the Grand Prix, while best director honors went to Wang Zuebo.

State Department gives go ahead to missile sale. As part of its decision-making on US arms transfers to the MENA region, the US State Department has approved a sale to Morocco that includes 1,200 TOW 2A RF missiles and 14 TOW 2A fly-to-buy acceptance missiles. It also includes engineering, technical, and logistics support services, and is estimated to cost $108 million. As reported in the DefenseWorld.net story, “This proposed sale helps to improve the security of a Major Non-NATO Ally that continues to be an important force for the political stability and economic progress in North Africa. This proposed sale directly supports Morocco and serves the interests of the Moroccan people and the United States.” Raytheon Missile Systems is the sole principal contractor listed for the potential sale.

Morocco to seek Islamic investment boost. The introduction of Islamic finance, approved by the government earlier this year, will help Morocco attract needed liquidity and foreign investors who prefer Islamic financial instruments. It is anticipated that the first-ever Islamic bond (sukuk) will be issued in the first half of 2017. Minister of Finance and Economy Mohammed Boussaid said that the amount has yet to be determined and will coincide with the national launch of Islamic finance. The central bank is working with Islamic scholars to ensure compliance and clarity in the sector.

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