Morocco should harness its abundant renewable energy potential for climate mitigation: IMF
In Short : The International Monetary Fund (IMF) has advised Morocco to tap into its abundant renewable energy resources to mitigate climate change impacts. With its substantial solar and wind energy potential, Morocco can significantly reduce greenhouse gas emissions and transition to a more sustainable energy system. By investing in renewable energy projects, the country can not only contribute to global climate efforts but also enhance its energy security, create jobs, and promote economic growth. Harnessing renewable energy sources aligns with Morocco’s climate goals and supports the country’s commitment to combating climate change.
In Detail : This can reduce Morocco’s high reliance on imported fuels, give it comparative advantage in neighbouring markets that are embracing green energy
Morocco possesses significant renewable energy potential that can serve as a strategic tool for climate mitigation, a recent report published by the International Monetary Fund (IMF) on October 27, 2023 highlighted.
The energy sector stands as the largest contributor to Morocco’s emissions, representing 65.1 per cent of total gross greenhouse gas (GHG) emissions in 2018, as reported by the World Bank.
According to the IMF staff country report, Morocco can capitalise on its abundant renewable energy resources to reduce its persistently high dependence on fossil fuels. Morocco has one of the world’s highest rates of solar insolation, with around 3,000 hours of sunshine annually. Furthermore, wind speeds average 5.3 metres per second across more than 90 per cent of the country’s territory.
Fully harnessing this renewable energy potential can decrease Morocco’s heavy reliance on imported fuels, enhance its competitive advantage in neighbouring markets that are embracing green energy transitions and generate employment opportunities.
The Morocco Country Climate and Development Report for 2022 forecasts that over 85 per cent of electricity could originate from renewable energy sources by 2050, a substantial increase from the 20 per cent reported in 2021. This transition could result in a net gain of at least 28,000 jobs annually, amounting to 140,000 jobs within five years, solely within the renewable energy and efficiency sectors.
This estimation does not account for potential job creation in areas such as green hydrogen, electric mobility, or other green industrial investments, which would further bolster employment prospects.
To seize these opportunities, substantial investments in renewable energy, primarily from the private sector, will be necessary. However, attracting private sector investments in renewable energy hinges on further progress in reforming Morocco’s electricity market. Despite recent efforts, substantial work remains to facilitate equitable and transparent access to transmission and distribution networks at regulated tariffs.
The energy sector holds a central role in Morocco’s climate change strategy, contributing significantly to its mitigation endeavours. One key measure involves expanding renewable electricity generation from 17.6 per cent in 2020 to 52 per cent by 2030, as outlined by the International Energy Agency.
To ensure a climate-resilient energy transition in Morocco, the initial step should involve the establishment of a dedicated sectoral plan for the energy sector.
On September 28, 2023, the Executive Board of IMF approved an 18-month arrangement for Morocco under the Resilience and Sustainability Facility (RSF), amounting to the equivalent to $1.32 billion. The primary objective of this initiative is to assist Morocco in addressing its vulnerabilities to climate change, enhancing its climate resilience and capitalising on opportunities for decarbonisation.
Kenji Okamura, deputy managing director and acting chair, stated, “The RSF will help Morocco boost investment in renewable energy, increase energy efficiency, strengthen resilience against natural disasters, green its financial sector, and tackle water scarcity. It will also help bolster Morocco’s external stability by reducing its dependence on imported energy and attracting foreign direct investment. By achieving these objectives and with continued support from other development partners, the RSF is expected to contribute to mobilizing the private financing required to implement Morocco’s climate adaptation and mitigation efforts.“
The report underscored that steering Morocco towards a low-carbon trajectory by the 2050s will necessitate a significant increase in the installed capacity of the power sector, requiring an estimated investment of $46 billion in present value terms.