Morocco and the African Development Bank have signed a €434.4 million financing agreement to support changes to public enterprises, the business environment and the management of water and electricity.
The agreement, signed in Rabat on 13 November, backs the third phase of a programme intended to strengthen economic governance and resilience to climate-related shocks. It brings a new financing step to a reform programme that has already passed through two earlier phases.
Fouzi Lekjaa, Morocco’s minister of economy, finance and public performance, signed for the government. The bank was represented by its country manager in Morocco, Achraf Hassan Tarsim. The bank’s board had approved funding for the third phase on 21 October.
Signing the agreement is not the same as demonstrating that the money has already been disbursed or that all the intended changes have been completed. The programme sets out areas for reform rather than promising that a particular new facility is already operating.
Public enterprises and private investment
One part of the programme focuses on the way the state manages its economic responsibilities. It supports restructuring the portfolio of public enterprises, updating the framework for public-private partnerships and improving conditions for business.
Public-private partnerships involve cooperation between public authorities and private organisations. The arrangements can take different forms, so a commitment to modernise the framework does not by itself establish the terms of a particular contract or transfer ownership of a named enterprise.
The stated goal is to give the private sector a stronger role in investment while concentrating the state’s work on its strategic functions. The programme also seeks to help small and medium-sized enterprises participate in international supply chains and to encourage innovation.
Those goals depend on how the reforms are put into practice. An agreement to improve the business environment is not, on its own, evidence that new investment has arrived or that jobs have been created.
Water and electricity in a changing climate
A second strand concerns climate and energy resilience. It aims to modernise governance in the water and electricity sectors and give climate considerations a more prominent place in public policy. The wider ambition is to support a transition towards a lower-carbon economy.
Water and energy decisions are connected. Water systems require energy, while the choice of energy supply can affect the costs and environmental impact of providing water. Planning for the two together matters when governments are considering how to respond to both supply pressures and climate risks.
At the signing, Nizar Baraka, Morocco’s minister of equipment, water and forests, discussed an approach that includes seawater desalination, the reuse of wastewater and the protection of groundwater. These were part of a wider discussion about water management, not a published list of individual construction projects paid for by the €434.4 million agreement.
Several public bodies have roles in implementing the reforms, alongside government departments. They include the agency responsible for managing state shareholdings, the national electricity and drinking water office and the electricity regulator. Their involvement reflects the range of institutions needed to carry changes beyond the signing of a financing agreement.
Protecting room for priority spending
The third phase also responds to pressure from external shocks. Higher energy and transport costs linked to the crisis in the Middle East are among the pressures identified in connection with the programme.
The financing is designed to support the public budget alongside institutional and economic reforms. The aim is to help preserve room for priority spending and investment while the government faces those pressures. In practical terms, that is different from announcing that the whole sum has been allocated to a single dam, desalination plant or electricity project.
The operation forms part of the bank’s Global Energy and Fertiliser Crisis Response Framework. It is intended to combine a response to immediate economic pressures with longer-term measures for resilience. The broader reforms date back to 2024, and the latest phase is intended to consolidate work from the first two stages.
The significance of the agreement will depend on what follows: how the institutions involved carry out the measures, how the financing is deployed and whether the changes deliver the intended improvements. Those results remain to be established.
