Morocco is poised to receive a €270 million financial injection from the German Power-to-X (PtX) Development Fund, according to Attaqa, the first Arab energy-focused media portal, on Tuesday.
The fund, managed by KGAL, an independent investment and asset manager on behalf of the German Ministry of Economic Cooperation and Development, is part of a €291.07 million allocation to support green hydrogen developers in Morocco and other countries.
The initiative aims to bolster the German-Moroccan partnership in renewable energy and sustainability, as well as to promote the development of green hydrogen projects. The fund focuses on industrial ventures valued above €100 million, that are vital for sectors dependent on hydrogen, such as ammonia, methanol, synthetic fuels, and associated chemical processes fueled by renewable electricity, Attaqa reported.
Qualified industrial projects could be eligible for grants of up to €30 million, Thomas Engelmann, the head of PtX fund management, said. The fund invests in various stages of the PtX value chain, from renewable energy production to distribution, including electrolysis, compression, storage, and hydrogen transportation.
Proposals to receive the non-repayable grants should be submitted by noon on March 1, 2024.
According to Attaqa, the PtX focuses on initiatives around the world. In Morocco, it supports the emerging green hydrogen industry, not only for profit but also to enhance skills and generate jobs.
Janne Rajpar, director of the KfW Development Bank office in Rabat, highlighted Morocco’s expertise in innovative projects and expressed confidence in the country’s ability to utilize these funds effectively.
With investments anticipated from 2024 to 2027, the PtX fund intends to distribute funds to 8 to 10 projects over successive submission stages.
Germany, Europe’s largest industrialized economy, is seeing an increase in demand for green hydrogen as a clean and sustainable alternative, and has previously funded significant projects in this sector in Morocco, including the construction of a €300 million green hydrogen production plant in Tarfaya.
The European Investment Bank believes that Africa’s ability to manufacture green hydrogen might offer a €1 trillion investment opportunity.
By 2035, the continent is estimated to have developed an annual green hydrogen production capacity of 50 million tons, at a highly competitive price of $2 or less per kilogram.
The North African country stands out as an option for Germany due to its abundant natural solar and wind resources, making it an ideal place for the growth of a green hydrogen sector.
Morocco’s solar energy potential is 1,000 gigawatts (GW), whereas its wind energy potential is 300 GW. The current available renewable energy capacity is 4,151 GW, accounting for 38% of the country’s installed power capacity, with ambitions to boost that to 52% by 2030, reported the platform.
The kingdom of Morocco intends to produce around 3 million tons of green hydrogen by 2030, leveraging its renewable energy and seawater desalination capacity, and accelerating its goal of carbon neutrality by 2050.
According to official forecasts by the Moroccan Ministry of Energy, Morocco’s annual income from green hydrogen demand would reach 22 billion MAD ($2.1 billion) by 2030, rising to 330 billion MAD ($31.2 billion) by 2050.