African Development Bank Group and the Kingdom of Five decades of fruitful partnership THE AFDB AND MOROCCO i FIVE DECADES OF FRUITFUL PARTNERSHIP HE F AND OROCCO i T A DB M i FIVE DECADES OF FRUITFUL PARTNERSHIP T D c a e P T a B F T w T . e . f h h x f u .

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i THE AFDB AND MOROCCO i i FIVE DECADES OF FRUITFUL PARTNERSHIP i THE AFDB AND MOROCCO v FIVE DECADES OF FRUITFUL PARTNERSHIP M a r r a k e s h r a i l r o a d s t a t i o n

The words of Donald Kaberuka, President of the AfDB

contributing towards the improvement of human development in - dicators and, obviously, the improvement of the population’s quality of life, namely in the most remote areas. Since the beginning of our cooperation in 1970, the cumulative involvement of the Bank in Morocco totalled nearly 7 billion euros.

Dr. Donald Kaberuka With this experience and knowledge of the realities of the country P as well as its challenges, and considering the changes that have I H S R “We are united by an admirable partnership” arisen internationally and regionally (namely, the debt crisis in Eu - E N T R A O

rope and the Arab Spring), the AfDB has decided to redouble its P C L C U O F R T

he African Development Bank (AfDB) is the first partner of efforts in supporting Morocco in this environment, which is both I O U R F M the Kingdom of Morocco within the development commu - complex and changing. Additionally, to respond to the challenges F D O N S A E

nity. Likewise, Morocco is the Bank’s first client among its including the integration of young people in the job market, the re - D B A D C T F E A regional member countries. This double positioning of the Kingdom duction of unemployment, economic and social inclusion, as well D E E V H I of Morocco is an eloquent indicator of the dynamism and admira - as climate and environmental problems, the Bank and Morocco T F bility that characterizes the cooperative relationship that has united have agreed on a partnership strategy covering the 2012-2016 pe - v the country to the Bank since 1970. This mutual trust has allowed riod. This strategy is articulated around two pillars: the AfDB to contribute to the modernization and structural trans - formation of the Moroccan economy, thus reinforcing its resilience - reinforcing governance and social inclusion; and establishing the Kingdom at the level of the regional invest - - supporting the development of “green” infrastructure. ment, production and exchanges on the continent. The positive performance of the projects implemented up to this In particular, the Bank’s contribution has focused on infrastructure day, the reciprocal trust that characterizes our partnership, the (transportation, energy and mining, water and sanitation, irrigation) reinforced collaboration with the country, and the close follow-up and on the support to key reforms in different sectors (finance, pu - of operations on the field, namely by the Bank’s country office in blic administration, water, agriculture, energy, transportation, tele - Morocco, surely constitute drivers for future success. communications and new information technology, education, health). Thus, the Bank is confident about its contribution towards I would like to express my gratitude to the Moroccan authorities the financing of investment programmes which have enabled Mo - for the trust and the firm support they have always shown regar - rocco to gain the most modern infrastructure and equipment, na - ding our institution. Similarly, I would like to reiterate the Bank’s mely in the transportation, energy and water sectors. The Bank has wish to pursue its support to the Moroccan Government’s efforts equally intervened in the social sector (education and health), thus to reinforce the basis of an inclusive and green growth. H a s s a

v THE AFDB AND MOROCCO n i

T FIVE DECADES OF FRUITFUL PARTNERSHIP o w e r Message from Nizar Baraka, Morocco’s Minister of Economy and Finance

2012-2016 period and which is articulated around the two follo - wing pillars: (i) the reinforcement of governance and social inclu - sion; and (ii) the support to the development of “green” infrastructures.

I welcome the achievement of the implementation of the agree - Mr. Nizar Baraka ments foreseen for 2012, the first year of the current Country P Strategy Paper (CSP), valued at a global amount of over 1.1 bil - I H S R he publication of this brochure gives us the chance to lion dollars. This amount has been directed at financing reforms E N T R A O

highlight this constant and regular support, which that are relevant in the administration and agriculture sectors as P C L C U O F R T

constantly brings the AfDB to economic and social deve - well as following up our country in the implementation of impor - I O U

T R F M lopment initiatives initiated by our country. tant projects, namely in the sector of renewable energy, particu - F D O N S A E

larly the production of solar and wind power. D B A D C F E A I would like to take advantage of this moment to pay tribute to D E E V H I the senior management of the AfDB, its Management Board and As well as this, I am glad that Morocco will be hosting the AfDB T F staff, for the efforts they continuously deploy to reinforce the ad - Group’s Annual General Meetings, from the 27th to the 31st of vii mirable cooperation between Morocco and this institution. May, 2013. Over 3,000 people, including finance ministers, cen - tral bank governors and CEOs from 77 member states that are Since 1970, the date of the beginning of its activities in Morocco, part of the institution, are awaited at the ochre city of Marrakech. the AfDB has financed over one hundred operations, for a cu - Hosting the Annual Meetings will offer my country the opportunity mulative amount of nearly 10 billion dollars. This package, which to establish economic and social development programmes. It classifies Morocco among the AfDB’s main clients, allowed the is also a real forum to transmit these economical liberalization po - institution to follow up the economic and social development of licies and to present its vast investment potential. the Kingdom, through the financing of significant reforms and large investment projects in highly prioritized sectors for the Mo - In this respect, I would like to thank the AfDB for having chosen roccan economy, namely transportation, energy, administration, Morocco to host the 2013 edition of the Annual Meetings. water and sanitation, finance, agriculture, education and health. This choice shows the AfDB’s confidence in the development The current cooperation with the AfDB is inscribed in the frame - process initiated by Morocco under the clear conduct of His Ma - work of the strategic document for the country which covers the jesty King Mohammed VI. Pedestrian walkway, Table of contents

1. African Development Bank Group (AfDB): Introduction 1

A – Creation and Pan-African deployment 1 B – One group, three entities 2 C – A stable and reliable institution 2

2. Morocco/ AfDB: Five decades of fruitful partnership 5

A – Morocco, strengths and challenges 5 B – The Kingdom, the AfDB’s first client 6 C – Building the Morocco of tomorrow: prioritizing infrastructure 8

3. A shared principle: growth for all 9

A – A people-first approach 9 B – Protecting the environment and green growth 9 P I

C – Stimulating competitiveness 10 H S R E N T 4. Sector policies: The impact in the field 13 R A O P C L C U O F R T I O A – Human Development 13 U R F M B – Infrastructure 20 F D O N S A C – Airport: aiming even higher 24 E

D B A

D – Energy D C

25 F E A D E E – Green growth 29 E V H I F – Economy and finance: modernization and good governance 31 T F

Annex: Acronyms and Abbreviations 33 ix M a HE F AND OROCCO x T A DB M r r a FIVE DECADES OF FRUITFUL PARTNERSHIP k e s h p a s s e n g e r s t a t i o n 1. African Development Bank Group (AfDB): Introduction P I H S R E N T R A O P C L C U O F R T I O U R F M F D O N S A E

D B A D C F E A D E E V H I T F

1

The AfDB headquarters in Abidjan

A - Birth and Pan-African deployment before it became effective, on the 10th of September, 1964 – when twenty African states subscribed 65% of the Bank’s capi - It was in Khartoum, only fifty years ago, that the African Deve - tal, a total of 250 million dollars at the time. lopment Bank (AfDB) was born, under the auspices of twenty- three African governments who signed the agreement that With its headquarters in Abidjan, Ivory Coast, the AfDB became created the institution, on the 4th of August, 1963. Stated ob - operational on July 1, 1966, with the launch of its operations in jective: to promote the development of Africa, both at an econo - the field. These have not stopped since and have been extended, mic and social level. reinforcing the Bank’s presence and implementing its support at a continental scale. Nowadays, with a capital of 100 billion dollars Included in the first signatories in Khartoum, the Kingdom of Mo - and 77 member states – African and non-African – the AfDB has rocco was one of the first to ratify the original Agreement, officially become an international development partner of choice on the joining the AfDB on the 2nd of June, 1962, only three months continent. 2 THE AFDB AND MOROCCO FIVE DECADES OF FRUITFUL PARTNERSHIP c o O 3 1 B 2 I n n l . . . o

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D B A D C F E A D E E V H I T F

3

Evolving agriculture B 4 e THE AFDB AND MOROCCO n FIVE DECADES OF FRUITFUL PARTNERSHIP

G u e r i r r a i l r o a d e n l a r g e m e n t w o r k s

2. Morocco/ AfDB: Five decades of fruitful partnership P I H S R E N T R A O P C L C U O F R T I O U R F M F D O N

Mohammed V Airport - S A E

D B A D C F E A D E E V H I T F

A - Morocco, strengths and challenges 5 rate decreased to 3.4% in 2012, from 5% in 2011. This fall was 1. An island of stability mainly due to the effects of a reduced global demand and the sharp decrease of international income from tourism. Adding to In a difficult regional context in terms of politics and economy in this, there was a reduction in transfers from Moroccans living July 2011, Morocco knew how to maintain its position as a block abroad and a fall in agriculture production, due to the impact of of stability. Despite not having faltered, the country established a deficient rainfall on cereal crops. new constitution based on rights and liberties for Moroccan citizens. The current coalition government is led by a party which, Furthermore, Morocco has seen its global budget deficit reach for the first time, has access to the exercise of power. Furthermore, 7.1% of the GDP in 2012, compared to 6.2% in 2011 and had to thanks to the sound macroeconomic options and a sustainable face the increase in energy prices. growth in the non-agricultural sectors, the Moroccan economy has proved a certain resilience facing the world economic recession At the level of perspectives, the Kingdom needs to highlight the since 2008. challenges and barriers present in its economy, to free its huge growth potential. Even better, in this context of rising difficulties, the Sherifian bases of the economy have been consolidated. The political alternation It is mainly about responding to the persistence of young people's did not have a particular incidence on the macro-economical unemployment, realizing the conditions of a perennial and inclusive policies conducted in the Kingdom. growth, readdressing the external competitiveness of the economy, resorbing social deficits, improving the access to basic services Nevertheless, the improvement seen in 2011, despite the ups and and implementing the necessary measures of adaptation to the downs through North Africa, could not be maintained. The growth effects of climate change. 2. Appealing to investors It is mainly about responding to the persistence of young peo - ple’s unemployment, implementing the conditions of a perennial As proof that Morocco knew how to negotiate the turning of the and inclusive growth, boosting external competitiveness of the crisis, its rating remains practically intact for investors. The figures economy, resorbing social deficits, improving the access to basic for Foreign Direct Investment (FDI) attest to this: Morocco remains services and implementing the necessary measures of adapta - a privileged destination in this aspect. tion to the effects of climate change. A vast programme, which is proportional to the Kingdom’s ambitions. Another sign of the power of attraction of the Kingdom: the launch of a 1.5 billion dollars bond issue in December 2012, in B - The Kingdom, the AfDB’s first client the international financial markets. The operation was greeted by the markets and its success confirmed investors’ confidence. 1. An exemplary cooperation For its part, the IMF confirmed in February 2013 Morocco’s P I “continued qualification” to receive a Stand by Line of Credit ap - Morocco and the African Development Bank (AfDB) are part - H S R E proved in the autumn of 2012. ners of experience, with a long relationship of cooperation da - N T R A O

P ting from 1970, when the Bank started financing development C L C U O F R T

I This positive performance could not hide the challenges and projects in the Kingdom. Four priority sectors stand out among O U R F M F constraints weighing over the Moroccan economy and from the consented investment: infrastructure, economic and finan - D O N S A E

D which the Kingdom needs to free itself to reach its full potential cial governance, the social sector and agriculture. Overall, the B A D C F E A D for growth. Bank has invested approximately 7 billion euros in Morocco E E V H I T F

6

Rabat Tramway since 1970, thus imposing itself as the first donor in the King - field. To capitalize its assets and give rise to a more sustainable dom. and inclusive growth, the Moroccan authorities have chosen to focus on the promotion of governance and the upgrade of infra - The regular exchanges with the Moroccan authorities have been structures. This strategic focus logically updated the need to im - determinant in the design and structuring of the new operations, plement the necessary conditions for the promotion of a dynamic namely in terms of conditionalities and the pertinence of the private sector, to assure the diversification of the Moroccan eco - adopted institutional approaches. The reinforced follow-up of nomy. projects by the Bank, namely thanks to the work accomplished by the Bank’s country office in Morocco (opened in 2006) in The trust which constantly reigned among successive Moroccan terms of tidying up the portfolio, has largely contributed to the governments and the AfDB, and the calibre of cooperation which improvement of the programme performance indicators and pro - has always united them, are admirable. The major role of the first jects being implemented. partnership for development played by the AfDB in the Kingdom P is evident, with the sole objective of responding, in the most effi - I H S R The structural and sectorial reforms directed at accentuating the cient manner, to the economic and social challenges faced by E N T R A O diversification of the Moroccan economy have been fruitful on the Morocco. P C L C U O F R T I O U R F M F D O N S A E

D B A D C F E A D E E V H I T F

7

Figure 1 Cumulative loans and donations by the AfDB in Morocco, per instrument (1970 – 2012)

AfDB Loan- Projects (Public) 56%

AfDB Loan- Projects (Private) 1.3%

AfDB Credit-Line (Public) 7.7%

Reforms Loans 31.5%

AfDB Others 3.5% 8 THE AFDB AND MOROCCO FIVE DECADES OF FRUITFUL PARTNERSHIP o t A v a M 2 n n c w – d o t g F n v h h e i

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9 THE AFDB AND MOROCCO FIVE DECADES OF FRUITFUL PARTNERSHIP Also, the AfDB supports the Kingdom’s initiatives to initiate a C - Stimulating competitiveness mass production of renewable energy. Also, it follows the King - dom in its management policies for energy stocks to free itself Green growth has the aim of installing a healthy environment, in from uncertainties, namely through international cooperation pro - which citizens can expand and attain excellence. But it also leads grammes between countries in the region to assure supply. to other challenges, even the encouragement of a performing economy that stimulates capital. This is how the AfDB’s interventions favour the future of an in - clusive growth, while respecting the environment. At the service To this effect, to sustain the development of the competitiveness of a growth that is more inclusive for the rural world, the AfDB of Moroccan companies, the Bank supports the realization of the acts daily within the framework of an integrated development ap - goals inscribed in the sectorial reform programmes, by financing proach, enabling the integration of rural territories in the country’s the activities that enable the improvement of the business envi - development dynamic; a logic of action which progressively ronment. Its action will bring about the reinforcement of the judi - P I opens up the rural world thanks to a series of multi-sector ope - cial system and the reform of regulatory texts regarding a better H S R E rations which support the public policies set by the Government implication of the private sector in the investment and manage - N T R A O

P of Morocco, namely: the reinforcement of drinking water supply; ment of basic infrastructures. At a parallel level, the AfDB will C L C U O F R T

I the opening up and electrification of rural areas; the support to bring its financial and technical support to the sector of SMEs, O U R F M F agricultural development; and improved access to financial ser - through the development of specific programmes, namely in the D O N S A E

D vices. domain of franchising, supporting the expansion of activities in B A D C F E A D the sector of micro-finance for SMEs that cannot, in the current E E V H I T F Additionally, the Bank supports green growth policies with the conditions, have access to bank credit. The Bank will play an ac - necessary financing for renewable energy sources to gain power tive role in the promotion of the company’s good governance, 10 in the national energy matrix, with the deployment, namely, of through specific programmes aimed mainly at the financial sector, projects (solar, wind, hydro) and the project regarding the inte - with the aim of driving good practices within the private sector, grated cycle thermal-solar plant in Aïn Beni Mathar. namely in SMEs.

Port of Amani Abou Zeid, AfDB’s ARGAN funds for the development of infrastructure for a total of Resident Representative in 265 million euros. Morocco: “Continuing the follow-up of Morocco’s The Bank’s interventions in Morocco also integrate twelve ope - efforts” rations (studies and technical support) with a regional feature (support to the Secretary-General of the Arab Maghreb Union, A pivotal year, 2012 saw an AMU), with a total amount of 8.5 billion euros. The core of this important progression in the technical support is financed through donations by the technical number of activities imple - support fund for countries with intermediate revenue (FAT/PRI) mented by the African Deve - and the African Water Facility (AWF). lopment Bank for the Mrs. Amani Abou-Zeid development of Morocco. The AfDB country office in Morocco (MAFO) ensures the dialogue P The most notable is the rein - with public powers, the coordination with partnerships to the de - I H S R forcement of the support that the institution has brought about velopment and care to the follow-up of operations with execution E N T R A O to the strategy of developing the Kingdom at the level of various organizations in the country. Its activities are inscribed in the pro - P C L C U O F R T sectors, such as renewable energy, agriculture, drinking water cess of decentralisation engaged by the AfDB, with the opening I O U R F M and the improvement of economic and financial governance. of the local office in Morocco, in 2006. The Bank’s presence on F D O N S A E

the field not only allowed the improvement of the portfolio’s qua - D B A D C F E A At the financial level, the AfDB intervened by granting 1.1 billion lity and performance, but also the reinforcement of its participa - D E E V H I euros to Morocco for operations approved in 2012. These new tion at the level of the coordination and harmonisation of T F interventions have shown and confirm our engagement, as well development aid with other loan funds, bilateral and multilateral. 11 as placing the Bank as the first donor in Morocco. This coordination is made within the framework of consultation of theme groups and the organisation of joint operational mis - The financing granted to the portfolio, that is, the whole of the sions. projects or programmes undertaken by the AfDB in Morocco, is currently at more 2 billion euros. The division of the Bank’s acti - In a particularly difficult context, namely with the debt crisis in Eu - vities covers numerous sectors: water and sanitation, energy, go - rope and the troubles in certain countries in North Africa and the vernance, education, health, employment, agriculture, finance rest of the continent, the AfDB marks its willingness to continue and transportation, with a strong focus on infrastructure. to follow Morocco in its efforts to pursue the needed economic, social and institutional reforms. The level of engagement and the More precisely, the operations of the energy sector represent continuity of our support are indicators which are sufficiently elo - 34% of the portfolio engagements in banking in Morocco, follo - quent of the dynamics and the admirability of the partnership bet - wed by transportation (24%), water and sanitation (21%) and ween the African Development Bank and the Kingdom of agriculture (7%). The “multi-sector” operations related to the pro - Morocco. grammes that support the reforms, mostly under the form of a budgetary support, represent 5% of the portfolio, and those at It is thus with satisfaction that we envisage the reinforcement of the profit of the private sector, 9%. our frame of cooperation with the Moroccan authorities, facilita - ted namely by the increasing presence of pluri-disciplinary teams The support to the private sector is made by the AfDB’s private at the AfDB’s office in Rabat and by the implementation of new counter. The current portfolio includes two operations: a loan to tools and procedures and the response to the needs of the King - the Sherifian Office of phosphates, and a participation in the dom. O n e 1 THE AFDB AND MOROCCO 2 o IVE DECADES OF FRUITFUL PARTNERSHIP

f F t h e n u m e r o u s a l l i e s o f t h e s o u k i n

M a r r a k e s h

4. Sector policies: impact in the field P I H S R E N T R A O

The multiple realizations of the partnership P C L C U O F R T I O U R F M F D O N S A E

D B A D C F E A A - Human Development D E E V H I T F Several years ago, improving the quality of access to basic • Medical coverage reform support programme 13 services became a priority for Morocco. It is an ambition in line (PARCOUM) with the AfDB’s aid development strategy: to promote inclusive growth for the whole population, particularly the poor and The extension of medical coverage and the availability of quality vulnerable. Fighting inequality and reducing poverty in the care to impoverished populations is a central tenet in the fight Kingdom is a priority, as poverty affects approximately 700,000 against social disparity. The improvement of healthcare, along households, and approximately 200,000 people who are living with a decrease or, where required, the elimination of fees for in precarious conditions (street children, homeless and elderly) medical services will contribute to the improvement of the along with numerous rural communities. economic situation of impoverished households.

1. Health for all The RAMED system (medical support regime) was launched in the context of the programme supporting the medical coverage In this inclusive growth strategy, closely linked to the realization reform (PARCOUM), and was implemented in three phases with of the Millennium Development Goals (MDGs), the promotion of the aim of improving the population’s health and particularly the health is paramount. access to quality care, thanks to the extension of the basic medical coverage for the whole population. 1 THE AFDB AND MOROCCO 4 FIVE DECADES OF FRUITFUL PARTNERSHIP t s s T L A o h a i e o f

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o o f Box 2 The AfDB and ONEE, even more water

The National Office of Electricity and Drinking Water supply (ONEE) has a crucial public service mission: to supply the Moroccan population with water and electricity through the whole logistic value chain: production, transportation and distribution – and to be in charge of sanitation.

The AfDB has been cooperating with ONEE to help it better take over its public service mission, since 1970 in the electricity sector, and since 1978 in the water sector.

To date, the AfDB has spent some 19.7 billion MAD in total, in favour of ONEE, out of which 8 billion were directed at water and sa - nitation.

In terms of access to drinking water and sanitation, the AfDB has mobilised financing for 12 projects, out of which 8 have been concluded and 4 are ongoing.

The AfDB’s support has thus enabled: P

• to secure drinking water (AEP) in several cities in the Kingdom (Tangier, Settat, Meknès, Fès, Berkane, Khemisset, Essaouira, Ben - I H S

guerir, Sidi Kacem, Berrechid, etc.). Nowadays, two big projects are ongoing: the reinforcement of the AEP in the coastal area of R E N

Rabat-Casablanca, as well as Marrakech and the neighbouring areas; T R A O P

• to contribute towards the generalisation of the AEP in the rural areas, in 4 provinces: Kénitra, Chefchaouen, Settat, and Azilal; C L C U O • to participate in the financing of liquid sanitation projects (collection and purification of used water) in Khouribga, Oued Zem and F R T I O U

Boujaad, namely, for the benefit of a population of approximately 380,000 inhabitants; R F M F

• to match strategic projects on the model of the Azur plan in the tourism sector, namely at the level of Essaouira and El Jadida. D O N S A E

D B A D C In the end of 2012, the access rates to drinking water in the rural areas had risen to 92%. F E A D E E V H I had been implemented in Beni Mellal for a long time. In addition, Now, the quarterly bills oscillate between 100 and 200 MAD (10 T F “people were selling their house because of water problems”, to 20 euros). 17 highlights Mohammed, from the roof of his house, in the neighbourhood of the 3rd administrative annex. He added: “Now, • 8th Drinking Water Supply Project (AEPA) they regret it. Because, after water started being distributed, two years ago, the houses gained 5% over their initial value”. Mohammed, like tens of thousands of other fellow Moroccans, Meanwhile, the location has a reservoir with a capacity for 4,200 is benefitting from the 8th drinking water supply project (AEPA). m3. The neighbourhood’s fountain is no longer a battle field filled Based on this, two components of the project have been defined. with water buckets, causing conflicts around the precious liquid. The first component regarding the AEPA in a rural environment

Beni Mellal pumping station has also benefitted from the Water Adjustment Programme (PAS velopment. The project aims to assure the needs for drinking Eau). Financed by the Bank, the PAS Eau programme has water and industrial water in this vast region of Marrakech by enabled the establishment of the programme’s grouped supply 2030. With an estimated cost of 212.1 million UA (247.3 million record in terms of drinking water for rural environments (PAGER) euros, approximately), it is programmed over a period of 60 thanks to a diagnosis undertaken by the national office for months, between 2013 and 2017. The AfDB and the French De - drinking water (ONEP) in 2005 and to confirm the institutional velopment Agency (AFD) co-finance the project, with ONEE and framework (ONEP was designated the sole mouthpiece in this the Group Sherifien of Phosphates (OCP). The implication of the programme). OCP will reinforce the approach to integrated and partnership projects between various stakeholders/beneficiaries in the water • Satisfying the water needs for 3 million Marrakechians sector, thus contributing to the promotion of an integrated ma - nagement of water resources. The city of Marrakech is now the symbol of the vitality of tourism P I in Morocco. The gateway to the Atlas and the Sahara, this green Objectives: in terms of supply, to assure the reinforcement and H S R E oasis has the typical red dirt and ochre architecture and is also the improvement, in quantity and quality, of the supply of drinking N T R A O

P called “Marrakech, the red” or “Southern pearl”. Its medina, its water to 2 million people by 2017; to supply ONEE with the ne - C L C U O F R T

I souks, its roadside shops, its artisans, its famous Djemaa el-Fna cessary means (water sector), as a distributor and producer, as O U R F M F square, now considered a representation of Intangible Cultural well as the autonomous region for the distribution of water and D O N S A E

D Heritage of Humanity by UNESCO, sees over 2 million visitors electricity in Marrakech (RADEEMA) as a distributor, and to match B A D C F E A D every year. the demand in the concerned areas by 2030. To date, the popu - E E V H I T F lation will reach nearly 3 million inhabitants, out of which over a In constant extension, this city with 3 million inhabitants has an million will live in a rural environment. 18 extreme need for a water matrix. Filled with potential (tourism, phosphate) the region of Marrakech has seen an important eco - The AfDB has intervened in a decisive manner in the region since nomic growth, but the lack of water is a barrier to its economic 1982, involved in the first work phase of the purification plant in and social development. This is why the water supply project was Marrakech, destined to treat 1,400 litres/second, and on the se - launched in the Marrakech region. cond phase, in 2008, for an additional capacity of 700 litres/se - cond, and finally in 2012, the third phase of the project (“AfDB The concerned area includes three hubs (Marrakech, Al Haouz 12”), aimed at the treatment of 1,000 litres/second more. This and El Kelaa) which all know an urban, touristic and industrial de - third phase of works to extend the treatment capacities will en -

Marrakesh water supply facility able the response to the growing needs of the region by 2030. schooling. But facing the demand from parents and municipal The project is aligned with the realization of indicator 7 of the Mil - voters, we started classes for the 2nd and 3rd years”. He added: lennium Development Goals (MDGs), regarding the access to “The population is thankful, especially the girls, because this is a drinking water, since the access rate to drinking water in a rural very conservative region. Thus it was very difficult for the parents environment in Morocco will surpass 95% by 2016 (compared to send their daughters far from home. Nowadays, things are dif - to 92% in 2011). It will also enable the response to a significant ferent, it’s a big change”. economic issue: satisfying the needs of the Sherifien Office of Phosphates (OCP) and pre-treated waters for its production site Thanks to the new school, the children can now have hope. Like in Ben Guérir. Also confronted with the depletion of water re - 13-year-old Fatiha: “Now I know that I can finish my studies. The sources in the region, the OCP will benefit from the waters of the college is great, it’s close to where I live. Al Massira dam, not far from Ben Guérir – according to the prin - If I had to go far away, my parents would ciple adopted in the context of the national framework for defi - have had to rent some sort of transport, P cient basins. without mentioning all the difficulties”. In I H S R the community, parents cannot allow E N T R A O

3. Education & Training, a whole programme themselves the luxury of paying for P C L C U O F R T

transport for their children. Far from it. I O U R F M Just inaugurated, the Toualaa high And the children know what this would F D O N S A E

school, in a small rural community nes - represent for them. Like Walid, who lives D B A D C Fatiha, student F E A tled in the province of Benslimane, in the 5 km from the Toualaa high school: “I D E E V H I Chaouia-Ouardigha region, quickly rai - would have been able to study after pri - T F sed its ambitions. Mohamed Manchour, mary school, but I would have to go to 19 director of the school, is very sure of Benslimane. That would have cost my this: “When the school was opened, we parents a lot of money”. Mohamed Manchour, high had planned to have only the 1st year of school director • Education Emergency Plan support programme (PUEN) Box 3 2013-2016: record investment

Over the 2013-2016 period, ONEE estimated an investment If the Toualaa high school was able to of 21.6 billion MAD (nearly 2 billion euros), divided as follows: Walid, student open its doors, it was due to the - 12.5 billion MAD to secure the supply of drinking water Education Emergency Plan (PUEN) launched by the Moroccan (AEP) in urban areas and to follow the urban, industrial and Government. With an implementation period of four years, the touristic development thanks to a supplementary debit of over 18.6 m3/s. The mains connection rate will also be im - proved, as well as the efficiency of power production faci - lities to fight against waste; - 4.3 billion MAD for the AEP in a rural environment enabling the access to drinking water for nearly 96% of this popu - lation, as well as the improvement of their coverage condi - tions. It has also estimated the intervention in nearly 80 rural centres to manage the distribution service for drinking water; - 4.8 billion MAD for liquid sanitation. ONEE has foreseen the increase of the purification capacity to nearly supplemen - tary 118,000 m3/d and to intervene in 40 cities and centres to manage the service of liquid sanitation. project aims to accelerate the implementation of the works Beyond the education of young people and the benefits of stipulated in the National Charter for Education and Training education for all, the issue of the employability of young people is (CNEF). Specifically, it is about generalising compulsory education key, including ensuring the education and training available to all the children from six to 15 years old, and to improve the matches the needs of the Moroccan job market. quality of teaching and the efficiency of the educational system – this is the focus of the PUEN for the country’s education and • Training/Job consonance support programme training system. Therefore, this involves students, teachers, (PAAFE) administrative and service staff, as well as structures (even decentralised) from the Ministries of National Education, and This is the goal of the adequacy of training and jobs support Higher Education and Training. programme (PAAFE) agreed for 2013, for which the AfDB contributes with 100 million euros and which include the World Additionally, a support programme has been created, to support Bank (WB), the French Development Agency (AFD), the P I the efforts deployed by the Moroccan Government in terms of the European Union (EU) and the Moroccan Ministry of Education. H S R E development of skills, the reduction of poverty according to the N T R A O

P framework of the national initiative for human development (INDH) B - Infrastructure C L C U O F R T

I and the Millennium Development Goals (MDGs) by 2015. O U R F M F 1. Transportation: the driver D O N S A E

D As well as the engagement with the Moroccan Ministry of B A D C F E A D Education, the AfDB contributes with 75 million euros for the Always concerned with the economic competitiveness of the E E V H I T F support programme, as well as other fund lessors like the country, the Moroccan authorities have focused on the European Union (EU), the World Bank (WB), the European transportation sector: railway, roads, airports. Morocco is 20 Investment Bank (EIB), the French Development Agency (AFD) and pursuing the revolution of the transportation sector, already at the Spanish Agency for International Cooperation for Development an advanced pace. With this double belief on their radar: (AECID). modernization and development.

Greater urban mobility Marrakesh passenger station P I H S R E N T R A O P C L C U O F R T a. Railway sector: on the railways of the future the capacity so the train can achieve speeds of 60 km/h to 100 I O U R F M km/h. Another time gain (1/2 hour less since June 2013), the F D O N S A E

Marrakech, Saturday, March 16, 2013, 9:20 am. The Marrakech level crossings will be replaced between Casablanca and D B A D C F E A station is pretty quiet. Even the information boards with the Marrakech, as well as between and Casablanca. D E E V H I numerous destinations and departures and the arrivals at the Additionally, a logistic platform should be implemented, towards T F terminal, seem calm. However, less than an hour later, the a future mutualisation at the levels of industrials, which will thus 21 lethargy goes away, when a train enters the station and its flow be able to benefit from the grouping system. of passengers shed across the platform. Hamdi seems to hesitate for a moment, he just stepped down. Logically, he looks Renovated in 2008, the Marrakech like it was the first time he’s been on a train. But the novice, station receives nearly 3 million from Berrechid, 180 km from Marrakech, quickly found his passengers every year. Fadl-Allah assurance. Satisfied with the trip, Hamdi assures that he will Cherkaoui, head of the central station in “happily” take the train again, “due to the comfort and Marrakech, has an acute conscience of punctuality”. his responsibilities: “For us, it is essential that we refer to the quality In the crowd of passengers, the three members of the Diallo barometer, twice a year, to anticipate Fadl-Allah Charkaoui, family get ready to spend a few days in the red city. They took problems”. He explained: “We apply the Station Master the train because “it’s a service with a good value for money. ‘mystery client’ technique and we Especially now that we travel in a group!” inquire about the hospitality and conditions, as well as other aspects”. Facing the bus terminal that borders the station, the railways lead to and Dakhla. The works to double the railway, Marrakech is not the only station confronted with a growing flow financed by the AfDB, have been initiated in 2008. 29 months of travellers. Over the 2004-2009 period, the traffic of travellers of building sites and 129 million MAD have been needed. The throughout the country also registered an average annual second phase of works is ongoing, with the aim of increasing growth rate of 8.1%, while the traffic of goods grew by 2.9%. • Project for the increase of the capacity of the mobility for people and 75% in terms of the flow of goods of the Tangier/Marrakech rail route except for phosphate.

Additionally, the important development in the region of Tangier, Since 1991, the Moroccan government has defined a national thanks to the flight of tourism and the start of the port complex motorway scheme (SAAN) aimed at the construction of 1,500 Tangier Med in 2007, has led Moroccan authorities to draw a km, according to the economic importance of the area and the project to link Tangier and Kenitra with a high-speed train, by structural effect of the implementation of roads. In 2010, 1,096 2015. km had already been achieved.

To this effect, a project to increase the capacity of the • The Marrakech-Agadir motorway into the fast lane Tangier/Marrakech railway route has been launched, to respond to the growing needs for the traffic of goods and travellers by In line with the national road armature scheme, the last mesh of P I 2016. Upgrades on the Settat-Marrakech line with the partial the North-South link, the Marrakech-Agadir road project, is H S R E doubling of the railway on 40 km between the Skhour-Benguerir among the priorities defined in the transportation sector for the N T R A O

P and Sidi Ghanem-Marrakech sections, robustness works and 2006-2010 period. C L C U O F R T

I the creation of a third track on the Kenitra-Casablanca line, O U R F M F control and supervision of works. The project, to which the AfDB The freshly built road now offers a double opening to the tou - D O N S A E

D granted 300 million euros, is significant. Once achieved, it ristic and agro-industrial potential of the interior of the country, B A D C F E A D should help to develop five areas of logistic activity (ZAL) in Tan - towards the north (Tangier) and towards the Atlantic (Agadir). E E V H I T F gier, Casablanca, Zenata, Fès and Marrakech, with 20,000 jobs This link also comes as needed under the perspective of the created expected here and connected activities generated by Maghreb motorway and will contribute towards the sub-regional 22 2020. integration between North Africa, and assure a permanent link for exchanges between Mediterranean Europe and Sub-Saha - b. Road sector: attention, building sites ran Africa/North Africa.

The Kingdom of Morocco has an important road network, with Because of the success of the previous achievements, the Bank approximately 32,100 km of coated roads and nearly one thou - was requested to participate in the financing of the project for sand km of motorway. Road transport in Morocco assures 90% the Marrakech-Agadir motorway, at a cost of 118.60 million

Avenue Ennasr, Rabat P I H S R E N T R A O P C L C U O F R T I O U R F M F D O N S A E

D B A D C F E A D E E V H I Provision of transport and communications facilities, a reality T F

23 euros. A request that was better received than this integrates The basic infrastructure, namely those regarding the opening with the strategy defined by the AfDB for the transportation sec - up of routes, plays an essential role in the social and economic tor in Morocco, aiming to pursue the efforts to modernise infra - development strategy in the rural world. Hence the launch, in structures and create a transportation cost matrix, a competitive 2005, of the national programme for rural roads (PNRR II), ten factor for exports, and the economic and social development years after the first. During the programme, the construction of of the country. Approved in July 2006, the project was conclu - 15,560 km of rural roads are foreseen, divided among coated ded on the 31st of December, 2011. roads (65%) and dirt roads (35%), undertaken in two phases, between 2005 and 2010, and between 2010 and 2015. In this • National programme for rural roads (PNRR), Phase II perspective, Morocco has great chances to achieve the opening up rate of 80% for the rural population, set for 2015. One of the The RP 3217 is not a motorway, but the impact of its new priorities of the Kingdom, mentioned in the rural development concrete ribbon in the region it covers is very clear. On the path strategy for 2020, is the optimisation of living conditions for the connecting the little rural community of Foum Oudi to Aït Amir, rural population, and the improvement of access to basic infra - not far from Béni Mellal, a driver is enjoying a break by the side structures and social services. This policy is precisely aimed at of the road. “When the road was not asphalted, we lost a lot of the reduction of the gap in terms of access between the pro - time”, he said. “The cost of shock absorbers was very impor - vinces most poorly serviced and the ones better doted in this tant. Now we still have the problem of the lack of lighting”. The aspect. RP 3217, which covers approximately 8,000 inhabitants, illus - trates the impact that the interconnection of transport routes Rural development is included in the objectives of the proximity can have, thanks to the construction of new ad hoc routes. policy held by the Moroccan Government and constitutes a real 2 THE AFDB AND MOROCCO 4 FIVE DECADES OF FRUITFUL PARTNERSHIP F i C s s l a W s i

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g refit of Terminal 1, extension of Terminal linked to the energy sector. This is set with the objective of se - 2, a cargo platform, construction of a curing supply and the availability of energy for a lasting deve - third runway (estimated for 2015) and lopment; generalised access to energy at competitive prices, Terminal 4, aviation infrastructure – the the demand matrix and, finally, the preservation of the environ - Mohammed V Airport is equipping itself ment. according to its ambitions. This was confirmed by the airport’s head of ar - To achieve these goals, the strategic guidelines adopted and

Lamia Larhimi, head chitectural studies, Lamia Larhimi: “The architects office aim is to increase the carrying capacity Box 5 Energy consumption climbs from 4 to 6 million passengers per year, assuring the security and quality of services at all times”. In terms In less than 10 years, energy consumption has jumped by 41.24%, reaching 13.7 million tonnes of oil equivant (TOE) in of aerial security, Brahim Lakhlifi is particularly well-placed, as an 2007 compared to 9.7 TOE in 1999. P official and director of aerial navigation. At the control centre’s fa - I H S R cilities for aerial security, he explained: For electric energy use, the leap was even greater, passing E N T

from 13,263 Gwh in 1999 to 22,608 Gwh eight years later. A R A O

“The positive impacts of the works are P C L

jump of 70.46%! C U O F R T numerous: an interoperability with the I O U R F M adjacent European air spaces which declines in terms of short, medium and long-term action plans F D O N S A E

allows us to quietly prepare the inte - have defined strong lines to be implemented to satisfy the gro - D B A D C F E A gration of the European air space, at wing energy demand: D E E V H I first. Then, the air space allows us to T F attract more resources, thus more • The implementation of an optimised electrical mix around 25 clients and more turnover for Morocco. A passenger, at the Mo - reliable and competitive technological choices; The equipment available also has a po - hammed V airport • The mobilisation of national resources for the increase in sitive impact power of renewable energy; over the services provided, thanks to • The promotion of energy efficiency, erected as a national the skills of human resources. Thus we priority as the fastest means and less costly means to bet - have been able to improve the security ter use and save energy; and, of operations”. • Regional integration.

D - Energy This strategy is translated in a concrete action plan, achievable in the short-term, medium-term and long-term, matched by or - Brahim Lakhilifi, director Poorly supplied in terms of conventio - ganisational and regulatory measures which enable the neces - of aviation security nal energy resources, Morocco de - sary visibility for operators. pends from imports at over 97% – almost entirely – to get energy supplies and satisfy growing demand, inherent to its - Short-term: 2009 – 2012 : the adoption and creation of a economic flight and demographic progression. National Plan for Priority Actions assuring the balance between the offer and demand of power and with a particular focus on The Ministry of Energy, Mines, Water and Environment, which the offer, with the creation of 1,400 MW with a budget of 14 plays a central role in the development of the country’s energy billion MAD between 2008 and 2012, and concerning demand sector, has prepared, pursuant to Royal directives, a new na - with the achievement of various actions related to energy effi - tional energy strategy, to free the country from the challenges ciency. These actions have been matched by the implementation of a gies: 42% of the installed capacity will come from renewable re - new legal and institutional framework, a complete industrial offer sources by 2020). integrated for investors and operators (infrastructure, human ca - pital and incentives) and the encouragement of research and - Long-term: 2020 – 2030, the development of alternative options. development through the creation of the IRESEN (Institute of Research in Solar and Renewable Energy) in 2011. 1. Electricity: the main energy source

- Medium-term: 2013 – 2019, an energy mix based on robust and For ONEE’s intervention sectors, the projects benefitting from economical technologies (carbon, rising power of renewable ener - the support of the AfDB are projects with a strong sustainable development component. P I Box 6 ONEE/ AfDB: an admirable cooperation H S R E N T R The AfDB is a leading partner of ONEE as invested with a meaningful public service mission. In addition to water and sanitation, A O P C L C ONEE is in charge of the power sector in all its components: production, transportation, distribution, rural electrification and rene - U O F R T I O U wable energy. R F M F D O N S A

E Initiated in 1970, cooperation between the AfDB and the National Electricity Office (ONE at the time) in this area is among the first

D B A

D interventions of the AfDB in the Kingdom. Since then, the AfDB has spent nearly 11.7 billion MAD, in favour of the Moroccan power C F E A D E E sector, for about a dozen operations. The last of these projects concern two loans signed on 19 November 2012 and 19 December V H I T F 2012 which respectively concern (i) the integrated wind energy programme, the hydropower and rural electrification programme in the amount of 359 million euros, and (ii) the Moroccan Agency for Solar Energy (MASEN) which is part of the 1st phase of the solar 26 plant project in Ouarzazate amounting to 168 million euros. Both these projects were coupled with highly concessional loans made by the Green Technology Fund (FTP) amounting to USD 125 million for the wind energy programme and USD 100 million for the MASEN project.

In 2012, the AfDB made a noteworthy contribution to power sector financing in Morocco.

Tangier electric interconnection station • Electricity Transmission and Distribution Network structure is strategic. "This project is the first and only electricity Development Programme (PDRE) interconnection linking Africa, Europe and the Maghreb," ONEE Division Manager, Ahmed Hamid, said. The connection to Spain On 3 December 2009, the AfDB approved a 109.82 million euro through a 27-km submarine cable with a 1400-KW capacity has loan for the National Power Authority and its proposed Electricity "helped in improving the quality of electricity supply," he proudly Transmission and Distribution Network Development Pro - said of the project. Indeed, the electrical interconnection with gramme (PDRE). Co-financed by AFD, EIB and WB, PDRTRE Spain, commencing with a first line in 1997, reinforced by new aims at enhancing the quality of services provided to all ONE’s cables in 2006 to increase transmission capacity (increased domestic and industrial customers and distribution agencies, from 700 MW to 1,400 MW), and soon a third line of 700 MW improving and securing electricity supply and the network’s re - which is being launched, helps in stabilizing the frequency and liability through increased transmission capacity of the lines. This voltage of the Moroccan network. It is also symbolic of Mo - project will thus facilitate the completion of the Overall Rural rocco’s determination to reduce its share of fossil fuel genera - P Electrification Programme (PERG). tion. I H S R E N T R A O

Indeed, the strong growth in electricity demand (+6% to +8% An actor of this pioneering project, the submarine interconnec - P C L C U O F R T per year on average) and the extension of networks to the entire tion between two continents, Morocco is also at the heart of the I O U R F M country have led to a saturation of the electricity transmission Maghrebian electric power interconnection. The Moroccan, Al - F D O N S A E

network, resulting, in particular, in declines in voltage. gerian and Tunisian networks have indeed been interconnected D B A D C F E A since 1988. In June 2010, Morocco, Tunisia and Algeria adop - D E E V H I Lastly, PDRTRE aims at reducing energy losses between pro - ted an action plan for the 2010-2015 period, expressing their T F duction sites and the distribution network (reduced to 3.5% at common will to create a Maghrebian electricity market with a 27 the end of the project, against 4.7% in 2008), which will also view to joining the European market. Since 2010, a third line lin - help in avoiding the release of 183,000 t/year of CO2 emis - king Algeria to Morocco enabled the Kingdom to benefit from sions. increased capacity of 400 KV – a marginal performance, well below the potential of the energy partnership between the two The Bank’s participation in PDRTRE’s financing is in continua - countries. tion of its operations in Morocco’s energy sector. A review of the electricity sub-sector in Regional Member Countries, 2. Focus on renewable energy conducted by the Bank’s Operations Evaluation Department (OPEV) also commended the quality of electricity transmission Thanks to many ongoing projects, Morocco is on track to projects implemented in Morocco, noting that all the projects achieve its goal of avoiding dependence on fossil fuels thanks had achieved their initial objectives. to energy diversification. However, though Morocco is not rich in oil and gas resources, it has an unusual potential for renewa - • Electricity Power Grid Interconnections trengthening ble energy, with 3,000 hours of sunshine per year on average Project (Morocco/Algeria and Morocco/Spain and 3,500 km of coastline exposed to winds.

On the edge of the Atlantic, the legendary Tangier is the gateway In 2009, King Mohammed VI set the direction: the priority is now to Europe. Only the 14 km of the Straits of separate it on renewable energy. The renewable energy development plan from the Spanish coast. Not far from Tangier, nestled in the rug - was immediately launched. In 2010, the adoption of law 13-09 ged region of the country’s northern tip and facing Spain, the on renewable energy supports this new direction for the Mo - Mellousa Electrical Interconnection Station accounts for 15% of roccan electricity market, endorsing the liberalization of produc - the country’s national electricity production. That is if the infra - tion and commercialization of renewable energy. P I H S R E N T R A O Renewable energies in force P C L C U O F R T I O U R F M F D O N S A E

D under the auspices of ONEE with completion set for 2018: Buil - B A

D Box 6 A huge solar potential C F E A D ding four wind farms with a total capacity of 750 MW, building E E V H I T F Solar: average radiation of 5 kWh/m²/d. Thus, a theoretical an energy pumping station (STEP) as well as an hydroelectric production capacity of 20,000 GW; complex with a 520-MW capacity, building medium voltage 28 Wind: potential estimated at 25,000 MW; Water: more than 200 usable sites for micro-hydro genera - lines (MV) and low voltage (LV) and MV / LV distribution networks tors; to connect some 86,000 households in 25 provinces; building Biomass: 9 million hectares of forest. a 225 kV HV line of 55 km and a 225 / 60 kV station to transmit additional power (300 MW) from the Kenitra station; building a The ambition is lofty: by the end of this decade, renewable 400 kV sub-station to evacuate the additional power (700 MW) sources of energy will account for 42% of Morocco’s energy to be installed at the Jorf Lasfar station. mix (against 19% today). The 6,000 MW of scheduled power will be divided equally between hydropower, solar and wind: Given the programme’s ambition, which is in line with the stra - 14% solar, 14% wind and 14% hydropower by 2020. tegic vision promoted by the Bank in the energy sector. The Bank gave its approval in 2012, granting the PIEHER In this perspective, a portfolio of diversified projects (solar and 271,837,000 euros (more than 3 billion MAD). thermal power plants, pumped storage power stations, waste energy recovery, water pumping, air conditioning and solar • The Ain Beni Mathar Solar Thermal Power Station water heaters, etc.) has been scheduled. Project

• Integrated Wind Energy and Rural Electrification On 12 May 2010, 130 km south of and some thirty kilo - Programme (PIEHER) metres from the Algerian border, the Ain Beni Mathar Solar Ther - mal Power Plant was inaugurated – the first in Africa, indeed in One of the major energy projects in this area is the integrated the world. This solar, gas, steam, combined state-of-the-art Wind Energy and Rural Electrification Programme launched power plant with a total capacity of 472 MW and powered via a 12.6-km long transmission line connected to the Maghreb-Eu - E - Green growth rope gas pipeline (GME), covers 160 ha. Its solar field covers about 88 hectares. Sun rays help in increasing the plant’s total • Green Moroccan Support Programme (PAPMV) capacity by more than 20 MW. In July 2012, the AfDB allocated 105 million euros in the form The environment remains a priority for site managers such as Mo - of a loan to support the Green Morocco Support Programme hamed Bouziane, engineer and head of water treatment: "We do (PAPMV). not use chemicals or fuels. It is a power station that is adaptable to the environment." Endorsed by Moroccan authorities in April 2008, the Green Morocco Support Programme was launched over twelve years Estimated at 420 million euros, the project, co-financed by the (2008-2020) to implement and give shape to the vast structural Global Environment Fund (GEF) through the World Bank, the and sector reforms on agriculture, the central pillar of Morocco’s Spanish ICO bilateral fund and ONEE, received 287 million euros economy. PAPMV’s strategic objective is to help in P through two African Development Bank loans. "The AfDB has strengthening the agricultural sector’s competitiveness, while I H S R been our main donor,” said ONEE Project Manager, Noureddine promoting inclusive economic growth. It also aims at stimulating E N T R A O

Badawi. In addition, it helped us during the establishment of the a huge wave of agricultural investments estimated at about 10 P C L C U O F R T contract, the tender period and evaluation." billion MAD per year so as to transform the agricultural sector – I O U R F M and all its stakeholders, starting with Moroccan farmers – into a F D O N S A E

• Ouarzazate Solar Power Station Project (OZZ I) real socioeconomic development engine. D B A D C F E A D E E V H I 2015 will mark the end of a new phase, with the inauguration Scheduled for completion in 2014, the PAPMV aims at T F of the Ouarzazate new thermal power plant, currently under improving the business climate and sustainable agricultural 29 construction. water management within a context of increasingly scarce

Agriculture production 3 THE AFDB AND MOROCCO 0 FIVE DECADES OF FRUITFUL PARTNERSHIP e b n u g u e p w r 1 o s r o e B a g i . v W O n s n a m a s G B T t e e y M e o e

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g t a h s e i n s Irrigation canal P I H S R • The National Irrigation Water Saving Programme F - Economy and Finance: Modernization E N T R A O

Support Project – (PAPNEEI) and Good Governance P C L C U O F R T I O U R F M Faced with high water stress, Morocco has no choice. It must • Financial Sector Development Support Programme F D O N S A E

effectively and economically manage the increasingly rare water (PADESFI) D B A D C F E A resources. Effective management is necessarily contingent on D E E V H I the meaningful and sustainable use of irrigation water, which For more than two decades now, Morocco has engaged in a T F consumes more than 80% of water resource mobilized. In this long process of extensive economic transformation. This action 31 regard, the Moroccan Government has adopted the National is based on an economy regulated by market forces and gra - Irrigation Water Saving Programme (PNEEI) that aims to dually open to the outside world. In this regard, the Government reconvert a total of 500,000 ha through localized irrigation. launched a series of reforms to stabilize the macro-economic framework, strengthen the quality of the private investment en - vironment and upgrade various sectors, especially the financial Approved by AfDB in December 2009, the National Irrigation sector. The main challenges involved modernizing the regula - Water Saving Programme Support Project (PAPNEEI) involves tory framework of the financial sector (banking, insurance and a budget support (53.59 million euros) to back the virtuous capital markets), and mobilizing savings with a view to boosting initiative by the Moroccan authorities. Concentrated in Loukkos, private investment in the productive sectors. Tadla, Doukkala and Moulouya agricultural regions on nearly 20,000 ha, the project is a privileged instrument for effecting a Hence, a series of first generation reforms were successfully triple conversion: from gravity-fed and spray irrigation to implemented from 1991, through four phases of the Financial localized irrigation; a crop conversion towards high value added Sector Adjustment Programme supported by the Bank. crops; and an institutional conversion towards new organizational systems (aggregation, delegated management, However, in a bid to further diversify the economy, strengthen etc.). The fact that sustainable water resources management competition and improve the business climate, it was neces - cannot but help to improve the living conditions of rural dwellers sary to seek additional mechanisms that would allow for greater is one of the project’s main attractions. resource mobilization, while guaranteeing the stability of the fi - nancial sector. In pursuit of this, a series of second generation • National Guarantee System reforms was launched under the Financial Sector Development Support Project (PASNG) Support Programme (PADESFI). In 2009, PADESFI I was backed with a 162 million euro loan, followed in 2011 by a 224 Within the framework of the Financial million euro loan in support of PADESFI II. Sector Development Support Programme (PADESFI) backed by the Both loans helped to offer greater banking access to indivi - Bank, a number of key reforms were duals. This reflects Morocco’s resolute choice to modernize its undertaken, particularly to boost the Youssef, ABB client banking sector and mobilize savings for private investment. The effectiveness of the national guarantee promotion of conditions for economic growth did not oversha - system. In this regard, the Caisse Centrale de Garantie (Central dow the need to make such growth inclusive. Hence, banks Guarantee Fund, CCG) was retained as the sole guarantee rolled out tools offering access to citizens. “I am a customer for system actor. The approach chosen was to set up a modern P I twelve or so years. One of the strong points of the system is its and integrated information system capable of covering all H S R E proximity to customers.” This testi - customer products/processes and various phases of the CCG N T R A O

P mony by Hamid, an Al Barid Bank C L C U O F Box 8 Supervise financial products to improve living R T

I customer living in Casablanca, is a O U

R conditions F M F high mark for that establishment. D O N S A E

D Youssef, who also shares that view, The bank penetration rate increased by 83% between 2009 B A D C F

E and 2012, thanks particularly to the activities of the Postal A D is also quite happy with the services E E Bank (Banque Postale). The Bank has enabled underprivile - V H I T F offered. “I have just opened a savings ged rural and semi-urban dwellers, especially those with ir - account, from which I will pay my regular income (75% of the Bank’s customers), to have 32 children’s school fees.” access to new financial products capable of improving their Hamid, ABB client living conditions. Moreover, social housing credit received a boost and rose by 40% between 2010 and 2012, while two- thirds of all micro-credit were granted to women in 2011. Lastly, crossed debt in the micro-credit sector fell by 75%.

Al Barid Bank Agency, Casablanca intervention portfolio, and open to partners and customers to “Without CCG, we would have been forced to present streamline exchange based on electronic transactions between guarantors for 3 to 4 million dirhams (300,000 – 400,000 euros). stakeholders. Similar to the existing mechanism in banks, it Thanks to CCG, we were able to take off in 2010 – a real would also include a global risk management mechanism for godsend.” better risk management and system sustainability. A manager in a transport and logistics company (Tangier): Testimonies: “We became aware of Morocco’s position on the international scene. This led us to request financing through CCG to increase Two associates in a legal financing consulting firm (Tangier): our capacity. It also enabled us to obtain a guarantee. This “CCG’s support was very important to us. The fact that they saved us time when looking for financing. In other words, ins - provided guarantee to a bank enabled us to start our activity tead of one year, we would have taken three more years to ob - rapidly, within a few weeks. That would have been far more tain funding.” P difficult with a traditional bank.” » I H S R The project helped to double the outstanding guarantee com - E N T R A O

A manager in a waste management company (Tangier): “We mitment to companies by the Caisse Centrale de Garantie (Cen - P C L C U O F R T nursed the idea of setting up a company as far back as 2006. tral Guarantee Fund, CCG) between 2008 and 2010. I O U R F M With all the equipment and logistics necessary to operate, we F D O N S A E

did not have the resources to take off. For us, CCG provided Furthermore, more than 500 very small businesses (VSBs) have D B A D C F E A an access to a guarantee and the investment. benefited from the special guarantee product introduced in 2012. D E E V H I T F

33

The beneficiaries and the manager of the CCG (Tangier) in a meeting 3 THE AFDB AND MOROCCO 4 FIVE DECADES OF FRUITFUL PARTNERSHIP W T h B 2 O p c T h f T t f m t T a r h a u i 0 o h h h h r o o n s c t o o e i r 1 e e e n e z i m

x

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3 THE AFDB AND MOROCCO 5 FIVE DECADES OF FRUITFUL PARTNERSHIP

Morocco, land of contrasts and dynamism 3 THE AFDB AND MOROCCO 8 FIVE DECADES OF FRUITFUL PARTNERSHIP Contact: Avenue du Ghana Angle des Rues Pierre de Coubertin et Hedi Nouira BP 323 Tunis-Belvedere 1002 Tunisia Tel.: (216) 71 10 29 16 Fax: (216) 71 83 44 79 Email: [email protected] Internet: www.afdb.org

L A Y / U C R E

N G I S E D

-

External Relations and Communication Unit 3 1 0 2

B D f A

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