AfDB Commits €434m to Morocco as Middle East Crisis Raises Energy Costs

November 14, 2026 | By Semahegn Nigatu

Morocco has secured 434.4 million euros in financing from the African Development Bank (AfDB) to advance public-sector reforms, attract private investment and strengthen its resilience to climate and external economic shocks, including rising energy and transport costs linked to the crisis in the Middle East.

The financing agreement, signed in Rabat on November 13, will fund the third phase of the Economic Governance and Climate Change Resilience Support Programme (PGRCC), which seeks to reposition the private sector as a driver of investment and value creation while refocusing the state on its strategic functions.

The operation combines support for structural economic reforms with measures to strengthen energy and water governance, reflecting Morocco's efforts to address immediate external pressures while advancing longer-term economic transformation.

The first component targets public-sector reform, including restructuring the state-owned enterprise portfolio, modernising the public-private partnership framework and improving the business environment. It is also intended to encourage private investment and help small and medium-sized enterprises integrate into global value chains.

The second component focuses on climate and energy resilience, with reforms aimed at modernising governance in the water and electricity sectors and incorporating climate considerations more extensively into public policy.

The programme will also consolidate reforms undertaken during its previous phases and help Morocco manage the economic effects of the Middle East crisis, particularly higher energy and transport costs.

The African Development Bank said the operation forms part of its Global Energy and Fertiliser Crisis Response Framework, combining short-term economic support with longer-term resilience measures. It is expected to help preserve fiscal space and priority public spending while maintaining the pace of reforms and investment.

Fouzi Lekjaa, Morocco's minister of economy, finance and public performance and the bank's governor for the country, signed the agreement with Achraf Hassan Tarsim, the AfDB's country manager for Morocco.

Lekjaa described the partnership as evidence of the bank's confidence in the country's reform programme under King Mohammed VI, while Tarsim said the financing would support Morocco's efforts to accelerate economic transformation, strengthen growth and create jobs amid external shocks.

The operation aligns with the AfDB's Four Cardinal Points and Morocco's economic priorities, particularly efforts to expand private-sector participation and strengthen the country's capacity to withstand external and climate-related disruptions.

Source: FSX Business News