Alstom, Engie, TotalEnergies, Bouygues, Safran, Renault, PSA… More than 1,300 subsidiaries of French companies or companies with French capital operate in Morocco, including 38 companies from the CAC 40. To date, France remains the kingdom’s largest trading partner, with trade between the two countries reaching a record 14 billion euros in 2023.
Despite recent diplomatic tensions, economic ties between France and Morocco have remained strong. The latest support from France for Morocco’s sovereignty over Western Sahara is expected to further strengthen these ties. « We welcomed this announcement with great enthusiasm and satisfaction because this historic decision marks a new stage in bilateral relations between our two countries (…). For us, this clearly represents an opportunity to further consolidate economic exchanges and foster a business climate conducive to investment and growth, » says Claudia Gaudiau-Francisco, President of the French Chamber of Commerce and Industry in Morocco (CFCIM), to TelQuel.
Business above all
By the end of 2023, French direct investments in Morocco amounted to approximately 8.1 billion euros, representing 20% of the total capital investments on the continent. Meanwhile, France continues to be a highly sought-after destination for Moroccan investments abroad; these investments increased from 372 million euros to 1.8 billion euros between 2015 and 2022.
The significance of the economy in developing relations between the two countries is such that several major French groups were consulted before President Emmanuel Macron’s letter to King Mohammed VI was sent last Tuesday, on the occasion of the king’s 25th anniversary of reign. According to a business source, these discussions aimed to « anticipate the impacts of France’s recognition of Moroccan sovereignty over Western Sahara on the activities of French groups present in the kingdom and to highlight the mutual benefits of this new diplomatic move. »
These benefits are now available to French companies in various expanding sectors in Morocco, as the country is engaged in several major projects to address new climate challenges, achieve growth objectives, and prepare for hosting two major sporting events: the Africa Cup of Nations (CAN) football tournament in 2025 and the World Cup in 2030.
« The reactions (from French companies) can only be positive, full of optimism and confidence in light of this recognition. For French companies, this means increased stability and prospects for expansion in a region rich in economic potential. Business leaders view this as an opportunity to diversify their activities and explore new opportunities in the region, particularly in sectors such as maritime decarbonization, renewable energy, water, infrastructure, tourism, and many other areas, » emphasizes Claudia Gaudiau-Francisco.
The bet on renewable energies
The first cornerstone of this partnership is renewable energy, encompassing the development of solar, wind, and especially green hydrogen. The prospects in this sector were highlighted by French Minister of Economy and Finance, Bruno Le Maire, during his recent visit to Morocco in April, on the occasion of the Morocco-France Economic Forum, which marked its significant return since 2019.
« You have a geography conducive to deploying photovoltaic panels over thousands of hectares, and we have chosen to develop a photovoltaic production sector in France with advanced technologies and recyclable panels. Let’s combine our expertise, » proposed the French minister at that time.
However, French energy companies did not wait for the green light from the state summit to invest in strategic sectors in Morocco. Several contracts have been signed in recent years to develop projects in renewable energies, particularly in the south of the country, which offers ideal climatic conditions with significant solar and wind potential.
This is the case with Engie, which signed a contract with the Moroccan state in June 2022 for the development of an ambitious hybrid project in Dakhla, alongside Nareva, a subsidiary of the royal holding Al Mada. With an investment of nearly 2 billion dirhams, the project includes a 60 MW wind farm and a seawater desalination plant that will produce approximately 112,000 cubic meters of fresh water per day using reverse osmosis technology.
“Engie sees this diplomatic rapprochement as a unique opportunity to strengthen its presence in Morocco and the region. We plan to explore new investment opportunities, particularly in renewable energies, low-carbon hydrogen, seawater desalination, and energy infrastructure,” says Loïc Jaegert-Huber, Engie’s North Africa Director, to TelQuel. He adds: “This recognition sends a strong signal to investors and companies in both countries, encouraging new partnerships and joint projects. We expect an increase in trade, investments, and collaborations in various sectors, which will benefit the economies of both nations and continents.”
In the energy sector, Morocco is also on the list of countries likely to host projects from the French giant TotalEnergies, which has been studying since 2022 the possibility of investing over 100 billion dirhams in a mega-project for the production of green hydrogen and ammonia in the Guelmim-Oued Noun region. Other groups such as EDF, Vinci, and Veolia are also looking to expand their presence in Morocco by capitalizing on the country’s energy and environmental shift.
High-speed rail in sight
Rail mobility is also at the heart of French industrial interests, as the kingdom embarks on a vast project to expand and modernize its railway network in the coming years. With an investment of 400 billion dirhams by 2040, the program aims to add 3,800 kilometers of new railway lines to the national network to connect 43 cities, up from the current 23, thereby increasing railway service coverage from 51% to 81%.
Two main axes are planned: the Atlantic axis connecting Tangier to Agadir and the Maghreb axis linking Casablanca to Oujda via Fez. The project includes the initial extension of the high-speed rail (LGV) line to Marrakech. The first phase of this line, which has connected Tangier to Casablanca since 2018, was completed by the French company Alstom. Alstom is now competing alongside Spain’s Talgo and South Korea’s Hyundai Rotem to win the next extension contract.
In this 20 billion dirham race, Alstom’s selling point is its new TGV-M: wider (accommodating 740 passengers compared to 630 for Al Boraq), more aerodynamic, capable of speeds up to 350 km/h, but cheaper than previous models.
While awaiting this major contract, another French company, the engineering firm Egis Rail, has made a mark by winning the tender from the National Office of Railways (ONCF) for project management assistance for the extension of the LGV from Kenitra to Marrakech. This bid is part of a consortium including French company Systra and Moroccan firm Novec, which were also involved in the first phase of the LGV in Morocco. The trio’s financial offer of 1.385 billion dirhams was selected by the ONCF, despite a lower bid of 1.309 billion dirhams from Spanish competitor Ineco.
In this new diplomatic era that seals the evident partnership between Morocco and France, both major players and SMEs from France are positioning themselves to take advantage of the new business opportunities in the kingdom, particularly in the southern provinces, which have become a new hunting ground for international companies.
“We have already assisted many companies in discovering, learning about, or establishing themselves in the Southern provinces (…) We would like, depending on the priorities of the local authorities in this region, to contribute to the creation of a cluster dedicated to maritime decarbonization. We also have other areas where we wish to propose economic cooperation, including ports and industrial parks; already launched with several other partner regions such as Guelmim Oued Noun, Laâyoune Sakia El Hamra, Dakhla Oued Eddhab, and Draâ Tafilalet,” hopes Jean-Charles Damblin, Director General of the CFCIM.
Written in French by Safae Hadri, edited in English by Eric Nielson
