Rabat – Morocco needs to increase its financing package for green energy production projects by $2.6 billion annually through 2030, and to $17.4 billion annually by 2050 to reach its goal of decarbonizing the economy, argues a new World Bank (WB) report.
Published this week, the report addresses the issue of access to climate financing for developing countries. It maintains that developing countries overall lack access to the necessary financing to scale green transition efforts.
According to the World Bank, developing countries only receive one-fifth of the global investments into green energy projects despite making up two-thirds of the world population.
To address the restricted access to financing, the bank argues that global stakeholders should work towards providing more concessional financing, a type of lending where the lender offers loans to borrowers at interest rates that are below market rates or with more favorable terms than what would be available in the market.
Noting the potential of concessional financing in driving the energy transition, the World Bank recalls the example of Morocco’s solar expansion.
The bank explains that the country’s decade-long expansion in solar energy reflects the “transformative” role that concessional financing can play when combined with a “systematic policy vision.”
Given that the average consumer in Morocco would not have been able to bear the additional cost of green electricity generated from solar plants, concessional financing was critical to the country’s green energy production ambitions.
To avoid passing down the cost to consumers, Morocco resorted to concessional financing tools provided by The Clean Technology Fund (CTF), and International Bank for Reconstruction and Development (IBRD) among other global institutions.
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