Casablanca – Morocco is entering a new phase in its efforts to secure drinking water supplies as pressure on water resources continues to intensify. Against a backdrop of recurring droughts, rising demand, and climate-related constraints, the National Office of Electricity and Drinking Water (ONEE) is preparing a new cycle of large-scale investments aimed at modernizing drinking water production infrastructure and improving its long-term resilience.

At the center of this new phase are advanced discussions with the European Bank for Reconstruction and Development (EBRD) over a major financing package dedicated to upgrading existing water production facilities. The negotiations build on a long-standing partnership between the two institutions and are aligned with ONEE’s 2025–2030 equipment and investment plan, which places water security among its strategic priorities.

The future program focuses on improving the technical and operational performance of drinking water production units nationwide. Planned interventions include upgrading aging infrastructure, optimizing system yields, and reducing energy consumption across production sites. These measures are designed to address two interlinked challenges: ensuring continuity of water supply in a context of structural scarcity and strengthening the industrial robustness of a public service increasingly exposed to climatic volatility.

Water stress has become a defining constraint for Morocco’s development model. Declining groundwater levels, degradation of surface water resources, and a sustained rise in domestic, agricultural, and industrial demand have placed unprecedented pressure on existing systems. Climate change has further amplified these pressures by increasing the frequency and intensity of droughts. In response, ONEE is finalizing a national strategy focused on protecting and preserving water resources. This strategy is based on a detailed assessment of local vulnerabilities and will be supported by a targeted action plan adapted to regional specificities, with the objective of ensuring the long-term security of drinking water supply.

The discussions with the EBRD reflect the financial dimension of this broader strategic shift. Since 2013, cooperation between ONEE and the Bank has resulted in the mobilization of approximately $560 million in financing for projects spanning electricity, drinking water, and wastewater treatment. Over time, this partnership has evolved beyond traditional project loans to include more innovative financial instruments linked to sustainability and performance objectives.

The most significant operation to date was concluded in June 2025, when ONEE secured a $324 million sustainability-linked loan. This financing was designed to reinforce the Office’s financial resilience while supporting the transition of Morocco’s energy system toward lower carbon intensity. The structure of the loan links financing conditions to the achievement of predefined sustainability targets, marking a first for the energy sector in both the Middle East and North Africa region and the African continent.

Beyond this landmark operation, the partnership has supported several major infrastructure programs. In the electricity sector, financing of around $65 million contributed to the nationwide rural electrification program, helping expand access to electricity in areas that had long remained underserved. Additional funding of nearly $38 million was later allocated to the rehabilitation of hydroelectric power plants, reinforcing national generation capacity while supporting a more diversified and sustainable energy mix.

Water infrastructure has also been a longstanding pillar of cooperation. As early as 2014, the EBRD committed approximately $70 million to a project combining drinking water supply expansion with a performance improvement program for ONEE’s water division. Now approaching completion, this program has delivered results considered robust in terms of operational reliability, efficiency, and service quality. These outcomes have laid the groundwork for the new financing currently under negotiation, which is expected to further strengthen Morocco’s capacity to manage water scarcity.

The forthcoming investment cycle is therefore not limited to infrastructure upgrades alone. It reflects a broader shift toward integrated water management, where efficiency, energy performance, and climate resilience are treated as interdependent objectives. By modernizing production systems and improving resource efficiency, the new program aims to reduce operational vulnerabilities while preserving limited water reserves.

As a founding member of the EBRD, Morocco has been a beneficiary of the Bank’s financing since 2012. To date, total EBRD investments in the country amount to nearly $6.4 billion, spread across 125 projects covering infrastructure, energy, water, and other strategic sectors. This sustained financial engagement underscores the central role of international development financing in supporting Morocco’s long-term infrastructure transformation.

With negotiations ongoing, the anticipated new partnership on drinking water is expected to play a key role in reinforcing national water security. In a context where climate risks are becoming structural rather than cyclical, the success of this investment phase will be closely tied to Morocco’s broader ability to adapt its public services to a more constrained and uncertain environmental future.