Casablanca – Morocco has secured $265 million in financing from the World Bank Group to support the development of the Ifahsa pumped-storage hydropower project in northern Morocco, a major investment expected to strengthen the country’s electricity network, increase renewable energy integration, and support its long-term energy transition strategy.

Approved by the World Bank’s Board of Executive Directors, the financing package is intended to help build one of Africa’s largest pumped-storage energy facilities. The project, which will be implemented by Morocco’s National Office of Electricity and Drinking Water (ONEE) near the city of Chefchaouen, is designed to provide large-scale electricity storage capable of balancing fluctuations in renewable energy production while improving the reliability of the national grid.

The investment comes as Morocco continues expanding its renewable energy capacity to meet rising electricity demand, reduce dependence on imported fossil fuels, and strengthen energy security. Energy storage has become an increasingly important component of this strategy, as larger volumes of electricity generated from solar and wind farms require flexible infrastructure capable of storing excess production and releasing it when demand rises.

Unlike conventional power plants, the Ifahsa facility will primarily serve as a storage system rather than a source of new electricity generation. The project will rely on pumped-storage hydropower technology, which uses surplus electricity produced during periods of strong solar radiation or high wind generation to pump water into an upper reservoir. When electricity demand increases or renewable generation declines, the stored water will be released through turbines to produce electricity and feed it back into the national grid.

This operating model effectively allows the station to function as a large-scale rechargeable battery, helping stabilize electricity supplies while maximizing the use of renewable energy resources.

The project will have an installed capacity of 300 megawatts and is expected to enable Morocco to integrate at least 1 gigawatt of additional solar and wind generation into the national electricity network. According to the World Bank, the improved storage capacity is also expected to encourage approximately $1 billion in private investment in renewable energy and related infrastructure.

Project documentation indicates that the facility will provide around 690 gigawatt-hours of storage capacity annually and will be connected to Morocco’s 400-kilovolt transmission network, strengthening electricity supply and improving grid stability, particularly in the northern regions of the country.

The environmental impact of the project is expected to be significant. Once operational, the storage facility is projected to replace approximately 3 terawatt-hours of electricity currently generated from fossil fuels each year. This would reduce annual carbon dioxide emissions by an estimated 1.7 million metric tons, contributing to Morocco’s climate objectives and broader efforts to develop a lower-carbon economy.

Beyond its contribution to emissions reductions, the project is also expected to deliver economic benefits. During the construction phase, approximately 820 direct jobs are expected to be created each year, while additional employment opportunities are likely to emerge through investments in renewable energy projects and associated industries.

The World Bank has also indicated that increased access to cleaner electricity will strengthen the competitiveness of Moroccan businesses, particularly manufacturers serving international markets where demand for products produced using low-carbon energy sources and sustainable supply chains continues to grow.

The financing package combines several sources of funding. It includes a loan from the International Bank for Reconstruction and Development (IBRD), concessional financing provided through the Clean Technology Fund, and grant funding from the Livable Planet Fund. The African Development Bank is also participating in financing the project, reflecting continued cooperation among international development institutions in supporting Morocco’s energy transition.

According to World Bank project documents, the total investment cost of the Ifahsa development is estimated at approximately $450 million. Earlier financing plans allocated $210 million from the IBRD, $30 million from the Clean Technology Fund, and $210 million from the African Development Bank. The latest financing package increases the World Bank Group’s overall contribution to $265 million through the addition of grant resources and complementary financing mechanisms.

The project arrives as Morocco’s electricity demand continues to expand. Official figures show that national electricity consumption has increased by around 4% annually since 2010, reaching approximately 45.7 terawatt-hours in 2024. This sustained growth has intensified the need for flexible storage systems capable of balancing intermittent renewable generation while maintaining reliable electricity supplies.

Morocco has made substantial progress in expanding renewable energy over the past decade. By the end of 2024, installed renewable generating capacity had reached approximately 5,337 megawatts, representing about 45% of the country’s total installed electricity capacity. However, renewable sources accounted for only around 25% of total electricity generation, highlighting the importance of storage technologies that can better align renewable production with periods of peak demand.

Wind energy currently represents the largest share of Morocco’s renewable generating capacity, followed by hydropower and solar energy. National energy plans call for the addition of approximately 12,445 megawatts of new renewable capacity by 2030, increasing renewables to around 64% of installed generating capacity and nearly 59% of electricity production.

Within this strategy, pumped-storage hydropower is expected to play a central role. Morocco aims to develop approximately 1,000 megawatts of pumped-storage capacity by 2030 through projects including Ifahsa, the Abdelmoumen facility near Agadir, and the Menzel pumped-storage project currently under development.

Despite the rapid expansion of renewable energy, fossil fuels remain the dominant source of electricity generation. In 2025, coal accounted for approximately 61.5% of electricity production, while natural gas represented 10.9% and oil contributed 3.6%, leaving fossil fuels responsible for roughly 76% of total electricity generation. Wind energy supplied around 16%, solar energy 5.8%, hydropower 2%, and biomass approximately 0.1%.

Against this backdrop, the Ifahsa project is expected to become a critical component of Morocco’s evolving electricity system by improving grid flexibility, reducing reliance on fossil fuel generation during peak demand periods, and supporting the continued expansion of renewable energy.

The approval also adds to a broader series of World Bank operations supporting Morocco’s development agenda. In recent months, the institution has approved financing for programs focused on green growth, digital transformation, climate resilience, and social protection, underscoring continued international support for the country’s infrastructure modernization and sustainable economic development priorities.

As Morocco advances its long-term energy transition, investments in electricity storage are increasingly viewed as essential to ensuring that the rapid growth of solar and wind power can be translated into a more reliable, resilient, and lower-carbon electricity system capable of meeting future demand while supporting economic competitiveness.