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Slow year for Maghreb power and water awards

7 July 2025

 

The Maghreb region has experienced a slow 2025 in terms of power and water project contract awards. Hopes for the year now rely on a strong second half if the sector is to match the performance of previous years.

As of early July, the total value of power project contract awards had reached $663m, according to regional projects tracker MEED Projects. This means that by the end of the year, the market is expected to fall significantly short of the peaks of $3.8bn in 2023 and $4.5bn in 2024. 

Libya’s recovery was a major driver in 2023, accounting for $2.9bn of the total for that year, while Algeria contributed $430m and Morocco $210m. There are no recorded power contract awards for Algeria or Libya in 2025. Morocco and Tunisia contributed $353m and $310m, respectively. 

The total value of contract awards for water projects has also declined significantly. For the first six months of 2025, the total reached $189m, which is tracking behind the $815m of water project contract awards recorded in 2024.

Both 2025 and 2024 are far behind the peak of $3.6bn registered in 2022, when Algeria alone accounted for $1.8bn of contract awards, followed closely by Morocco with $1.6bn. 

For upcoming power and water contract awards, there are over $6bn of contracts in the bid or prequalification stage that are expected to be awarded within the next year. 

In the water sector, Libya leads with $210m of soon-to-be-awarded contracts, followed closely by Tunisia at $260m. In the power sector, Morocco stands out with an impressive projected contract value of $5.3bn, while in Tunisia, there are $300m of upcoming power contract awards.

Xlinks disappointment

There have been some notable project developments in the power and water sectors across the Maghreb region over the past year. Most recently, at the end of June, the UK government withdrew its support for the Xlinks Morocco-UK power project.

The UK Department for Energy Security and Net Zero decided not to consider a contract for difference for this large-scale renewable energy initiative, which aimed to deliver 3,600MW of renewable energy from Morocco to the UK via a 4,000-kilometre high-voltage direct current cable system.

Sir Dave Lewis, chair of Xlinks, expressed disappointment, emphasising the project’s potential to significantly lower wholesale electricity prices in the UK.

Power progress

Other projects in Morocco are proceeding. The Ministry of Energy Transition & Sustainable Development has issued an invitation for expressions of interest for a major liquefied natural gas (LNG) infrastructure project at Nador West Med Port. This project includes an LNG import terminal, pipelines and a gas power station with a capacity of approximately 1,200MW. The project aims to enhance Morocco’s energy security and diversify its energy sources.

Additionally, Morocco’s National Office for Electricity and Drinking Water has invited firms to submit expressions of interest for contracts to build three gas-fired power stations with a total capacity of between 300MW and 450MW. These plants are expected to be commissioned by the summer of 2026, further contributing to the country’s energy infrastructure.

Water advancements

In the water sector, Algeria has inaugurated the El-Tarf desalination plant, which has a production capacity of 300,000 cubic metres a day. This facility is part of Algeria’s broader desalination programme, which aims to address water scarcity issues exacerbated by climate change. The Algerian government has allocated $3bn for the second phase of its desalination capacity expansion, with plans to build six new plants by 2030.

Morocco is also advancing its water infrastructure, with Veolia undertaking the detailed design for a new seawater reverse osmosis plant near Rabat. This facility is expected to treat up to 822,000 cubic metres of seawater daily and will cater to regions particularly affected by drought.

Policy focus

For policy, governments have been manoeuvring as they respond to the global challenge of climate change. 

Morocco is progressing with its green hydrogen initiatives, which are closely linked to its water projects. The country has set ambitious targets to produce 52% of its energy from clean sources by 2030, with plans to develop large-scale green hydrogen projects. These projects will require significant water resources for electrolysis, further intertwining the power and water sectors.

Morocco also aims to increase its renewable capacity to 10,000MW by 2030, with a focus on solar, wind and hydroelectric power. Despite the recent Xlinks setback, the country is also exploring opportunities for exporting electricity to Europe, which could significantly enhance its energy market.

Algeria is pursuing other avenues in its quest to diversify its energy sources. In April, Algerian Minister of Energy, Mines and Renewable Energies, Mohamed Arkab, met with Wang Yongge, president of the China National Nuclear Corporation (CNNC), in Algiers. The two reviewed the ongoing cooperation between Algeria’s Commissariat for Atomic Energy (Comena) and CNNC, focusing on the peaceful use of nuclear energy, its medical applications and prospects for future development.

The Algerian government also plans to invest heavily in desalination projects to ensure a sustainable water supply, with desalinated water expected to account for 60% of drinking water by 2030.

Main image: Noor electric power station close to Ouarzazate, Morocco
 

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Colin Foreman

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