In Morocco, project companies are most commonly incorporated as simplified limited company (Sociétés par Actions Simplifiées (SAS)) or Joint Stock company (Sociétés à Responsabilité Limitée (SARL)), which offer flexible governance and shareholder arrangements. The SAS is now the preferred form for project SPVs, especially in joint ventures with foreign sponsors, as it allows tailored management, voting and economic rights through by-laws and shareholders’ agreements. Joint Stock companies are often used for smaller projects or holding structures with a limited number of investors. Limited companies (sociétés anonymes (SA)) are generally reserved for very large or more regulated projects, or where lenders or public authorities specifically require this form. Although Moroccan law permits broad foreign ownership, the choice between SAS, SARL and SA is mainly driven by governance flexibility, regulatory context and lender expectations.

Corporate governance in Moroccan project companies is governed by Law 17-95 on limited companies (SA) and Law 5-96 on other corporate forms, including SAS and SARL structures, which dominate project finance. These regimes define managerial powers, shareholder decision-making and approvals for major or related-party transactions.
SAS structures offer considerable contractual freedom, allowing governance to be extensively customised in the articles of association and shareholders’ agreements, whereas SARLs follow a more standardised statutory framework.
The SA is subject to a more formal and prescriptive regime, particularly when listed. Listed companies must comply with additional corporate governance recommendations from the Moroccan Capital Markets Authority, notably regarding board independence and specialised committees.

Statutory auditors are mandatory for all SAs and for SAS and SARL entities exceeding certain turnover thresholds. Moroccan companies apply the Moroccan General Chart of Accounts, though some groups also prepare consolidated or IFRS-based statements. Foreign investors must ensure that equity, shareholder loans and guarantees comply with corporate and tax rules, including thin-capitalisation and transfer-pricing principles, to maintain a bankable structure.

In Moroccan project financings, sponsor support typically includes completion guarantees, undertakings to inject additional equity or subordinated shareholder loans in case of cost overruns, in addition to the usual base equity commitments. Lenders rely heavily on these instruments to mitigate completion and performance risks. Sponsor support is structured so that senior lenders retain tight control over cash flows, with distribution lockups maintained until financial covenants are met and the project demonstrates a stable operating profile.

In parallel, Morocco has significantly strengthened State-backed support through the national Investment Charter, which establishes the general framework for public incentives and provides a contractual basis for State financial contributions to large scale projects. Investors may enter into an investment agreement with the State, granting access to substantial incentives, including a direct State financial contribution to eligible project costs (the main investment subsidy). This contribution may be increased through various premiums, including territorial and sectoral components, sustainability-linked elements, and a local-integration premium rewarding projects that create local content and value (for example through the use of local suppliers, local manufacturing and services, and the development of local value chains). Tailor-made incentive packages may be granted for strategic projects, such as major renewable complexes or desalination facilities.

In addition, public support may operate through concession frameworks, delegated management contracts for public utilities and sectoral regulations that provide administrative cooperation, change-in-law protection, tariff adjustment mechanisms and secured land access. Combined with the incentive regime, these elements materially enhance the overall bankability of Moroccan project finance structures.

In Moroccan project financings, the security package is typically comprehensive and centred on the assets and contractual rights of the project company, while also taking into account cost and efficiency considerations.
As a matter of principle, lenders will usually require a pledge over the shares of the project company, so that they can, if needed, take control of the SPV and organise a substitution of the sponsor.

The security package will also normally include pledges over the project bank accounts, in particular the collection accounts and the debt service reserve account, which give lenders strong oversight and, where appropriate, control over project cash flows.

Security interests are commonly taken over movable assets such as equipment and machinery and over receivables arising from the offtake agreement, concession or lease, EPC contract, O&M contract and insurance policies. Depending on the nature of the business carried out by the SPV, a pledge over its business assets may be added as a complementary layer of security.

Moroccan law also allows lenders to take mortgages over real estate and long-term land rights used by the project. However, the registration of mortgages at the Land Registry entails notarial and registration costs that are calculated on an ad valorem basis, and these costs can become prohibitive in large-scale financings. As a result, practitioners do not systematically rely on mortgages in all project financings and, in many cases, the security structure will prioritise a strong package of movable and contractual security, supported by robust direct agreements, rather than a heavy reliance on real estate mortgages. Where lenders require land security, the secured amount is usually reduced in order to reduce registration fees.

Direct agreements remain a key feature of Moroccan project finance practice and are widely considered essential to the bankability of a transaction. Lenders typically require direct agreements with the offtaker, the concession or delegating authority, the EPC contractor, the O&M provider and key suppliers. These agreements grant lenders step-in rights, information and remedy rights, consent to the creation of security over the relevant contracts and clear mechanisms to manage default, early termination and substitution of the project company. In concession or delegated management projects, the direct agreement with the public authority is particularly important to ensure continuity of service and preservation of the contractual and economic balance of the project in the event of lender intervention. Moroccan public entities are accustomed to entering into direct agreements and general project finance contractual standards are generally accepted.

The perfection of security interests in Morocco depends on the nature of the asset concerned and is primarily structured around two regimes: (i) the system applicable to movable security interests, which are perfected through registration in the National Register of Security over Movable Property (Registre National des Sûretés Mobilières – RNSM), and (ii) the land registration system applicable to mortgages which are registered with the Land Registry (Consevation Foncière).

As a general rule, security interests over movable assets and rights, including pledges over shares, must be registered in the RNSM to be fully effective and enforceable against third parties. Internal corporate formalities, such as recording the pledge in the share register, and the approval by the board of directors if the grantor is a société anonyme (SA) are also required.

Mortgages over real estate and long-term land rights operate under a separate regime. They are perfected through notarised deeds and registration with the Land Registry, which is constitutive of the mortgage and establishes its ranking.

The enforcement of security interests in Morocco depends on the nature of the security, the type of asset concerned and whether enforcement takes place before or after the opening of insolvency proceedings.

Outside insolvency, movable security interests governed by the regime introduced by Law 21-18 benefit from flexible enforcement mechanisms. Depending on the terms of the security agreement and compliance with statutory conditions, enforcement may take the form of a judicial sale, a private sale or, in certain cases, direct contractual appropriation by the secured creditor. Security can only be enforced upon a payment default or acceleration, not as a result of a performance default.

In the context of project finance, lenders generally seek to avoid value-destructive enforcement processes and will often favour a contractual appropriation route, such as the transfer of shares to a substitute sponsor or the exercise of step-in or substitution rights under the direct agreements, in order to preserve the continuity and operational value of the project.

Real estate security continues to follow a more traditional approach. Mortgages can only be enforced through judicial proceedings leading to a court-ordered sale, with the proceeds distributed to creditors according to their rank after deduction of privileged claims.

Once insolvency or restructuring proceedings are opened against the project company, individual enforcement actions are generally stayed. Creditors must declare their claims within statutory deadlines, and any enforcement of security is subject to the supervision of the insolvency court and the court-appointed administrators. Secured creditors preserve their preferential rights over the proceeds of the assets subject to their security, but the timing and method of realisation are governed by the insolvency process rather than by the creditor’s sole initiative. In liquidation, secured creditors are paid out of the proceeds of the sale of the secured assets in accordance with their ranking, subject to certain prior claims such as employees’ remuneration and some tax and social security claims which have a preferred rank over secured creditors by law.

Moroccan project financings are shaped not only by statutory rules on the creation and enforcement of security interests, but also by several key structural considerations. Any security granted by a project company or an affiliate must be justified by that entity’s corporate benefit; otherwise, management may incur liability and the enforceability of the security may be challenged in the case of upstream or cross-stream security interests granted within the same group of companies.

For assets owned or managed by public entities, or forming part of the public domain, such assets cannot, as a matter of public law, be freely mortgaged or pledged, and private operators may generally only obtain limited contractual rights of use. In this context, security packages typically rely on contractual mechanisms — such as assignments of contractual rights, step-in rights and direct agreements with the contracting authority, rather than on classic mortgages. In projects involving delegated management or concessions, the robustness and bankability of the underlying public contract, particularly its termination and compensation regime, are often more important to lenders than the existence of hard security over physical assets.

Syndicated financings usually involve the appointment of a security agent acting on behalf of all lenders. This structure is widely used in Morocco but requires careful drafting, especially in relation to parallel debt (where there are cross-border security interests), voting rights and intercreditor arrangements, to ensure that the security agent can validly hold and enforce the security in its own name for the benefit of the finance parties under Moroccan law.

Lenders financing projects in Morocco must take into account a wide range of risks, some of which are inherent to emerging markets and others that are specific to the Moroccan regulatory and economic environment. Force majeure risk is generally well recognised under Moroccan law and is typically supplemented contractually.

Political and regulatory risk, although mitigated by Morocco’s relative macroeconomic stability and long-term policy continuity, remains material in sectors where the State or public entities play a central role and where changes in regulation, interpretation or administrative practice can affect project economics. While Morocco has a significant positive track record in the energy and infrastructure sector, more innovative sectors such as hydrogen, mining and oil and gas will require a stricter political and regulatory assessment.

Currency convertibility and transfer risk is another essential consideration. While foreign investors and lenders benefit from a convertibility framework enabling repatriation of dividends and debt service, this protection depends on strict compliance with foreign exchange rules. Hedging solutions exist but remain limited to authorised banking channels, which may affect the management of long-term foreign currency exposures. The reimbursement of foreign-currency loans is permitted but must follow a strictly regulated framework.

Permitting and land-related risks are significant for large infrastructure and energy projects, especially those requiring environmental approvals, sectoral licences, grid connections, water rights or land conversion. Delays or complications in environmental impact assessments, land regularisation or engagement with local communities can materially affect the project timeline.

Generally, legal and regulatory risk must be carefully managed, as several key sectors are undergoing regulatory evolution and/or modernisation.

Governmental and regulatory consents required for project financings in Morocco depend on the sector, the nature of the activity and the location of the project. Large industrial, energy, mining, water, transport or environmental projects typically require a combination of environmental approvals, construction permits, operating licences, sectoral authorisations and, where applicable, concession or delegated management agreements with public authorities. These permits and authorisations must generally be obtained before the project reaches financial close or before the commencement of construction, and lenders will condition disbursements on evidence that all material consents have been duly secured and remain in force.

From a financing perspective, Moroccan law does not generally require that loan agreements or security documents be filed with or approved by public authorities for their validity.

However, certain security instruments must be registered to ensure enforceability and priority: movable security interests must be registered in the National Register of Security over Movable Property (RNSM), and real estate mortgages must be registered with the Land Registry through notarised deeds.

In practice, most contractual signatures, including those relating to financing documents are also be legalised before the local municipalities (communes), which consists of an administrative certification that the signatory has personally appeared and confirmed their identity and signature. This is not a legal requirement, but a widely enforced practice.

Foreign currency loans and equity contributions must be properly registered or notified to the Moroccan foreign exchange authorities to ensure that the investment qualifies for the convertibility regime, allowing future repatriation of dividends and debt service. Authorisations are also required for offshore accounts and to allow foreign lenders to transfer security enforcement proceeds.

For evidentiary purposes before Moroccan courts, agreements governed by foreign law or executed abroad must generally be notarised or apostilled, as applicable, and may also need to be produced in authenticated form accompanied by sworn translations into Arabic or French.

Foreign investors and lenders benefit from a convertibility framework that allows the repatriation of dividends, repayment of principal and payment of interest on foreign currency loans, provided that such operations are carried out in compliance with the foreign exchange regulations and the instructions of the Moroccan Foreign Exchange Office (Office des Changes). Compliance with these rules is therefore essential to ensure that future cash flows can be validly transferred abroad. Certain cross-border payments, including service fees or interest that do not fall within the standard convertibility framework, may be subject to limitations or prior authorisation, which must be taken into account when structuring the financing.

In the natural resources, mining and hydrocarbons sectors, royalties and surface fees apply under the relevant legislative frameworks and must be fully integrated into the project’s economic and financial model. The export of minerals, hydrocarbons or processed products is generally permitted but subject to customs, sectoral and foreign exchange compliance, with specific reporting requirements depending on the nature of the commodity.

Environmental, social and governance considerations are now a central component of project development and financing in Morocco. From an environmental standpoint, major projects are subject to environmental impact assessment requirements, and the granting of environmental permits is typically conditional upon the implementation of mitigation, management and monitoring measures throughout the life of the project. Industrial emissions, waste management, water use and land use are all regulated, and non-compliance may expose project companies to administrative sanctions, fines, suspension of activities and significant reputational damage.
On the social side, Moroccan Labour Law, social security obligations and occupational health and safety standards apply to project companies and their contractors.

Particular attention must be paid to working conditions, subcontracting practices and the impact of projects on local communities, especially where land acquisition, resettlement, restriction of land use or significant changes to the local environment are involved.

From a governance perspective, although formal ESG reporting obligations are more developed for listed companies and financial institutions, the influence of international lenders, development finance institutions and export credit agencies means that many project companies are contractually required to adhere to international ESG frameworks. In practice, this often translates into obligations to establish and maintain environmental and social management systems, carry out regular monitoring and reporting, implement formal grievance procedures, and adopt corrective action plans when non-compliances are identified.

Morocco enacted a dedicated legal framework for public-private partnerships (PPPs), which sets out the rules governing the selection of private partners, the allocation of risks, the contractual structure and the financial oversight of PPP projects. This framework is of general application and is not limited to a single industry sector.

In practice, PPP models are predominantly used in strategic sectors such as large-scale desalination and water production, transport and logistics infrastructure (including ports, roads and public transport systems), and energy projects.

PPPs were also explored in social infrastructure and urban development. The degree of uptake varies by sector and depends on policy priorities, the maturity of the regulatory environment and the ability of public entities to structure bankable projects.

Moroccan law recognises the validity of international arbitration agreements, and Morocco is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. As a result, arbitration clauses designating a foreign seat and reputable institutional rules are generally upheld by Moroccan courts, which will decline jurisdiction when faced with a valid agreement to arbitrate.

Foreign arbitral awards may be enforced in Morocco through an exequatur procedure before the competent court, which verifies compliance with procedural requirements and ensures that enforcement does not contravene Moroccan public order.

In contrast, foreign court judgments are not automatically enforceable in Morocco. They must also undergo an exequatur procedure, during which the Moroccan court verifies that the foreign court had proper jurisdiction under applicable conflict-of-jurisdiction rules, that the defendant benefited from due process, that the decision is final and enforceable in the state of origin, and that its enforcement would not violate Moroccan public order. This means that, while enforceability is possible, the process is more constrained and may involve a broader judicial review than that applicable to arbitral awards. Morocco is party to bilateral jurisdictional cooperation treaties with several countries, which may in some instances, add flexibility in the enforcement of judgements from those jurisdictions.

Overall, in the context of project finance transactions involving foreign lenders and international sponsors, arbitration is the preferred dispute resolution mechanism, as it offers a clearer and more predictable path to enforcement under Moroccan law. This is why, in practice, finance documents are often governed by foreign law with arbitration clauses providing for a foreign seat, while security documents are governed by Moroccan law to facilitate local enforcement and avoid conflicts regarding the nature and scope of secured rights.

Submission to a foreign jurisdiction is generally valid and enforceable under Moroccan law, provided that the clause is clearly drafted, freely agreed by the parties, and does not conflict with Moroccan public policy. Foreign court judgments issued under such clauses may be recognised and enforced in Morocco through the exequatur procedure established by Articles 430 et seq. of the Moroccan Civil Procedure Code, which requires the foreign judgment to meet basic criteria of regularity, finality, and compatibility with Moroccan public order.

Waivers of immunity are also effective, provided that the party does not benefit from inherent immunity under Moroccan law, or, where the party is a public entity, that the waiver is express, specific, and unequivocal.

In practice, however, the enforceability of a waiver may be limited by mandatory rules of Moroccan public law: certain categories of public property (such as assets belonging to the public domain or required for the performance of public services) remain immune from seizure regardless of any contractual waiver. As a result, while immunity waivers are recognised, their practical scope must be assessed in light of the nature of the contracting public entity and the assets in question.

Project finance activity in Morocco is expanding across multiple sectors, yet several structural issues continue to shape transaction dynamics. One of the most significant challenges relates to land and grid availability, particularly for renewable energy projects. While Morocco benefits from exceptional solar and wind resources, grid capacity is uneven across regions, and connection timelines can affect the viability or phasing of new developments. Land acquisition and land regularisation also remain complex, especially where projects interface with agricultural land or collective land.

In Morocco, “collective land” (terres collectives or terres soulaliyates) refers to land owned by tribal communities and administered under a special public-law regime; its use, transfer or leasing is subject to strict governmental supervision and cannot be freely sold or mortgaged, which adds an additional layer of complexity for project structuring and security packages.

Another recurring issue concerns the degree of standardisation and bankability of contractual frameworks in recently liberalised or evolving sectors. Corporate PPAs, self-production structures and desalination schemes are developing rapidly, but contractual practice is still maturing, and lenders increasingly require clearer risk allocation, more predictable tariff mechanisms and robust termination and compensation regimes. In concession-based or delegated management structures, maintaining a stable economic equilibrium —particularly in the face of inflationary pressures, technological changes or evolving regulatory interpretations—remains a central concern for lenders and sponsors.

Among emerging trends, Morocco is experiencing strong momentum in projects directly linked to the energy transition, including large-scale solar and wind projects, grid-connected and behind-the-meter battery storage, desalination, sustainable industrial platforms and early-stage green hydrogen initiatives. These projects often involve complex stakeholder ecosystems, multi-layered permitting and new technological or regulatory considerations, which require lenders to adapt their due diligence and risk analysis frameworks.

Another notable development is the increasing involvement of international and regional financial institutions, private credit funds and infrastructure investors, particularly in mid-sized projects that historically relied mainly on domestic bank financing.

There is also a noticeable drive for the public procurement of transport and hospitality infrastructure in the context the 2030 FIFA World Cup being co-hosted by Morocco, Spain and Portugal.

Morocco has undertaken an extensive legislative and regulatory transformation to support its energy transition and enhance long-term energy security. The cornerstone of private-sector participation in renewable energy generation remains Law 13-09, which opened the market to private producers and allows them, under defined conditions, to generate electricity from renewable sources and supply eligible consumers. Law 13-09 also provides the legal basis for third-party grid access and wheeling arrangements, although practical implementation requires coordination with the system operator and sectoral regulators.

More recently, Morocco adopted Law 82-21, which introduces a modern framework for self-production, allowing private operators to generate electricity for their own needs or for eligible consumers. However, several essential components of this new regime – including the technical, economic and procedural rules governing grid access and grid services – depend on implementing decrees that have not yet been published. As long as these decrees remain outstanding, self-production projects must be analysed with particular attention to regulatory uncertainty and potential changes in operational conditions.

In parallel, Law 83-21 has restructured electricity distribution through the creation of the Sociétés Régionales Multiservices (SRM). These regional public utilities are designed to gradually take over distribution and related services currently carried out by municipal régies and private delegated entities, with the objective of consolidating operations, improving service quality and supporting the long-term modernisation of the electricity sector. Although the law is fully in force, the transition to SRMs will roll out progressively, based on administrative decisions and sectoral coordination. Practical elements such as the phasing of asset and contract transfers, tariff alignment, operational coordination and continuity of obligations will evolve as the SRMs become operational. For projects that interface with distribution networks, this transitional phase is a material regulatory factor that lenders and sponsors must anticipate.

These sectoral frameworks operate alongside a broader institutional and investment regime. Law 47-18 on Regional Investment Centers (CRI) reorganised the investment promotion and authorisation process at regional level and created the Commission Régionale Unifiée d’Investissement (CRUI) as a one-stop collegiate body competent to decide on a wide range of investment-related authorisations, land allocation requests and opinions. In practice, the CRUI plays a key role in the implementation of the national Investment Charter and in the streamlining of administrative procedures for large industrial and energy projects, including those linked to the energy transition. The CRI/CRUI architecture is therefore an important interface for sponsors and lenders when mapping out the permitting route, sequencing conditions precedent and assessing administrative risk.

Tax considerations play a significant role in structuring project finance transactions in Morocco, both at the level of the project company and at the level of cross-border financing flows. Corporate income tax applies to Moroccan project companies on their worldwide income, with the applicable rate depending on the nature and scale of the activity. Large industrial and infrastructure projects may benefit from preferential tax regimes under the Investment Charter, including reduced corporate tax rates for an initial period, exemptions from import duties on certain equipment, and eligibility for investment incentives. These fiscal advantages can materially improve project economics and are often factored into the financial model that lenders rely upon.

Cross-border financing introduces additional layers of tax analysis. Interest paid to foreign lenders may be subject to Moroccan withholding tax unless an exemption applies under domestic law or a double taxation treaty. Many of Morocco’s tax treaties reduce the withholding rate on interest, but lenders and sponsors must ensure strict compliance with treaty qualification requirements, including beneficial ownership, residency certification and substance criteria.

Where a private credit fund, development finance institution or export credit agency is involved, the tax position may require additional analysis depending on the nature of the lender and the jurisdiction of establishment.
Transfer pricing rules also play a central role where the sponsor group provides shareholder loans, technical services, management support or other intragroup arrangements.

Moroccan tax authorities require that related-party transactions be conducted at arm’s length and supported by appropriate documentation. Inadequate substantiation may lead to adjustments, penalties or disallowance of deductions, which can affect debt service capacity and breach financial covenants.

Value-added tax (VAT) is another major consideration. While certain imported equipment or services may benefit from exemptions or deferrals for investment projects, VAT cash-flow mechanics must be carefully analysed, especially for projects with substantial construction costs or long development periods. It is common to include a VAT facility in major project financings.

Lastly, sponsors and lenders must pay attention to local tax obligations related to land, property and construction, including registration duties applicable to real estate transfers, leases or easements.

Project financing in Morocco traditionally relies on a combination of equity contributions from sponsors and long-term bank debt provided by Moroccan commercial banks.

In recent years, financing structures have diversified significantly. Development finance institutions (DFIs) such as the EBRD, IFC, AfDB and KfW have increased their presence, particularly in renewable energy, water, logistics and industrial decarbonisation projects. Export credit agencies (ECAs) also remain active where major equipment is sourced from their jurisdictions, supporting financing through direct loans, guarantees or insurance products. These institutions often anchor the financing structure, especially for large-scale renewables, desalination plants and complex industrial projects.

Alternative financing sources are progressively emerging. Private credit funds and infrastructure-focused investors are increasingly assessing Moroccan opportunities, particularly in mid-cap renewable energy, industrial infrastructure, logistics and energy-transition-aligned ventures. Their participation offers more flexible structures, such as mezzanine debt, unitranche facilities or structured equity, but requires robust governance, enhanced covenant packages and careful intercreditor arrangements with senior lenders.

Islamic finance, including ijara, istisnaa and murabaha-based structures, is legally available in Morocco and has been used in corporate finance, however, its use in project finance remains limited, though there are precedents and interest may grow as the market matures.

In the natural resources sector, streaming, royalty financing and offtake-linked structures exist as potential alternatives, particularly for mining projects, but their use in Morocco remains relatively modest compared to global markets. Sponsors must ensure that these mechanisms are compatible with Moroccan mining law, tax constraints and foreign exchange rules before integrating them into a financing structure. In particular, pre-export financings are uncommon and will require careful pre-export and corporate structuring if and when implemented on the market.

Project bonds, whether domestic or international, are theoretically possible and supported by Morocco’s capital markets regulation, but they remain rare in practice due to market depth constraints, rating considerations and the availability of long-tenor bank debt. Nonetheless, they are occasionally considered for refinancing once projects reach a stable operational profile.

Institutions such as the African Development Bank, the European Bank for Reconstruction and Development and the International Finance Corporation are frequently involved in energy, water, transport, industrial and social infrastructure projects. Their participation typically takes the form of long-term senior loans, sometimes combined with subordinated tranches, technical assistance or blended-finance features. These institutions also bring stringent environmental, social and governance standards, which are increasingly reflected in the due diligence, covenants and monitoring obligations imposed on project companies. For commercial lenders, the presence of a reputable multilateral or regional development bank is often perceived as a strong credit and signalling factor, helping to mobilise additional liquidity and extend maturities.

Export credit agencies also have a significant footprint in Moroccan project financings, particularly where major equipment or services are supplied from their home jurisdictions. Their support may take the form of buyer’s credits, supplier’s credits, guarantees or political and commercial risk insurance. In large power, desalination, industrial and transport projects, ECA-backed tranches often sit alongside commercial bank debt and DFI loans within a common intercreditor framework. The involvement of ECAs can improve pricing and tenor, mitigate political and transfer risks and facilitate access to international technology and contractors, thereby enhancing the overall bankability of a project.

Insurance plays a central role in Moroccan project financings, both as a risk mitigation tool and as a core component of the bankability package required by lenders. Project companies must comply with the general principles of Moroccan insurance law, which requires that insurance policies covering Moroccan risks be issued, or at least fronted, by insurers authorised to operate in Morocco. For large infrastructure, energy or industrial projects, local insurers frequently partner with international reinsurers to provide the necessary capacity, particularly for construction, operational and catastrophic risks.

These policies must be aligned with international project finance standards and made effective before the first disbursement of debt. Any gaps in coverage, exclusions or sub-limits are typically scrutinised by lenders during technical and insurance due diligence, and lenders require that policies include loss payee clauses, non-vitiation provisions and assignment rights in their favour.

For projects involving hazardous activities, water treatment, mining or large-scale energy production, enhanced environmental and civil liability coverage may be required, particularly where potential harm to third parties or natural resources could create significant financial and reputational exposure. Compliance with statutory insurance obligations, such as compulsory motor, workplace accident and certain environmental liabilities, is also crucial.

Lenders pay close attention to the robustness of the insurance programme, the creditworthiness of insurers, the reinsurer panel and the stability of coverage throughout the life of the project. In transactions involving international sponsors or contractors, direct agreements with insurers or brokers are sometimes used to improve transparency, ensure notice obligations and reinforce lenders’ control over changes to coverage.

Ultimately, a well-structured insurance regime is considered essential to maintaining the financial and operational resilience of Moroccan projects, and inadequate coverage can materially undermine bankability. As a result, insurance arrangements are closely integrated into the overall risk allocation framework and are subject to detailed lender review at both financial close and throughout the project’s life.

Moroccan law permits the use of foreign exchange and interest rate hedging instruments, but these transactions must be conducted through banks authorised by Bank Al-Maghrib and in strict compliance with the circulars and instructions of the Moroccan Foreign Exchange Office. As a result, hedging cannot be freely negotiated offshore between private parties without the involvement of an authorised Morocco-licensed intermediary.

In cross-border financings, hedging instruments typically take the form of interest rate swaps, cross-currency swaps or forward exchange contracts, entered into with local banks or with international banks operating through a Moroccan-authorised framework. Certain currency pairs or long-dated maturities may be less liquid in the Moroccan market, which can limit the range of products available or impact pricing.

From a project finance perspective, lenders generally require that hedging agreements be integrated into the overall security and intercreditor structure. Hedging banks often benefit from the same security package as senior lenders, or from specific protections under a hedging accession mechanism aligned with the intercreditor agreement.

Lastly, sponsors must be aware that, as a matter of Moroccan regulation, hedging must correspond to a genuine underlying exposure and cannot be used for speculative purposes. The documentation of the hedge, the reporting of the exposure and the consistency between the hedge profile and the debt profile are often reviewed by lenders’ advisers and, when relevant, by regulators. In practice, hedging in Morocco is feasible and commonly implemented in large project financings, but it requires early structuring, regulatory alignment and close coordination with the authorised banks providing the derivative instruments.