Kingdom
Decarbonisation: How ESCOs Could Accelerate Implementation
Still relatively little-known in Morocco, energy service companies (ESCOs) are struggling to establish themselves despite their potential in energy efficiency and decarbonisation. Faced with a recently introduced regulatory framework, financing challenges, and limited understanding of the model, two experts analyse the barriers and the levers for accelerating their deployment.
Energy Service Companies (ESCOs), long marginal, are beginning to emerge in Morocco. Last March, the Ministry of Energy Transition granted Elexpert the second authorisation of its kind, under Decree No. 2-24-153 on energy efficiency.“This ESCO certification is a real validation of our expertise and our ability to deliver energy efficiency projects according to recognised standards. It enhances our credibility with clients and financial partners and opens up opportunities in both public and private markets that require this type of label,” says its CEO, Fouad El Kohen.This decision by Leila Benali’s department comes nearly a year after the first authorisation was granted to Innovative Energy & Efficiency (INEE), a subsidiary of the CDG Group, marking the effective implementation of a long-awaited regulatory framework.The move is accompanied by a restructuring of the sector under the supervision of the National Agency for the Strategic Management of State Shareholdings (ANGSPE), with the liquidation, in July 2025, of the Energy Engineering Company (SIE).
A link in the decarbonisation chain
In practical terms, ESCOs support companies in reducing their energy consumption by taking charge not only of diagnostics but also implementation—and sometimes financing—of solutions. “ESCOs operate end-to-end: they conduct audits, propose tailored solutions, implement them, and ensure maintenance,” explains El Kohen.Their business model is based on energy performance contracts (EPCs), which tie their remuneration to the savings achieved. This model helps limit financial risk for the client while guaranteeing measurable results, monitored through measurement and verification (M&V) tools.Unlike consulting firms, they can invest on behalf of the client. “Beyond conducting energy audits, they offer to finance equipment aimed at saving energy and are paid through a share of the savings generated,” notes energy expert Amine Bennouna.In addition to reducing energy costs, these companies contribute to process optimisation and decarbonisation, notably through the integration of renewable energy.“ESCOs are also becoming a key anchor point for decarbonisation by integrating renewable energy and intelligent energy management—for example, combining efficiency with on-site solar sources and storage or charge–discharge strategies to smooth peak demand (peak shaving),” El Kohen adds.
A model still struggling to take off
Despite these advantages, the model is slow to scale. “The law and mechanisms have only existed for around two years,” he notes. As a result, both companies and banks are still in a learning phase.“This is the case everywhere in the world,” Bennouna adds, pointing to the complexity of the concept and the lack of understanding. “It’s difficult to talk about the need for energy efficiency, whereas companies clearly need to reduce their energy bills,” he emphasises.
Financing: the main obstacle
The main barrier remains financing. Under EPCs, ESCOs carry the investment, which complicates bank involvement. “Any bank—not just Moroccan ones—is naturally reluctant to finance assets located with third parties,” the expert explains. This often forces ESCOs to rely on their own funds, limiting their capacity to act.For El Kohen, this caution also stems from uncertainty regarding realised savings and risk allocation. “In practice, appropriate financing products, relevant guarantees, and traceability of results are needed to reassure lenders,” he recommends.
Levers to accelerate development
Several ways to accelerate their development are identified: standardising contracts, introducing guarantee mechanisms, training, and partnerships.El Kohen stresses the need for concrete pilot projects to demonstrate the model’s viability, as well as the creation of a local ecosystem through training and partnerships between sector players, manufacturers, and installers.Smart public lighting and energy management projects in buildings offer, in his view, key opportunities. Bennouna favours a more targeted approach, suggesting “niche client segments suited to the specific expertise of each ESCO.”
A promising tool for decarbonisation
Despite the challenges, ESCOs appear to be a promising lever for reducing energy costs and supporting the national decarbonisation strategy. The key challenge remains creating the conditions for true scale-up.
Decarbonisation: INEE’s first contract in ports
On 20 June 2025, Innovative Energy & Efficiency (INEE) signed an agreement with the National Ports Agency (ANP) to accelerate the decarbonisation of port infrastructure.INEE is responsible for the design, financing, and operation of energy efficiency projects. The partnership is structured around four areas: development of renewable energy, optimisation and digitalisation of electricity networks, deployment of sustainable mobility solutions, and training in energy-related professions.Priority is given to high-activity ports, including Casablanca, Jorf Lasfar, and Agadir, before gradually expanding to Safi, M’Diq, Tan-Tan, Laâyoune, Dakhla, Boujdour, and Tarfaya. The goal is to support ANP’s sustainable development strategy.
