Case No. 4: General rural electrification programme (PERG)

Access to energy is a government priority which has never wavered. The general rural electrification programme (PERG) launched in the 1990s and described below has led to significant quantitative and qualitative outcomes.

Such advances have been achieved in a context where Moroccan agriculture remains an energy-intensive sector compared with the developed countries, particularly France, Italy and Spain, where the agricultural sector represents an average of 3 per cent of final energy consumption with shares sometimes approaching zero, as in the case of Germany, where agriculture consumes only 1.1 per cent of its total energy (Eurostat, 2009).¹²

Moroccan agriculture, however, represents 18.7 per cent¹³ of the final energy balance of the country, that is to say, 2 204 million tonnes of oil equivalent (TOE). This consumption is dominated by fossil fuels, such as diesel oil and petrol (57 per cent), butane and propane (28 per cent) and, in last place, electricity, which supplies only 15 per cent of energy requirements in the agricultural sector.

The energy consumption of the agricultural sector grew by 17 per cent between 2007 and 2010, that is to say, a rise of 6 per cent per annum only two years after the launch of the Green Morocco Programme. The rate continues to be alarming, especially as the guidelines of the new agricultural strategy make provision for an increase of 53 per cent in mechanization, 350 per cent in localized irrigation and 78 per cent in the use of fertilizers. Consequently, agricultural energy requirements are likely to increase and add to the burden of the national energy bill, which stood at DH 19 million at the end of March 2011.

12 Source: http://www.massolia.com/energie-2/mise-a-niveau-de-lagriculture-marocaine-quelles-pratiques-energetiques/.

13 Ministry of Energy, Mines, Water and the Environment – Department of Energy.

40 One of the factors affecting the performance of the agricultural sector is access to energy. Aware of this issue, the public authorities are accelerating the reform of energy regulation and especially the legislative texts enabling decentralized production.¹⁴

Presentation of the general rural electrification programme (PERG)

Concept and objectives

Launched in 1995, PERG was a response to the growing isolation of the rural world.

This programme was launched alongside two other flagship programmes: the integrated programme for the collective supply of drinking water to rural populations (PAGER), designed to increase the rate of access to drinking in the rural environment and the national programme for rural roads (PNRR), designed to improve the people’s level of access to roads.

Expected outcomes

Before the programme was launched, not more than 18 per cent of the rural population was connected to the power grid. The programme aimed to achieve an electrification rate close to 100 per cent by 2010. The electrification rate stood at 97.4 per cent in 2012.

Figure 12

Evolution of the electrification rate

Source: Ministry of Energy, Mines, Water and the Environment, Department of Energy.

Implementation process

The PERG master plan is based on the principle of regional balance and least cost per household, with the aim of allowing the maximum number of rural households to benefit from electrification for a specific budget. An analysis of the scattered nature of dwellings is also taken into consideration. PERG gives priority to the villages with the lowest average cost of electrification per household and gradually moves on to the villages with a higher average cost.

Financing for PERG was initially based on an average electrification cost of DH 10,000 per household, consequently necessitating contributions from the local authorities (20 per cent), from the recipient households (25 per cent) and from ONEP (the remainder).

14Law 13-09.

41 The contributions payable by the local authorities (DH 2, 085) and the recipient households (DH 2,500) could be pre-financed by the national department for water and electricity (ONEE, formerly ONEP) with repayment scheduled over five years for the local authorities (DH 500 per household and per annum for five years) and seven years for the recipients (DH 40 per household per month for seven years). The contributions of the local authorities and the recipient households were kept at their initial level despite the increase in the threshold of eligibility, which rose from DH 10, 000 for the first two tranches (PERG I and II) to DH 14, 000 for the third tranche, and to DH 20, 000 then DH 27, 000 for the two phases of the last tranche (PERG IV).

Impacts

In addition to supplying widespread access to energy, PERG had some other positive impacts including in particular:

 Emergence of new economic income-generating activities and small industries;

 Increased school enrolment rate;

 Deceleration of the rural exodus;

 Improvement of' living conditions through equipping homes with domestic appliances;

 Decreased overall spending on lighting by replacing traditional methods.

Decentralized rural electrification mainly concerns the villages characterized by dwellings or scattered groups of dwellings for which the cost of connection to the interconnected grid is prohibitive.

Potential techniques include the photovoltaic systems, micro-hydroelectric power stations, generators and hybrid systems.

As a result, PERG has also contributed to the emergence of the photovoltaic sector.

Sustainability and replicability

According to many experts, programmes of the PERG, PNRR or PAGER type would struggle to obtain the necessary political or financial support today. However, these are models of sustainable programmes which were launched towards the end of the period of structural adjustment, consequently in a context of extreme budgetary rigour.

It would be interesting to assess the ex-post spinoffs of these programmes, using the method of total cost, taking into account all the negative externalities, but particularly the numerous positive externalities. Such an exercise would help to legitimize embarking on comparable actions – with a timescale of more than 15 years – with significant financial costs.

These programmes clearly demonstrate that it is time to break with the traditional economic and financial indicators: contribution to GDP, jobs created, internal rate of return of the project, etc.

42 5.5 Case No. 5: Solar plan

Energy efficiency and renewable energies at the heart of the energy strategy

The continued bullish trend in the price of the oil barrel, combined with prospects of the growth of the country automatically entailing increased energy needs, has led to a worsening energy bill. Morocco is faced with an additional problem: in fact, with an energy dependency rate of 96 per cent, the annual bill rose to 11 per cent of GDP in 2011, that is to say, 52.6 per cent of exports, thereby making a significant contribution to the worsening balance of payments and adversely affecting the competitiveness of the production sector.

Figure 13

Evolution of the energy bill in % of GDP

Source: Ministry of Finance – Economic and Financial Report 2013.

The national energy strategy is therefore designed to develop energy efficiency as well as renewable energies. The goal is to increase the share of renewable energies to 42 per cent of the energy mix by 2020:

 The wind power plan provides for the installation of 2,000 megawatts (MW) in order to produce 6,600 GWh per annum, making it possible to prevent the emission of 5.6 million tonnes of CO2 per annum and save 1.5 million TOE.

 At the end of 2009, the Government created the Moroccan agency for solar energy (MASEN), tasked with implementing its solar plan. It is envisaged that the production of 4 500 GWh per annum will produce installed power of 2,000 MW, enabling a saving of 1 million TOE and preventing the emission of 3.7 million tonnes of CO2 per annum.

 Hydroelectric power is expected to represent 14 per cent of installed power compared with 24 per cent in 2008.

The national strategy was supported by the enactment of Law 13-09 on renewable energies and of Law 47-09 on energy efficiency.

43 Presentation of the solar plan

Concept and objectives

The Moroccan solar energy plan is designed to put in place a capacity of 2,000 MW by 2020. Five sites have been chosen for the launch of the project, which comes under the framework of the energy strategy: Ouarzazate, Ain Beni Mathar, Foum Al Oued, Boujdour and Sebkhat Tah.

The project will be completed towards the end of 2019 and the first power station is scheduled to be commissioned in 2015. Through the development of solar energy potential the project will contribute to the reduction of energy dependency and the conservation of the environment through limiting greenhouse gas emissions and will also help to fight against climate change.

Expected outcomes

By 2020, installed renewable electric power will represent 42 per cent of energy supplies, and 14 per cent will be of solar origin.

Currently, the first tranche of the Ouarzazate solar station is still under construction:

the Noor 1 project using concentrated solar power technology and developing 150 MW.

Calls to tender have been issued for Noor 2 and Noor 3, of 200 MW and 100 MW respectively and the shortlist of candidates has been announced. The goal of 500 MW by 2015 initially fixed seems to be in jeopardy. It seems that only Noor 1 is likely to be operational by 2015.

The completion of the solar plan should enable savings of 1 million TOE and prevent the emission of 3.7 million tonnes of CO2 per annum.

Principal implementation measures

At the institutional level, the following provisions have been made for the roll-out of the solar plan:

 Creation of MASEN, the agency tasked with implementing the solar plan, in March 2010;

 Creation of the national agency for the development of renewable energies replacing the centre for the development of renewable energies in 2010, responsible for supporting the development of renewable energy and energy efficiency;

 Creation of the Energy Investment Company (SIE) in February 2010, a public limited company, which acts as a co-developer, investor and financial lever for Morocco’s energy programmes.

Impacts

In addition to the goals of mitigation, reduction of energy dependency or job creation, the solar plan as it has been conceived should give a significant boost to the various solar

44 sectors, regardless of the technologies used. The Government has set itself industrial integration goals; for the Noor 1 project, integration would exceed 30 per cent.

In addition, the creation of IRESEN (solar energy and new energies research institute) and SIE demonstrates a desire to strengthen not only research and innovation in this sector but also largely independent research on the organization and financial structuring of the projects.

Naturally, these objectives depend on the dynamism of these bodies and the resources allocated to them.

Sustainability and replicability

The viability of the solar plan rests principally on the capacity of the private partners to ensure the construction, repair and maintenance of the installations and equipment to be built in the framework of the programme.

A maintenance plan will be prepared each year and updated every month by the Solar Project Company (SPS). It will be submitted to MASEN for information throughout the life of the electricity purchase agreement.

Furthermore, government support for the development of the programme is guaranteed throughout the implementation of the Moroccan solar plan of 2000 MW. The Government has made a commitment to ensure the financial stability of the programme and consequently should cover the difference between the purchase price paid by MASEN to SPS and the ONEE selling price for electrical power produced. These provisions also constitute a guarantee of the project’s financial viability.

A programme like the solar plan requires substantial political and financial commitment on the part of the political authorities.

5.6 Case No. 6: National household waste management programme (PNDM)

Waste, an as yet underexploited reservoir of inclusive green growth

Economic development brings in its wake an increase in the volume and toxicity of the waste produced and Morocco is no exception to this phenomenon. Conscious of the threat posed by poor waste management to the environment, public health and the country’s image, Morocco has adopted a series of measures in an effort to make up lost ground.

Enhanced waste management was implemented through the enactment in 2006 of Law 28.00, which stipulates that certain types of waste are the responsibility of local communities (household and other similar kinds of waste), while others are the responsibility of their producers (dangerous, inert, special, medical, pharmaceutical and hospital waste). In addition to the polluter pays principle, the law established the creation of controlled landfills, modalities of waste management planning in each region and at the national level, the creation of a national dangerous waste management body, the establishment of a system to monitor and identify offences and a graduated system of financial penalties based on the gravity of offences.

45 The current situation is that the national master plan for dangerous waste management has been prepared; the regional master plans for the management of non-dangerous industrial and medical waste and inert agricultural waste were launched in 2013, as well as certain prefectural or regional master plans for the management of household or similar waste.

However, administrative and criminal penalties imposed in the case of failure to respect waste regulations are not being applied.

Presentation of the national household waste management programme (PNDM)

Concept and objectives

Prior to 2007, the household waste sector was beset by a number of problems which endangered the health of citizens and caused serious environmental problems. World Bank studies in 2003 assessed losses through environmental degradation as a result of poor management of household waste at 0.5 per cent of GDP, that is to say, almost DH 1.7 billion per annum.

The national household waste management programme was created in April 2007 in the framework of the partnership between the Ministry of Internal Affairs, as custodian of the local communities, and the Department of the Environment. This programme, as initially conceived, allowed 15 years to restore order to Morocco’s municipal waste management system. The programme was reviewed in 2008, in an effort to ensure better planning and adaptation of the goals in line with Morocco’s new commitments and its integration with the other MANE programmes. Its timeframe was extended to 2030, and its goals were set out as follows:

(i) To provide for the collection and cleaning of household waste to achieve a 90 per cent collection rate by 2020 and 100 per cent by 2030;

(ii) To conduct controlled dumping for household and similar waste for the benefit of all urban municipalities (100 per cent by 2020);

(iii) To rehabilitate existing unauthorized landfills after their closure (100 per cent by 2020);

(iv) To professionalize the waste collection and elimination sector in built-up areas, offering some economic interest for private operators and sustainable cost for the municipalities or municipal associations;

(v) To organize and develop the “waste sorting, recovery and recycling” sector to achieve a recovery rate of 20 per cent of waste by 2020, with pilot sorting activities at source;

(vi) To roll out the household and similar waste management master plans across all the provinces and prefectures of Morocco;

(vii) To train and create awareness among all those playing a part in waste management by the end of the programme.

Expected outcomes

The implementation schedule includes three phases: Phase 1: 2008–2012, start-up;

phase 2: 2013–2017, increased capacity; phase 3: 2018–2030, roll-out throughout the country.

In terms of projects to be executed, the programme makes provision for:

46 (i) Equipping 350 municipalities (or groups of municipalities) with their own

controlled landfill site;

(ii) Closing and rehabilitating 220 uncontrolled landfill sites;

(iii) Improving waste collection and cleaning services for 300 urban centres by outsourcing this service to professional operators: in 2008, the programme was revised to promote local partnerships for household and similar waste management and bring the waste collection rate up to 85 per cent by 2016, to 90 per cent by 2020, and finally to 100 per cent by 2030.

In addition, the programme makes provision for assistance to the provinces in preparing their provincial and prefectural waste management plans, as stipulated by law 28-00, and for the completion of a programme to raise awareness among the main stakeholders in the sector at the local level. A number of projects are being designed to improve waste sorting, recovery and recycling at source, which will make it possible to increase the level of recycling to 20 per cent by 2020.

Principal implementation measures

The interministerial framework established for the implementation of the programme consists of the national monitoring commission of the waste management programme (CN-PNDM), which includes the representatives of the Departments of Internal Affairs (Department of Water and Sanitation) and of the Environment (Department of Risk Monitoring and Prevention). CN-PNDM is chaired by the Department of the Environment and is supported by a management unit of the national household waste management programme which falls under the Division of the Environment and Sanitation within the Directorate for Local Communities. To provide CN-PNDM with regular monitoring of the activities of PNDM, the programme management unit (UGP) prepares a quarterly report recording the different activities completed and the problems encountered.

PNDM provides for the financing of investment projects to implement cleaning and collection systems in the amount of DH 26 billion; for the installation of controlled dumping in the amount of DH 5.4 billion; the rehabilitation of existing landfill sites in the amount of DH 2.28 billion; and the preparation of planning and technical expertise studies in the amount of DH 2.7 billion.

To finance their implementation, PNDM has stipulated that local communities must contribute DH 26.9 billion from their own resources (local taxes and share of VAT), with a State contribution of DH 3.25 billion. The remainder of the financing should come from a special levy to be put in place (DH 4.3 billion); from international cooperation (DH 1.5 billion); and from income from carbon credit sales made from controlled waste disposal projects under the clean development mechanism (DH 1 billion).

Impacts

A breakdown of degradation costs related to poor waste management shows the positive impacts that would result from fulfilment of the PNDM goals.

47 Table 5

Evaluation of environmental degradation costs caused by waste Source of financial sustainability, it provides for the continuation of State financial support to PNDM – Phase 2. Other measures in this context concern the establishment of the provisions of article 23 of Law 28-00 (levies on household and similar waste). Lastly, the programme makes provision for enhanced delegated management, notably through the clearance and prevention of arrears of payment. PNDM can be reproduced without great difficulty.

6. Executive summary and recommendations

6.1 What are the prerequisites for green and inclusive growth?

First of all, let us specify that the focus of the report is agriculture, energy and waste management, which offer valuable sources of green and inclusive growth.

In our study we have separated a production sector, agriculture, from a resource, energy. Because of its weight and impact, agriculture seemed like the most obvious choice in the production sector, just as energy was the obvious choice of resource because of the efforts made to create a credible alternative from renewable energies. Water could also have been considered, but it has been partly dealt with through agriculture, which is by far its greatest consumer. Consequently, by making this distinction, it has been possible to shed light on the inevitable interactions between the production sector, which maintains its goals of productivity, competitiveness and ultimately growth, and the resource, whose sole objective is its proper management at the best possible cost.

48 Waste management, which is starting up through PNDM, has also been highlighted, but its problems must be resolved swiftly to guarantee an optimal pace and achieve the expected outcomes, notably when it comes to recovery and recycling.

The selected examples, as well as the national framework for sustainable development, demonstrate clearly that the public authorities have a genuine desire to bring about change to the traditional approaches. Currently, the institutional and regulatory frameworks seem satisfactory, although some improvements could be made. It is nonetheless true that a more

The selected examples, as well as the national framework for sustainable development, demonstrate clearly that the public authorities have a genuine desire to bring about change to the traditional approaches. Currently, the institutional and regulatory frameworks seem satisfactory, although some improvements could be made. It is nonetheless true that a more