Interview: Omar Belmamoun
How would you assess the most pressing challenges facing energy investments in the South?
OMAR BELMAMOUN: Some of the region’s challenges are in fact opportunities for energy development. The southern region of Morocco presents opportunities with regards to its solar and wind energy potential. For example, the capacity-to-production ratio for solar is 1 MW for 2.5 GWh per year, and this can be improved further with thermo-solar technology. The ratio for wind is a similarly promising 1 MW for 3.3 GWh per year. There is already much potential to develop high value-added agriculture – 600 ha at present – that is already over using the limited drinking water aquifers of the region.
While desalination is the only means to preserve the latter, it requires a competitively sustainable energy supply that we stand ready to provide. The government’s political will to bring the South to the same levels of growth as the rest of Morocco is likely to open up several opportunities in the near future.
Our fund’s interest in energy expands to all of Africa, and we have dedicated our Morocco-based portfolio company, Platinum Power, to develop, finance, construct and operate several power plants in the region.
What kind of role can renewable sources play in meeting Morocco’s rising demand for energy?
BELMAMOUN: Renewable energy could play an important role in Morocco’s energy mix, in particular hydro, wind or solar, and help to address increasing demand for electricity. However, most renewable energy sources are known to be intermittent, except for hydropower, which offers dispatchable electricity, much needed by both residential and industrial end-users in Morocco. In a competitive global market, a reliable and sustainable energy supply, as well as low costs, are key for industrial investors in choosing between different locations.
We are therefore fortunate to be in a country with a strategic vision for its industrial development and that is implementing reforms to allow its industrial players to gain access to the most competitive energy.
What is the scope for private equity (PE) activity?
BELMAMOUN: PE funds represent an additional source of financing for the Moroccan economy, offering close support to entrepreneurs and companies. For example, the process of infrastructure development in Morocco requires a high level of flexibility and fast decision making that other investment institutions, such as pension funds or multilateral banks, cannot afford due to their lengthy approval processes. PE can come into play to fill that need. While Brookstone Partners is committed to supporting renewable projects in Morocco, including the southern region, it is also examining other opportunities offered by the new PPP regulatory framework. This is particularly relevant in areas such as the use of technology in agriculture, fisheries, mining and tourism, as well as with regards to environmental, transportation and logistical infrastructure.
What recommendations would you share with any investor who is actively considering the region?
BELMAMOUN: While this is not limited to the southern region, I would urge potential investors to avoid coming in with pre-conceived ideas and to listen to the market’s needs before developing an investment strategy. Brookstone Dakhla Hospitality, which will develop an eco-friendly luxury resort in the lagoon of Dakhla, demonstrates our ability to be responsive to the market. Indeed, Dakhla has been described by more than one publication as the world’s year-round best kite surf spot. The crucial element of success is to involve a range of stakeholders in any planned project and to ensure the project’s compliance with the local environmental and legal framework. For example, we are very satisfied with the support we have found from local government organisations such as the Wilaya of Oued Eddahab-Lagouira and the Agency for the Social and Economic Development of the Southern Provinces. Last but not least, a responsible investment is more than just a marketing label. It yields social and economic benefits when implemented at all levels of a project.
