Morocco invests $280 million in battery plant

From the newsletter

CDG Group, Morocco's largest public investor, yesterday signed an MoU with Chinese giant Gotion High-tech to step up domestic EV battery production. CDG will invest $280 million in the first phase of a Gotion battery plant in Morocco. A few weeks after Gotion signed another Moroccan partnership for a wind power plant construction.

• The first phase of the project will focus on power batteries, energy storage batteries, and cathode and anode materials.

• The total investment in the battery factory is estimated to be $1.3 billion, with a potential increase to $6.5 billion.

More details

• It is not common in Africa for mega projects to receive local funding. Most funding comes from outside, especially in the mobility sector. 

• Few African investors dare to jump in. In mobility, we’ve recently seen action from Africa50 (Morocco), Untapped Global (Kenya), Novastar Ventures (Kenya), and CFAO Kenya Limited. But they are dwarfed by investments from foreign companies.

• CDG's investment in Morocco is unique. The huge amount of money is a rare feat.

• The project is expected to create more than 2,000 local jobs and support Morocco's goal of generating 50% of its electricity from clean energy sources by 2030.

• Gotion will bring its advanced production lines, technology and management expertise to Morocco.

• Morocco plans to tap into growing EV demand, particularly in Europe, and the Gotion battery gigafactory is a step closer to realising that goal.

• The plant will be the first in Africa and will solidify Morocco's position as the undisputed leader in vehicle manufacturing in Africa and the main exporter to Europe globally, ahead of China and Japan.

• Morocco is betting on its proximity to its target markets, free trade agreements, and existing automotive sector to attract more investments.

Our take

• Local investment is sorely missing in African mobility. Yet, this could be changing, even if slowly. The Moroccan investment speaks volumes.

• Africa is endowed with resources and a growing consumer market. Prioritising local investment can unlock this potential. More jobs could be created and government revenue may well increase. Plus, foreign investors often repatriate profits to their home countries, limiting the long-term benefits for Africa.

• For this to become a reality at scale, more transparency is needed in government. Investors seek policy stability, which is lacking in many African countries. Morocco has been politically stable, boosting investor confidence. The rest of Africa needs to follow suit.