For years, much of the climate investment conversation has centred on the US and Europe. But if the US is becoming a less predictable home for long-term green capital, investors will increasingly look elsewhere for credible growth stories. In the Middle East and North Africa region, that may direct more attention not only to the Gulf, with its capital-rich transition plans, but also to a less obvious destination: parts of North Africa, and Morocco in particular.
MENA is not uniformly investable, nor is it moving in one direction. The region is marked by sharp differences in fiscal capacity, institutional strength and exposure to external shocks. But that is exactly why it deserves closer attention. The next phase of climate-aligned investment in MENA is unlikely to reward ambition alone but will favour countries combining renewable potential, industrial strategy, trade access and policy credibility. On that basis, Morocco stands out. At a workshop in Rabat on sustainability and trade in MENA, one point was clear. In this region, climate policy is no longer a narrow environmental agenda. It is increasingly tied to trade competitiveness, food security, logistics vulnerability and financing conditions. Climate and trade are now part of the same economic story and, for investors, that transforms what counts as a green opportunity.
Climate and trade pressures
MENA’s starting point is unusually difficult. It remains the most water-scarce region in the world, with food systems, fiscal pressures and social resilience all shaped by climate stress. Trade helps cushion some of the exposure by allowing countries to import staples and offset domestic production shortfalls. But trade also imports vulnerability, especially where food dependence, freight disruption and political sensitivity are closely linked. In this region, resilience is not separate from economic strategy but a core part of it.
For freight and connectivity, MENA sits on some of the world’s most important trade routes, which is a structural advantage until it becomes a source of fragility. The disruptions to the Red Sea and the Suez Canal, and the wider instability affecting the Strait of Hormuz, have shown how quickly geopolitical shocks can spill into shipping costs, inflation, energy markets and external balances. For investors, that raises an obvious question: where  is resilience being built in MENA?
Morocco offers the answer. It combines real climate stress, especially around water, with a credible attempt to position itself as a platform for greener industry and trade. Its appeal is about location, market access and industrial positioning. North Africa remains tightly linked to Europe and that matters because Europe is no longer simply a destination market. It is increasingly a regulator of competitiveness through sustainability standards, disclosure requirements and climate-linked trade measures such as the Carbon Border Adjustment Mechanism.
That shift creates pressure, but also opportunity. Countries integrated into European value chains now have stronger incentives to decarbonise production, improve energy systems and attract investment into lower-carbon manufacturing. In that sense, Morocco’s push into renewables and green hydrogen is not only about climate ambition. It is also about preserving and upgrading trade competitiveness in a world where access to the market is becoming more conditional on climate credibility. The scale of that ambition is already visible. In March 2025, Morocco approved green hydrogen projects worth around $32.5bn.
Morocco is different from many other green investment stories in the MENA region. The Gulf model is largely built around sovereign balance sheets, large-scale capital deployment and state-led diversification. Morocco  is more grounded in trade geography, export competitiveness and the effort to move up the value chain. It sits closer to Europe, is already embedded in manufacturing supply chains and is trying to convert that position into a broader industrial advantage as greener trade rules take shape.
Still, announced projects are not the same as investable ecosystems. The harder questions are much more practical. Can renewable power be delivered at competitive cost? Can grids, ports and industrial zones support new manufacturing clusters? Can domestic firms, especially small and medium-sized enterprises, meet the compliance, reporting and financing standards that greener trade increasingly requires?
The new divide in MENA
One of the clearer messages from the workshop in Rabat was that capital is not always the main constraint. In some cases, funding exists, but the real bottleneck lies in project preparation, policy coordination and the ability of firms to absorb investment productively. That is particularly relevant for transition finance. Investors may be interested in cleaner industry and infrastructure, but they will still look for delivery capacity, regulatory clarity and a pipeline of bankable projects.
That is why the most useful divide in MENA may no longer be oil versus non-oil but capacity versus exposure. Some economies are still largely managing vulnerability, whether through food insecurity, logistics shocks or external financing pressure. Others are trying to turn those pressures into a broader economic repositioning. Morocco appears to be among the latter and is one of the clearest examples of a country trying to use climate pressure, trade exposure and geography as the basis for strategic adjustment rather than passive vulnerability.
For investors looking beyond a more hostile US climate environment, MENA is becoming more attractive precisely because climate, trade and industrial policy are converging. The next winners in MENA will be the ones that can translate green ambition into industrial credibility. North Africa, led by Morocco, may be one of the first places where that is tested.
This article featured in the June 2026 edition of OMFIF’s Sustainable Policy Institute Journal.
Yara Aziz is Senior Economist at OMFIF.
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