Morocco, Germany $30 billion subsea cable project snagged by governance row

Disagreements over governance and financial guarantees have stalled a $30 billion project to carry Moroccan solar and wind power to Germany through the world’s longest undersea electricity cable, according to four people familiar with the negotiations.

The venture, known as Sila Atlantik, plans to run twin high-voltage subsea cables across roughly 4,800 kilometers. The line would deliver up to 5 percent of Germany’s annual electricity needs, drawing power from 15 gigawatts of solar and wind installations planned in southern Morocco.

Morocco demands bi-directional power grid capabilities

European governments have sought similar cross-border connections to bolster energy grids and cut reliance on fossil fuels. Sila Atlantik, a German company set up for the venture, took shape after a similar proposal to supply power to Britain fell through last year.

Negotiations have hit a roadblock as Moroccan officials press for a formal treaty endorsed by Berlin to secure long-term backing from the German government, two Moroccan and two German sources said, speaking on condition of anonymity because they were not authorized to discuss the talks publicly.

Rabat also wants the infrastructure modified to allow power to move in both directions, rather than operating solely as an export link to Europe. “Technically it is feasible, but economically it would be more costly,” a German source said of a two-way connection.

Local land approvals have also stalled. Moroccan authorities previously pledged roughly 150,000 hectares (370,000 acres) in the southern Guelmim-Oued Noun region for the earlier British plan, but regional officials have not granted the same land rights to Sila Atlantik.

EU targets subsea renewable energy links

In a statement, Sila Atlantik declined to comment on specific talks, saying only that work is moving ahead in line with its technical, commercial, regulatory, and financial plan. “The project continues to assess the technical and regulatory options that will best support its long-term development,” the company said in an email.

Morocco’s energy ministry did not answer detailed questions about the stalled negotiations. In an emailed statement, the ministry said regional power sharing remains a central part of Morocco’s broader energy plan, pointing to ongoing efforts to build stronger connections with European neighbors.

Morocco currently operates the only existing power grid connection between Africa and Europe via Spain, an arrangement that helped Spanish operators stabilize their system during a major blackout last year.

Officials are planning a second line to Spain with 700 megawatts of capacity, while a proposed connection to Portugal could cost up to €735 million ($838 million), state utility documents show. Morocco and Portugal plan to pitch their subsea link under an European Union initiative aimed at directing up to €25 billion ($28.2 billion) into regional renewable energy networks.