Western Sahara talks revive green energy hopes

At the apparent urging of the US, long-delayed talks over the disputed territory of Western Sahara have been given new impetus, raising hopes for green energy investments in a region whose considerable economic potential has been limited by the unresolved conflict.

The US’s desire to reduce its contribution to UN peacekeeping projects – its funding of blue-helmets in Western Sahara runs to $18 million annually – coupled with growing international concerns over increased Islamist fundamentalism in the region, appear to have prompted a new round of diplomacy.

A major green energy player, Morocco lays claim to the troubled region and has been keen to exploit its wind and solar power resources, but a longstanding impasse between Rabat and Western Sahara’s secessionist rebels, the Polisario Front, over the territory has led to projects being shelved and raised questions about the future of existing ones.

But now some of the uncertainty that has dogged Morocco’s energy ambitions may be about to lift.  Planned UN-sponsored talks on a peaceful resolution of the territorial dispute were finally brokered last week in Geneva. The foreign ministers of Morocco, Algeria and Mauritania and representatives of Polisario, which claims to speak for the indigenous Sahrawi people, met for the first time since 2012, when discussions ended in a stalemate. 

A resolution to the conflict could provide the missing piece to Morocco’s green energy jigsaw. Rabat has overseen something of a renewable power revolution in recent years, but its failure to exploit fully Western Sahara’s potential has held it back. For the talks to succeed, it must be prepared to share any economic windfall with the indigenous Sahrawi population, which has long felt the financial implications of the standoff. 

The conflict has its roots in 1976, when Morocco and Mauritania annexed Western Sahara, which had been ruled by Spain for almost a hundred years.  A subsequent insurgency, which left thousands dead and displaced tens of thousands more, culminated in a truce brokered by the UN in 1991 and promises of a referendum on self-determination. Originally scheduled for the following year, the poll has yet to take place due to disagreements between the Moroccan government and the Polisario Front over who should be deemed eligible to vote.  

Western Sahara, which has a population of approximately 500,000 and its main town, Laayoune, located in the north close to the Moroccan border, is a sparsely-populated area mostly consisting of desert.  However, the territory is rich in phosphates, fisheries, and possibly offshore oil and gas fields, though efforts to exploit the latter have foundered due to the dispute.  Since the early 2000s, major Western firms such as Total and Glencore have consequently been forced to give up their oil and gas exploration pursuits in the region.  Other European companies, keen to maintain a neutral stance, have eschewed projects in Western Sahara altogether.

Green energy projects, which arguably have even greater potential, have experienced similar fates.  In 2009 the Moroccan government launched the Desertec Industrial Initiative alongside twelve European companies, including EON, Deutsche Bank and Siemens, as part of a €400 billion energy project aimed at supplying power to Europe using solar plants across the Sahara desert.  Desertec was rumoured to be considering investing in Western Sahara but withdrew for “reputational reasons” following pressure from NGOs.  Due to a variety of technical and geopolitical complications, by 2014 the number of initial industry partners that had signed up to Desertec had fallen to just three. 

Also in 2009, work began on a major wind-farm project funded by a Moroccan renewable energy company called AM Wind in the Western Saharan city of Dakhla – one of the most promising renewable energy regions in the world.  The project has been hampered by a blockade imposed by the region’s self-proclaimed authorities, the Sahrawi Arab Democratic Republic, whose leaders claim the rights to the land in question and argue that the original licence was awarded illegally.  Sahrawi activists, and particularly organisations such as Western Sahara Resource Watch (WSRW), have been campaigning against companies working in tandem with the Moroccan government on land they believe is being unlawfully occupied.

These obstacles have inevitably dampened investor interest in the region, yet foreign businesses are still prepared to explore opportunities. In June, Soluna Technologies Ltd, a New York-based blockchain computing company, acquired AM Wind with funding from US private equity firm Brookstone Partners. 

Although a senior WSRW employee claimed that any agreement between Brookstone and the Moroccan government was “null and void”, Soluna has sought to win over the activists by diverting a small portion of its revenue to community schools and providing jobs to locals. It is unclear whether the proposal will work, but more broadly there is no doubt that offering the region an economic dividend from green energy could prove to be key in the UN-sponsored peace talks.  

The push for renewed negotiations came about in August when Trump administration officials put pressure on the UN to help find a solution to the wider land dispute, threatening to reduce its funding for peacekeepers stationed in the region. Washington has already indicated that it plans to cut its contribution to $8 million, which appears to be in line with Trump’s broader foreign policy goals of reducing US contributions to countries and regions which do not, in his eyes, provide much in return.

The two sides in the conflict have made little progress over the past 27 years. The Moroccan government proposed turning Western Sahara into an autonomous region within Morocco, with Polisario unwilling to budge on their demand for self-determination. But Horst Koehler, the UN envoy for Western Sahara, believes that the conflict can be resolved peacefully, announcing last week that all parties involved in the talks had agreed to hold further roundtable discussions in the first quarter of 2019. 

Unlike previous rounds of diplomacy, participants are acutely aware that they need to deliver a breakthrough as there are clear consequences if they fail to do so. With UN peacekeeping funds stretched, the UN may struggle to support the current blue-helmet deployment in event of the US cutting its contribution. That risks leaving the region vulnerable to renewed hostilities between Morocco and the Polisario, which could kill off any hopes of a green energy bonanza – a major loss for both sides.

Oliver Radway is an analyst at Alaco, a London-based business intelligence consultancy.