The United States, on July 28, 2026, moved further in bolstering its backing for the economic development of Morocco in Western Sahara after a federal agency approved the financing of preliminary studies for a large green ammonia project as part of the green hydrogen drive in Morocco, which marks the first time the U.S. government has offered financing for a private-sector investment in the territory, which is under dispute.
Apparently, the US Trade and Development Agency – USTDA entered into a $5.7 million grant agreement with ORNX, the US developer, to support front-end engineering and design studies pertaining to a Laayoune project to produce around 560,000 metric tons of green ammonia per year from hydrogen generated via renewable energy.
The project, which is projected to require an overall investment of approximately $4.5 billion, is among the largest clean-energy projects that is planned for Western Sahara and forms part of the wider strategy of Morocco so as to become a world producer when it comes to green hydrogen and its derivatives.
It is well to be noted that the decades-long fight over Western Sahara involves Morocco, which sees the territory as an integral part of the kingdom, against the Polisario Front, which is Algeria-backed, which wants an independent state.
Washington recognized Morocco’s sovereignty across the territory in 2020 and has pushed American companies to make investments there since.
The deal on July 28, 2026, marks the very first time that a U.S. federal agency granted direct financial support for a private sector project in Western Sahara.
As part of the green hydrogen drive in Morocco, the signing of the grant agreement took place in Laayoune, which is the largest city in Western Sahara, at a ceremony that was attended by Duke Buchan, the US Ambassador to Morocco. Buchan said America is in the Moroccan Sahara.
The news came days after Morocco designated a new $1 billion motorway in Western Sahara after US President Donald Trump, in a sign of growing close relationships between Rabat and Washington.
KBR, the US engineering firm, will lead the engineering studies, which are due to begin later in 2026, with GE Vernova, Electric Hydrogen, and Terrabase participating.
Interestingly, the studies will look at the technical, engineering, environmental, and financial as well as commercial feasibility of the first stage of the project prior to the final investment decision being made, ORNX said.
The first phase will include over 2 gigawatts of wind and solar generation capacity backed up by battery storage systems, as well as 900 megawatts of electrolysers to generate green hydrogen along with a seawater desalination plant to support industrial processes.
The studies will also determine the ultimate industrial design of the project, energy infrastructure, and financing structure as well as a 25-year financial model.
The grant is a major milestone in the Laayoune green ammonia project, said ORNX chief executive, Peter Geish.
He added that the company would collaborate with USTDA, the US Embassy in Rabat, as well as its industrial partners to finalize project development and obtain the funding needed for construction.
As part of an agreement reached in February 2026 between the Moroccan government and an international consortium that includes ORNX, Ortus, Acciona from Spain, and Germany’s Nordex, the project will also see land in Laayoune allocated for development.
The investment follows expectations of strong growth when it comes to demand for green ammonia over the next decade, fueled by the decarbonization of fertilizer production and maritime transport as well as heavy industry.
Green ammonia is considered one of the most effective hydrogen carriers and may also be incorporated directly as low-carbon fuel along with fertilizer feedstock.