The United States is providing its first federal backing for a green energy project in Western Sahara, supporting a proposed $4.5 billion green ammonia facility in the disputed Moroccan-controlled territory.

The U.S. Trade and Development Agency (USTDA) has awarded $5.7 million to ORNX—an international consortium comprising U.S.-based Ortus Climate Mitigation LLC and the Spanish-German joint venture Acciona-Nordex Green Hydrogen—to finance an early-stage feasibility study for the project, Bloomberg reported.

Although the grant represents only a small fraction of the project's total cost, it marks a significant milestone in U.S. support for renewable energy investment in the territory and signals Washington's continued engagement following its recognition of Morocco's sovereignty claim over Western Sahara in 2020.

Western Sahara has remained one of Africa's longest-running territorial disputes since Morocco annexed the former Spanish colony in 1975. While Morocco administers most of the territory, the United Nations still classifies it as a non-self-governing territory, with the Algeria-backed Polisario Front continuing to seek independence.

The latest U.S. funding carries political significance beyond its financial value. It reinforces closer U.S.-Morocco ties that have deepened since the Trump administration recognised Moroccan control of Western Sahara as part of a broader diplomatic agreement linked to Morocco's normalisation of relations with Israel.

The decision also comes amid a wave of investment into the territory, including ports, tourism infrastructure and renewable energy projects.

Once completed, the Laayoune-based facility is expected to produce approximately 560,000 metric tons of green ammonia annually, using renewable energy to manufacture one of agriculture's most important industrial inputs. Engineering firm KBR Inc. will lead the Front-End Engineering Design (FEED) study alongside GE Vernova, Terabase, and Electric Hydrogen.

The project aligns with Morocco's ambition to become a global leader in green hydrogen and ammonia production by leveraging its abundant solar and wind resources.

Morocco has been ramping up investments in renewable energy, including large-scale solar, wind and green hydrogen projects, as it seeks to position itself as a leading clean energy exporter to Europe and other global markets. State-owned phosphate giant OCP Group, one of the world's largest fertiliser producers, plans to use domestically produced green ammonia as a renewable feedstock for low-carbon fertiliser production.

The company is also preparing to begin operations at a new fertiliser export port in Laayoune, underscoring Morocco's strategy of combining renewable energy with its dominant position in the global phosphate industry.