The U.S. Trade and Development Agency said on Tuesday it had agreed to fund early-stage studies for a project aimed at producing ammonia in Western Sahara, marking the first U.S. government financing for a private-sector project in the disputed territory.
The long-frozen conflict pits Morocco, which considers the territory its own, against the Algeria-backed Polisario Front, which seeks an independent state there.
Washington recognised Morocco's sovereignty over the territory in 2020 and encouraged its private sector to invest there.
The grant agreement was signed in Laayoune, Western Sahara's largest city, with project developer ORNX to finance a $5.7 million early engineering study for the ammonia project, the U.S. agency and ORNX said in a statement.
The project is designed to produce about 560,000 metric tons of ammonia annually using hydrogen generated from renewable energy, according to ORNX.
The funding was announced days after Morocco named a $1 billion highway in Western Sahara after U.S. President Donald Trump.
"America is in the Moroccan Sahara," U.S. Ambassador to Rabat Duke Buchan said at the signing ceremony.
