African Development Bank Approves $800 M for Morocco Wind & Solar Initiatives
African Development Bank Approves $800 M for Morocco Wind & Solar Initiatives
By AFDB / afdb.org
Sep 10, 2012

Over the first half of 2012, the African Development Bank (AfDB) has been demonstrating its commitment to support the scaling up of renewable energy in Africa with the approval of US $800 million in loans to spur private investment in Morocco’s growing wind and solar markets. The Bank’s technical and financial support of Morocco’s plan to develop a concentrated solar power (CSP) plant at Ouarzazate and its Integrated Wind/Hydro and Rural Electrification Program is helping Morocco realize its goal of increasing installed renewable energy capacity to 42 per cent by 2020 and becoming a renewable energy industry leader.

“Morocco has emerged as an early leader in developing low carbon, sustainable energy on a large scale, and we are proud to support their drive. Lessons learned from these projects will inform efforts going forward in the country, region and around the world,” stated Hela Cheikhrouhou, Director of the AfDB’s Energy, Environment and Climate Change Department.

Banking on the sun

In May 2012, the AfDB approved a loan for €168 million from its own resources and a concessionary loan for US $100 million from the Clean Technology Fund (CTF), a Climate Investment Funds (CIF) program, to finance the first phase of the CSP plant at Ouarzazate. It aims to generate 120 to 160 MW in its first phase and 500MW at full capacity, making it the largest CSP plant in the world. The project is structured as a public private partnership (PPP) between the Moroccan Solar Energy Agency (MASEN) and a private partner. Estimated at €1.04 billion total cost, the project will be jointly financed by six other agencies including the World Bank, European Investment Bank, Agence Française de développement, German Development Bank (KfW), Neighbourhood Investment Facility (European Commission), as well as other Moroccan institutions.

Ouarzazate is the first project to be implemented under the ambitious CSP scale up program of the Middle East North Africa (MENA) region, which seeks to deploy about 1 GW of generation capacity through a series of CSP plants and associated transmission infrastructure stretching across Morocco, Algeria, Tunisia, Egypt and Jordan. Domestic energy access, economic growth and regional integration are the goals along with eventual exports to Europe.

Investing in the wind

One month later, in June 2012, the Bank made its largest project approval to date for 2012 with a loan for €359 million from its own resources and US $125 million from the CTF for Morocco’s Integrated Wind/Hydro and Rural Electrification Program. It aims to increase national wind power capacity by 1,070 MW and expand rural electrification to 79,436 households in 24 of Morocco’s most isolated and vulnerable districts. It is being implemented by Morocco’s public utility, Office National de l’Électricité (ONE), for a total project cost of US $2.16 billion.

The wind/hydro component of the project is designed to maximize production from wind, use excess wind energy to store water for the later production of hydroelectricity, and supply water to generate hydroelectricity during the dry season. The project will also support new transmission infrastructure and water storage facilities. Completion is envisioned for 2017.

Making renewables viable

While these projects’ potential is real, so are the high capital costs of CSP and wind technologies. Even after adjusting for fuel and operating and maintenance costs, a conventional supercritical coal-fired power plant still costs less and poses less commercial and performance risks and cost uncertainties.

The International Energy Agency emphasizes that “it is only through technology learning as a result of marketplace deployment that these costs are reduced and the product adapted to the market.” Concessional financing will help bring down these extra costs and establish cost and performance benchmarks for the broader deployment of the technologies by public and private providers in Morocco and throughout the MENA region.

“If a project is eligible for concessional finance, be it grants or loans, it indicates political support. That brings everyone on board and makes everyone more confident that the project will advance,” said Richard Claudet of the AfDB’s Private Sector Department during a lesson-sharing workshop for the MENA CSP scale up initiative co-organized by the AfDB and the World Bank on June 28.

Mrs. Cheikhrouhou added, “Financing like the Clean Technology Fund, which has a significant component that is grant-like, brings the economics and financial viability of projects closer to reality so implementation is feasible and government subsidies are less needed.”

Without AfDB and CTF funding, ONE’s financial capacity to launch the wind program would be significantly compromised and the program could be delayed or its scope reduced. ONE’s financial equilibrium would be made vulnerable by the higher cost of wind generation and the associated infrastructure, compared with the average cost of energy generated by ONE using conventional sources.

Structuring the Ouarzazate CSP plant as an independent power producer (IPP) is also beneficial from a cost perspective. A range of private and public financing can be considered and plant construction and operation can be further optimized by return considerations. However, an IPP requires robust, reliable contracts, in particular the power purchase agreement (PPA).

Morocco’s stable political and regulatory environment, as well as ongoing experience with IPPs, go a long way to inspire investor confidence.

Morocco’s wind and solar initiatives are concrete examples of green growth opportunities in Africa. Speaking at the UN Conference on Sustainable Development (Rio+20), Mrs. Cheikhrouhou explained, “Green growth is about finding the pathway where you achieve your ambitions in terms of social and economic development, but doing it in a way that is environmentally friendly; not only to be a global agent, but also to leave for future generations economies that are more robust and more able to produce jobs and resist climatic risks and disasters.”

0.0 ·
0
Trending Today
Globalization Makes No Sense
Chris Agnos · 17,425 views today · When I lived in San Francisco, I often would marvel at the movement of goods through the ports across the bay in Oakland. Full container ships would enter the bay one after...
How Norway Avoided Becoming a Fascist State
George Lakey · 9,607 views today · Instead of falling to the Nazi party, Norway broke through to a social democracy. Their history shows us polarization is nothing to despair over.
Stunning Small Homes Form Part of a Communal Compound for Best Friends
Lighter Side · 8,813 views today · If you’re lucky enough to have longtime friends even as an adult, then you know probably already know how much it means to be able to spend time together. Maybe you even have a...
Proof of Evolution That You Can Find on Your Body
4 min · 7,545 views today · Vestigial structures are evolution's leftovers — body parts that, through inheritance, have outlived the context in which they arose. Some of the most delightful reminders of...
The Most Astounding Fact about the Universe
3 min · 5,811 views today · This is Neil Degrasse Tyson's response when asked to describe the most astounding fact about the universe. Background music is the cinematic orchestra - To build a home.
Where the Term "Redneck" Came From
15 min · 5,412 views today · If you don't know this story, you'll never look at the word the same again.  This is just a window into the sometimes shocking, subversive and untold history of the United...
The Fire Within
Words by Sophie Scholl - Illustrations by Gavin Aung Than · 4,951 views today · Sophie Scholl (1921-1943) was a German activist who is famous for speaking out against the Nazi regime. Scholl was a member of a protest group called The White Rose, which...
The London Anarchist Group Squatting Mansions to Fight Homelessness
6 min · 4,691 views today · London squatting activists ANAL (Autonomous Nation of Anarchist Libertarians) are squatting empty multi-million pound buildings and opening them up to the homeless.
Without Saying a Word This 6 Minute Clip From Samsara Will Make You Speechless
6 min · 3,722 views today · Can you put this video into words? It's a clip from the phenomenal documentary Samsara, directed by Ron Fricke, who also made Baraka.  If you're interested in watching...
The Foiled Bomb Plot in Kansas That Didn't Make Trump's Terror List
5 min · 3,550 views today · When a plot by a pro-white militia to bomb a Somali mosque in Kansas was foiled by the FBI last October, the aborted conspiracy received little national coverage - nor did it...
Voices of Standing Rock
49 min · 2,506 views today · Short stories told by water protectors at Standing Rock, North Dakota. Part 1 - Introduction: Since mid-August 2016, thousands have set up camp near the Standing Rock Sioux...
Redneck Revolt Presents: A Message to the Patriot Movement
6 min · 2,310 views today · Over the past few weeks, Redneck Revolt has been communicating with a former member of a III% Patriot Militia based out of Ohio. Peter made contact with our organization after...
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 2,306 views today · Well I’m in the working world again. I’ve found myself a well-paying gig in the engineering industry, and life finally feels like it’s returning to normal after my nine months...
To Change Everything, Start Everywhere
8 min · 2,074 views today · To Change Everything, Start Everywhere! The case for complete self-determination—a guide for the furious, the curious, and the pure of heart. To Change Everything: An...
From Sanctuary City to Liberated City
Frank Lara · 1,572 views today · In just one week, with several strokes of a pen, Trump unleashed upon the working class in the U.S. an attack not seen in decades. From his attack on the flawed Affordable Care...
10 Words Every Girl Should Learn
Soraya Chemaly · 1,550 views today · "Stop interrupting me."  "I just said that." "No explanation needed." In fifth grade, I won the school courtesy prize. In other words, I won an award for being polite. My...
Transition From Caterpillar to Butterfly as Analogy for Social Change
4 min · 1,477 views today · An exceprt from Crossroads: Labor Pains of a New Worldview in which Dr. Bruce Lipton talks about the fractal nature of reality and compares the current global awakening and the...
The Lessons of Standing Rock
Michael Emero · 1,384 views today · In mid-November of 2016, I was a Water Protector at Standing Rock. At first my goal was to play investigative journalist; documenting then writing about every detail for my...
How a Lack of Touch Is Destroying Men
Mark Green · 1,159 views today · Why Men Need More Platonic Touch in their Lives
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 920 views today · This is easily the best comic strip ever made.  Pabl
Load More
What's Next
Like us on Facebook?
African Development Bank Approves $800 M for Morocco Wind & Solar Initiatives