African Development Bank Approves $800 M for Morocco Wind & Solar Initiatives
African Development Bank Approves $800 M for Morocco Wind & Solar Initiatives

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 ·
What's Next
Trending Today
Noam Chomsky Has 'Never Seen Anything Like This'
Chris Hedges · 10,818 views today · Noam Chomsky is America’s greatest intellectual. His massive body of work, which includes nearly 100 books, has for decades deflated and exposed the lies of the power elite...
Donald Trump Is the Mirror and Hillary Clinton Is the Mask
Chris Agnos · 7,767 views today · Disclaimer: I do not support Donald Trump or Hillary Clinton for president. I think the scope of the political debate is far too narrow for the kinds of actions that need to...
Gil Scott-Heron Deconstructs Colonialism and Black History in His Own Unique Style
3 min · 3,911 views today · His-Story: I was wondering about our yesterdays, and starting searching through the rubble and to say the very least, somebody went to a hell of a lot of trouble to make sure...
Your Lifestyle Has Already Been Designed (The Real Reason For The Forty-Hour Workweek)
David Cain · 3,637 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...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 2,442 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
Mark Corske's Engines of Domination (2014)
60 min · 2,047 views today · Political power -- armed central authority, with states and war -- is it part of human nature? Is it necessary for human communities? Or is it a tool that ruling elites use to...
HyperNormalisation (2016)
161 min · 1,566 views today · We live in a time of great uncertainty and confusion. Events keep happening that seem inexplicable and out of control. Donald Trump, Brexit, the War in Syria, the endless...
Donald and Hobbes Is Genius
Various · 1,529 views today · Some clever folk have been replacing precocious 6-year-old Calvin, from the Calvin and Hobbes comic strips, with Donald Trump and the results are, well, take a look...
What Makes Call-Out Culture So Toxic
Asam Ahmad · 1,317 views today · Call-out culture refers to the tendency among progressives, radicals, activists, and community organizers to publicly name instances or patterns of oppressive behaviour and...
10 Quotes From an Oglala Lakota Chief That Will Make You Question Everything About Our Society
Wisdom Pills · 1,086 views today · Luther Standing Bear was an Oglala Lakota Sioux Chief who, among a few rare others such as Charles Eastman, Black Elk and Gertrude Bonnin occupied the rift between the way of...
The White Man in That Photo
Riccardo Gazzaniga · 1,030 views today · Sometimes photographs deceive. Take this one, for example. It represents John Carlos and Tommie Smith’s rebellious gesture the day they won medals for the 200 meters at the...
Anarchists - What We Stand For
unknown · 974 views today · Anarchism : The word “anarchy” comes from Greek and means “no rulers”. As a political philosophy, anarchism is based on the idea that organization does not require rulers—that...
For Those Who Don't Want to Vote for the Lesser of Two Evils
Peter White · 884 views today · Ranked-choice voting is catching on, and Maine might become the first state to help citizens vote for candidates they actually want.
John Lennon's "Imagine," Made Into a Comic Strip
John Lennon. Art by Pablo Stanley · 776 views today · This is easily the best comic strip ever made.  Pabl
Planet Earth II Could Be Best Nature Doc Ever Made
3 min · 629 views today · 10 years ago Planet Earth changed our view of the world. Now we take you closer than ever before. This is life in all its wonder. This is Planet Earth II. A decade ago, the...
Lessons in the Calais Jungle: Teaching Life Stories and Learning About Humanity
Aura Lounasmaa · 428 views today · I am part of a team of academics teaching a course to residents in the Calais Jungle, a camp for migrants and refugees outside the French city. Life Stories in the Jungle has...
Schooling the World (2010)
66 min · 398 views today · If you wanted to change an ancient culture in a generation, how would you do it? You would change the way it educates its children. The U.S. Government knew this in the 19th...
The Top 100 Documentaries We Can Use to Change the World
Films For Action · 364 views today · A more beautiful, just and sustainable world is possible. Take this library and use it to inspire global change!
The Untold History of Palestine & Israel
22 min · 340 views today · Previewing Abby Martin’s on-the-ground investigation in Palestine, The Empire Files looks at the long history of Zionist colonization, expansion and expulsion of Palestine’s...
Eckhart Tolle: Your Facebook Ego, That's Not Who You Are
2 min · 291 views today · “Identification with thoughts and the emotions that go with those thoughts creates a false mind-made sense of self, conditioned by the past: the "little me" and its story. This...
Load More
Like us on Facebook?
African Development Bank Approves $800 M for Morocco Wind & Solar Initiatives