Power Purchasing Agreement Provides Momentum to Reach National Goal
Morocco’s leadership in renewable energy received a strong jolt of support this past week with the announcement of a finalist for 850MW of wind-power projects to be awarded to an international consortium headed by NAREVA, a Moroccan energy company.
Upon signing of the contract, still to be finalized, the consortium will develop, design, finance, construct, operate and maintain five wind projects: a 150MW facility in Midelt, 100MW in Tanger and 200MW in Jbel Lahdid in northern Morocco, and 300MW at Tiskrad and 100MW in Boujdour in the south.
The preferred bidder status award was made by ONEE, the Moroccan Office National de l’Electricité et de l’Eau Potable, to the consortium which includes Nareva as well as Enel Green Power (EGP) and Siemens Wind Power. Total investment is estimated at around $1.1 billion.
According to EGP CEO Francesco Venturini, “We are leveraging on our knowledge and expertise, in collaboration with our partners, to contribute to Morocco’s ambitious energy plan that has renewables at its core. The country is an example in North Africa of reliability and transparency in supporting the development of renewable technologies.”
The overall project requires creating two financial vehicles to guarantee the deliverables at a reasonable cost to Morocco. EGP and Nareva will create limited liability companies called “special purpose vehicles” for each of the five sites to insulate the project from any financial issues of the parent company.
In addition, the project was conceived under the Power Purchasing Agreement (PPA) passed into law in 2013 that enables companies to pursue power projects based on an agreed purchase price by the government, amounting to a sovereign guarantee for projects that are financially sound and efficiently operated. The agreement with ONEE runs for 20 years on the facilities that will come online between 2016 and 2020.
These target dates fit within Morocco’s current goal of 42% power from renewables by 2020, which was projected by King Mohammed VI at COP21 to be 52% by 2030.
Separately, Siemens agreed to build a rotor blade factory at an investment of more than $110 million that will result in up to 700 jobs in a factory to be located in Tanger. The facility will serve African, Middle Eastern, and European wind markets upon completion in spring 2017.
Markus Tacke, CEO of Siemens Wind Power and Renewables Division, noted “We invest where we see strong business opportunities. Morocco is the perfect location from which to serve the growing onshore wind power markets in Africa, the Middle East and Europe. The economy is strong, the political climate is stable, and Morocco has a young, skilled and motivated workforce. These factors make Tangier the ideal site for this new state-of-the-art factory.”
Siemens has had a permanent presence in Morocco since 1956 and has already been involved in several major renewable energy projects, including the 300-MW Tarfaya wind farm project.
With additional investment opportunities identified in hydropower, biomass, and even nuclear power, Morocco is well on its way to meet and possibly exceed its energy goals.