Morocco has announced a new solar programme with the first phase totalling 25 megawatts, but the small size could deter some large companies from investing.
“The problem is that in terms of capacity, it’s only of interest for some bidders,” said Boris Martor, the head of the Africa division at Eversheds. The UK law firm advises its clients on renewable energy projects throughout the region.
Mr Martor noted that feasibility-study, development and negotiation costs were the same regardless of scale. The first phase of the three-phase Tafilalet solar photovoltaic project will total 25MW, a small size compared to other solar projects in Morocco totalling more than 100MW each. “[Developers] have to find financing for a project that might be smaller, but in terms of development, would cost the same as a larger project,” he said.
The World Bank and the International Bank for Reconstruction and Development will provide financing, but Mr Martor said that at this stage it was still unclear if the organisations would finance the first phase in its entirety, expected to total US$150 million.
The Saudi Arabian solar powerhouse Acwa Power is known for going after large projects. Acwa is already involved in Morocco’s solar sector for three phases of the Noor concentrated solar power (CSP) project totalling 510MW with another 160MW for the Ouarzazate CSP plan. Still, Acwa is one larger player that might not be discouraged by the smaller size of the new project.
Paddy Padmanathan, Acwa’s chief executive, said that the company was very confident in Morocco as an investment destination. “I’m not convinced larger companies will stay away because Morocco is proving itself as a reliable renewable energy market that is intent on building serious volume of renewable capacity,” he said. “All serious players who have an appetite for this part of the world and sector will surely want to participate.”
Abu Dhabi-based Masdar has repeatedly attempted to gain a share of the solar pie in the North African country, but to no avail. The company’s chief operating officer, Mohamed Al Ramahi, said that while he would not confirm if Masdar was looking into this particular project, the company was always interested in Morocco. “The kingdom is a country we are always interested in, and we’re always looking for opportunities,” he said.
When asked if Masdar would do anything different for future tenders than in the past, Mr Al Ramahi said that as always the company would be competitive. “We could be successful next time – it’s a competition.”
The national utility, Moroccan National Office for Electricity and Water, will be accepting the bids for the project. Eversheds said the utility had not made any further announcements on the regional locations of the following two phases, but the programme’s second phase would have eight photovalic plants, and phase three was likely to have two to four plants.
The minimum total combined power for these plants would be 300MW.
Mr Martor said it would be important for any interested party to find local partners. “There are some Moroccan groups that are diversifying into the energy sector, and it’s important for any international bidder to partner [with local companies],” he said.
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