October 1, 2014 / 5:43 PM / in 3 years

Morocco gets $519 million World Bank loan for solar power project

RABAT (Reuters) - Morocco has secured a $519 million loan from the World Bank to partly finance two solar power plants with a combined capacity of up to 350 megawatts (MW), the second phase of the 500 MW Ouarzazate project, the bank said in a statement on Wednesday.

Results of tenders for construction of the two plants near the southern city of Ouarzazate, one of at least 200 MW and the other of at least 100 MW, are expected in the next few days, sources close to the deal said.

Moroccan Solar Energy Agency Masen said consortiums led by Spain’s Abengoa , GDF’s International Power and ACWA Power of Saudi Arabia had been pre-selected for the 200 MW (Noor II) tender.

The three groups are also pre-qualified for the 100 MW (Noor III) tender, along with another consortium led by Electricite de France .

Morocco is spending heavily to subsidize power production. It currently imports power from Spain, with demand growing by around 7 percent year. 

Banking sources have told Reuters the cost to build the two plants is estimated at 1.7 billion euros ($2.1 billion).

The World Bank is providing $400 million directly, while its Clean Technology Fund (CTF) will grant $119 million.

German state-owned bank KFW [KFW.UL] would be the largest lender for the two plants as it has granted Morocco 654 million euros ($824 million). The African Development Bank (AfDB), the European Commission and European Investment Bank are financing the remaining amount.

The authority has chosen parabolic mirror technology for the 200 MW concentrated solar plant at an estimated cost of 1 billion euros, while the 100 MW plant, expected to cost 700 million euros, will be built as a solar power tower.

Saudi Arabia’s ACWA Power is already building the first 160 MW plant in the Ouarzazate area under a government initiative to produce 2 gigawatts of solar power by 2020, which is equivalent to about 38 percent of Morocco’s current installed generation capacity. 

Reporting by Aziz El-Yaakoubi; editing by Keiron Henderson

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