meed-logo

line1 line2 line3
SIGN IN / REGISTER

Morocco leads Maghreb energy transition

11 July 2023

More on Morocco’s power and water sector:

> Morocco seeks firms for 400MW pumped storage contract
> Morocco extends Casablanca water PPP deadline
> US firm plans 2MW Morocco hydrogen project
> China's Tinci plans $280m Morocco lithium-ion plant
> Xlinks to seek construction partners
> Morocco signs $6.4bn electric battery and storage deal
> Morocco tenders 900MW power plant contract

 

Morocco is among the list of Maghreb countries that have seen few deals awarded in the power generation sector over the past 12 to 24 months.

The last contract awards it recorded were in April 2022 for the 333MW first phase of the Noor 2 solar photovoltaic (PV) project.

The Moroccan Agency for Sustainable Energy (Masen) and Morocco’s Energy Transition & Sustainable Development Ministry awarded six packages of this tranche to three independent power producer (IPP) developers: Voltalia Maroc, Enel Green Power Morocco and the UAE-based Amea Power.

Xlinks scheme

The country, however, could emerge from the doldrums with key projects such as the $18bn Xlinks on the horizon, enabling it to hold on to its status as the regional leader in renewable energy.

The Morocco-UK power project entails building 10,500MW solar and wind farms in Morocco’s Guelmim-Oued Noun region and sending 3,600MW a day of energy exclusively to the UK via four 3,800-kilometre high-voltage, direct current (HVDC) cables.

MEED understands the first phase of the surveys for the project is complete, with geophysical and geotechnical surveys expected to finish this year and next year.

The HVDC pipeline will pass through Spain, Portugal and France, where permitting processes are being undertaken. Financing sources could include export credit agencies, multilateral development agencies and commercial or investment banks.

Morocco aims to source up to 52 per cent of its energy – up from the current 32 per cent – from renewable sources and reduce greenhouse gas emissions by 45.5 per cent by 2030 

Earlier this year, Xlinks completed an early development funding round that included a $30.7m investment from Abu Dhabi National Energy Company (Taqa) and $6.23m from London-headquartered Octopus Energy Group.  

The UK-based startup is expected to seek interest from original equipment manufacturers and construction partners soon. This will be followed by seeking interest from financial advisers for the project.

Low-carbon molecules

Morocco aims to source up to 52 per cent of its energy – up from the current 32 per cent – from renewable sources and reduce greenhouse gas emissions by 45.5 per cent by 2030.

Thanks to the country’s strategic location and favourable legislative framework, this ambition is drawing investors focused on green hydrogen and derivatives production.

In April, a team led by China Energy International Construction Group signed a memorandum of cooperation to develop a green hydrogen project in a coastal area in southern Morocco.

The planned project involves constructing an integrated green hydrogen-based ammonia production facility. It will require a solar PV power generation plant with a capacity of 2GW and a wind power plant with a capacity of 4GW.

These plants will supply power to an electrolysis plant that can produce 320,000 tonnes of green hydrogen annually, which will then be processed to produce 1.4 million tonnes of green ammonia annually.

Energy China International Construction Group has partnered with Saudi Arabia’s Ajlan & Brothers Company and the local firm Gaia Energy Company for the project.

Amun project

It is the second high-profile green hydrogen project announced for the North African country since April 2022, when Serbia-headquartered renewables developer and investor CWP Global appointed US firm Bechtel to support developing large-scale green hydrogen and ammonia facilities in the country.

The Amun green hydrogen project, which CWP Global plans to develop in Morocco, is understood to require 15GW of renewable energy and has an estimated budget of between $18bn and $20bn.

Along with these projects – which could take several years to implement – several green hydrogen pilot projects are also under way in Morocco.

Africa-focused transitional energy group Chariot, the Mohammed VI Polytechnic University and UK-based hydrogen electrolyser developer Oort Energy are planning several small projects using a polymer electrolyte membrane electrolyser system patented by Oort.

The three parties will run initial proof of concept projects while evaluating the feasibility of implementing large-scale green hydrogen and ammonia production.

One of the pilot projects is intended to be hosted at the research and development unit at state-owned fertiliser producer OCP Group’s facilities in Jorf Lasfar.

US-headquartered Verde Hydrogen also plans to develop and commission a 2MW green hydrogen electrolyser plant project in Morocco, which it expects to complete next year.

Electric vehicle components

Recent developments also point to Morocco potentially becoming a global hotspot for the electric vehicles supply chain.

In July this year, China’s Guangzhou Tinci Materials Technology announced plans to build a lithium-ion battery materials plant in the country. The project capitalises on Morocco’s ample phosphorite ore resources.

The firm’s Singapore unit is expected to invest as much as $280m to set up a project company in the North African country to produce lithium-ion battery materials that can be exported to Europe.

In late May, the Moroccan government and Chinese-European company Gotion High-Tech also signed a preliminary agreement to establish a factory to produce electric car batteries and energy storage systems in the country.

The project is estimated to cost MD65bn ($6.3bn). The planned facility will have the potential to “create a comprehensive battery production solution” with a capacity of 100GW a year. 

Morocco’s minister-delegate in charge of investment, convergence and evaluation of public policies, Mohcine Jazouli, said the factory “will not only contribute to Morocco’s renewable energy and electric transport sector, but also solidify its reputation as an automotive industry powerhouse”.

Traditional energy

Meanwhile, along with its intense drive towards clean energy, Rabat is also making progress on traditional energy projects. The National Office of Electricity & Drinking Water (Onee) last awarded a thermal power plant deal in 2017. So it was a surprise when Onee recently tendered a five-year contract to build and operate an open-cycle 900MW thermal power plant in the country.

To be located along the M18 station point of the Maghreb-to-Europe gas pipeline, the proposed power generation plant will use dual-fuel gas turbines, with diesel fuel as a backup. Onee expects to receive bids for the contract by 5 September.

In addition, the procurement process is under way for a major seawater reverse osmosis (SWRO) desalination plant in Grand Casablanca, which has a design capacity of 548,000 cubic metres a day.

The build-operate-transfer contract is for 30 years, including a three-year construction period and 27 years of operation and management.

Making amends

To its credit, however, Morocco’s sustainable campaign has extended to other sectors that have traditionally used carbon-intensive processes and technologies.

The Washington-based International Finance Corporation (IFC) and OCP Group recently signed a €100m ($111m) green loan to build four solar plants to power OCP’s Morocco operations.

The four solar plants, with a combined capacity of 202MW, will be located in the mining towns of Benguerir and Khouribga, home to Morocco’s largest phosphate reserves.

As captive power plants, they will supply clean energy directly to OCP’s operations. The project is part of OCP’s $13bn green investment programme, which aims to increase its green fertiliser production and transition its operations to green energy by 2030.

More on Libya and Tunisia’s power and water sectors:

> Libya awards $1.3bn power plant contract
> Italy and Tunisia start $1bn Elmed prequalifications
> Acciona and Swicorp to develop 75MW wind project
> Suez signs $221m Tunisia wastewater PPP deal
> Tunisia tenders 1GW of solar IPP contracts

Libya and Tunisia

Earlier this year, the state-owned General Electricity Company of Libya (Gecol) awarded a joint venture of Qatar-based construction company Urbacon for Trading & Contracting and Egypt’s ElSewedy Electric an engineering, procurement and construction contract for a 1,044MW gas-fired power plant in Libya.

The contract is valued at €1.19bn ($1.29bn). The project is expected to be completed in 26 months and comprises six gas turbines from Germany’s Siemens Energy. The emergency power plant project is located in Zliten.

The power plant is expected to help address the endemic electricity shortage in the country. However, it does little to reduce Libya’s carbon emissions. At under 10MW, the country has the lowest renewable energy installed capacity in the Middle East and North Africa (Mena) region, against a total capacity of 11,000MW as of 2021, according to International Renewable Energy Agency data.

Tunisia, where renewable sources account for at least 8 per cent of its power generation capacity, has also made minor progress over the past few months.

A team of Spain’s Acciona and Saudi investment group Swicorp have partnered to develop a 75MW wind farm in Chenini in Tunisia’s Tataouine governorate.

The Spanish-Saudi team is understood to have agreed to the technical and financial terms of the project, as well as the land lease for installing 14 wind turbines in Djebel Dahar, located 80 kilometres from Djerba.

Each wind turbine will have a capacity of 6MW. The project will require an estimated investment of TD500m ($164m).

Tunisia’s wind potential is estimated at 8,000MW, according to its wind atlas and a study published in 2021 by the German international cooperation agency Giz.

In January this year, the African Development Bank Group approved a $27m and €10m ($10.67m) loan package to co-finance the construction of a 100MW solar power plant in Kairouan, Tunisia.

The approval covers $10m and another €10m from the bank, and a $17m concessional financing from the Sustainable Energy Fund for Africa, a special multi-donor fund managed by the bank.

Additional financing will come from the IFC, the World Bank Group and the Clean Technology Fund (CTF).

The 100MW Kairouan project was part of the first round of solar schemes under Tunisia’s concession regime, launched through an international tender by the Ministry of Industry, SMEs & Cooperatives in 2018.

A consortium formed by Dubai-headquartered Amea Power and TBEA Xinjiang New Energy Company won the contract to develop the scheme in December 2019.

The project is located in El-Metbassta, in the Kairouan North region, about 150km south of the capital, Tunis.

More on Algeria’s power and water sectors:

> Sonatrach seeks solar PV consultants
> Cosider tenders desalination contract
> Sonelgaz tenders 2GW solar schemes
> Wetico wins Algeria water desalination contracts

Algeria

Despite a highly tentative approach to adopting low-carbon energy, there are some promising projects in Algeria.

In March, state-owned utility Sonelgaz invited companies to bid for the contract to build 15 solar plants in the country with a combined capacity of 2,000MW.

The solar projects will be built in 11 locations across the North African state.

The locations and capacities of the proposed solar power plants include:

  • Bechar (Abadla): 80MW
  • Bechar (Kenadsa): 120MW
  • Msila (Batmete): 220MW
  • Bordj Bou Arreridj (Ras al-Oued): 80MW
  • Batna (Merouana): 80MW
  • Laghouat: 200MW
  • Ghardaia (Guerrara): 80MW
  • Tiaret (Frenda): 80MW
  • El-Oued (Nakhla): 200MW
  • El-Oued (Taleb Larbi): 80MW
  • Touggort: 130MW
  • Mghaier: 220MW
  • Biskra (Leghrous): 200MW
  • Biskra (Tolga): 80MW
  • Biskra (Khenguet Sidi Nadji): 150MW

In December 2022, Algeria’s Energy Transition & Renewable Energies Ministry (Shaems) also launched a tender to deploy 1,000MW of solar capacity. However, the status of the tender is unclear as of mid-2023.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10991889/main4537.jpg
Jennifer Aguinaldo

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Yahsat wins $5.7bn UAE contract

    22 September 2023

    Al-Yah Satellite Communications Company (Yahsat) has won an AED18.7bn ($5.1bn) contract for the provision of satellite capacity and services to the UAE government. 

    Its subsidiary, Yahsat Government Solutions, will implement the 17-year contract, which includes operations, maintenance and technology management services of ground segment satellite systems and terminals.

    The contract will replace two current agreements, the capacity services agreement and the managed services mandate, which end in November and December 2026, respectively.

    Under the new contract, Yahsat will provide the government with "secure and reliable satellite capacity and related managed services using the Al-Yah 1 and Al-Yah 2 satellites, currently in orbit, and supplement this with two new satellites, Al-Yah 4  and Al-Yah 5".

    It is expected that the Al-Yah 4 satellite will be launched in 2027, followed by Al-Yah 5 in 2028.

    Yahsat has been providing services to the UAE government for nearly two decades, since it first began operations.

    The contract increases Yahsat's contracted future revenues to AED25.7bn, 16 times its 2022 annual revenues, according to a company statement.

    It also extends backlog well beyond 2040, providing security and visibility over its future cash flows.

    In June, Yahsat signed an authorisation to proceed (ATP) with Airbus for the construction of Al-Yah 4 and Al-Yah 5.

    According to Yashsat, the ATP document "preserves the programme schedule and enables certain activities to commence, such as the system requirements review, design work and procurement activities for long-lead items".

    The Al-Yah 4 and Al-Yah 5 procurement, including spacecraft, ground segment infrastructure, launch and insurance, will be funded by Yahsat’s resources, in addition to other potential funding options that are currently under review.

    The award also includes an advance payment from the government of $1bn, to be received in 2024.

    Main photo: Musabbeh al-Kaabi, chairman of Yahsat

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11166386/main4035.jpg
    Jennifer Aguinaldo
  • Riyadh builds the world’s largest urban park

    21 September 2023

     

    Tucked away from view behind site hoarding in the centre of Riyadh, work is progressing on a project that will transform the heart of the Saudi capital by creating the world’s largest urban park.

    The King Salman Park project will cover an area of 16.7 square kilometres, and more than 70 per cent of that space will be green areas.

    “The unique aspect of our project when you compare it to others is the amount of green space it will have,” says George Tanasijevich, CEO of King Salman Park Foundation.

    “Other projects will have hotel rooms and residential units, but none will have the amount of green space that King Salman Park will have. It will be substantial by global standards.”

    The scale of the project becomes apparent when considering public parks in other major cities. It is five times the area of New York’s Central Park, six times the size of London’s Hyde Park, and 16 times larger than Singapore’s Gardens by the Bay.

    The aim of King Salman Park is to give residents of Riyadh access to a world-class park on their doorstep – the park is connected to several main roads and linked to the Riyadh Metro and the city’s bus station.

    “People today have to travel to experience green spaces, so we are bringing something here that will allow them the convenience of being at home and experiencing the lifestyle benefits of green space,” says Tanasijevich.


    Land at the King Salman Park site has been contoured to create hills

    While much of the focus of Saudi Arabia’s Vision 2030 is on economic transformation, it also includes targets aimed at improving the quality of life for people in the kingdom.

    “There is an economic aspect to what we are doing,” says Tanasijevich. “The primary highlight of our contribution [to Vision 2030] is more focused on lifestyle. It is not just being able to spend time in green spaces, but also all the sports facilities that will encourage younger people to become more interested in sports and athletics.”

    Project progress

    Launched in March 2019, there has been significant progress on the construction of the project. Much of the land has been shaped and contoured to create hills that will break up Riyadh’s typically flat topography.

    Work is also advancing on infrastructure and buildings, including the Royal Arts Complex and a visitor centre.

    “What we are trying to do is put together components that work together as a standalone project that are self-sustaining. We do not want people to visit and feel something is missing,” says Tanasijevich. 

    “We are going to have enough variety and elements in there that even when we open phase one, people are going to embrace it and find a multitude of ways to experience it.”

    As construction advances, the project took a major step forward on the first day of the Cityscape Global exhibition, which was held in Riyadh on 10-13 September. There, the King Salman Park Real Estate Development Fund was launched, with the aim of developing the first real estate investment plot within the site.

    The fund will bring in fresh financing for a SR4bn ($1.1bn) mixed-use project that will have more than 1,500 residential units together with offices, retail outlets, hotels, schools and other public amenities on a 290,000 square-metre site.

    Saudi Fransi Capital is the fund manager and King Salman Park Investment & Real Estate Development Company is the master developer. Naif al-Rajhi Investment Company is the real estate developer and master lessee of the entire project.

    Images: King Salman Park Foundation

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11159877/main.gif
    Colin Foreman
  • Amaala multi-utilities contract is valued at $2bn

    21 September 2023

    The contract to develop and operate a multi-utilities infrastructure for the 4,155 square-kilometre Amaala tourism scheme on Saudi Arabia’s Red Sea coast is valued at $2bn, according to an industry source.

    Red Sea Global recently awarded the Amaala multi-utilities contract to a team comprising France’s EDF and UAE-based Abu Dhabi Future Energy Company (Masdar).

    The scope of the contract includes a 250MW solar power plant and 700 megawatt-hour battery energy storage system that will enable Amaala to be powered entirely by solar energy.

    The work scope includes a seawater reverse osmosis plant with a peak capacity of 37,000 cubic metres a day, as well as a sewage treatment plant. Both will be powered by renewable energy.

    MEED understands another French firm, Suez, will implement the water infrastructure component of the project.

    Red Sea Global and the developer team have yet to confirm the engineering, procurement and construction and battery energy storage contractors for the project.  

    Amaala issued the tender for the contract in October 2021. It will be developed using a public-private partnership model.

    In February 2022, Amaala appointed Austria-headquartered ILF Consulting Engineers as technical adviser for the multi-utilities project.

    Concession agreement

    The developer consortium will be responsible for the development; financing; engineering, procurement, construction and installation; testing and commissioning; insurance; ownership; operation and maintenance; and transfer of each of the infrastructure systems under a 25-year concession agreement.  

    Each infrastructure system will be transferred to Amaala at the end of the concession term.

    Owned by Saudi Arabia’s sovereign wealth vehicle, the Public Investment Fund, Amaala includes three communities – Triple Bay, the Coastal Development and the Island – each consisting of several residential, hospitality and retail components.

    Construction works on phase one of Triple Bay have started.

    The scheme is part of the Amaala Tourism Destination Development project.

    Amaala previously planned the project. In October 2022, Amaala merged with The Red Sea Development Company to form a new company called Red Sea Global, which is now implementing the project.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11163045/main4840.jpg
    Jennifer Aguinaldo
  • Saudi Arabia’s $2bn water pipeline expands private sector role

    19 September 2023

    Commentary
    Jennifer Aguinaldo
    Energy & technology editor

    The $2bn Rayis-Rabigh independent water transmission pipeline (IWTP) project in Saudi Arabia further expands the role of private companies in developing and operating public infrastructure assets within the kingdom.

    It could have been just another water pipeline project if not for its scale – it extends 150 kilometres and can transmit up to 500,000 cubic metres of water – and its structure as a 35-year public-private partnership project.

    It also links major municipalities in Medina and Mecca, further increasing the project's strategic importance. 

    The project is reminiscent of the Rabigh 3 independent water project and the Dammam independent sewage treatment plants, which were procured between 2018 and 2019 by the state-backed offtaker Saudi Water Partnership Company (SWPC), formerly known as the Water & Electricity Company.

    The levelised water transmission tariff of SR1.256 ($0.33) a cubic metre is without any precedent, since the project is the first of its kind.

    The Rayis-Rabigh IWTP will utilise the build-operate-transfer model, rather than the build-own-operate project structure employed by the private sector water desalination and water treatment plant projects in the kingdom.

    The project demonstrates the private sector's appetite to win new work that does not necessarily fall within its comfort zone, since all water transmission pipeline projects in the kingdom have previously been procured using the conventional engineering, procurement and construction model.

    A total of 31 companies, including 14 that are locally domiciled, expressed interest in bidding for the Rayis-Rabigh IWTP contract in December 2021.

    The contract was tendered in August 2022 and SWPC received bids in March this year from three teams, including one led by Nesma Company and another led by Vision International.

    Alkhorayef Water & Power Technologies, which leads the winning consortium for the project, said it will now work with the relevant stakeholders to reach financial close on the project.

    If successfully implemented, the project paves the way for seven IWTP projects that the kingdom is planning to procure in 2022-28.

    The market will now focus on the award of the contract for the kingdom's first independent strategic water storage project, also in Mecca, as Saudi Arabia continues to push the limits for private sector participation in previously state-dominated assets.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11155586/main.jpg
    Jennifer Aguinaldo
  • Aramco extends Safaniya cogen bid deadline

    18 September 2023

    Saudi Aramco has extended by three months the tender closing date for a contract to develop a cogeneration independent steam and power plant (ISPP) project in Safaniya.

    It now expects to receive bids by December in lieu of the previous bid deadline of 17 September, according to a source close to the project.

    Aramco held a job explanation meeting and site visit for the Safaniya ISPP project in May.

    Aramco issued the tender for the contract for the planned cogeneration ISPP facility, which will cater to Aramco's Safaniya central processing facilities (CPF), in April.

    MEED understands that the electricity generated during the steam production will be supplied to the CPF and offshore oil and water injection facilities through a new 230-kilovolt gas insulation station.

    Under the current plan, the Safaniya CPF will provide fuel gas, desalinated water and steam condensate to the proposed cogeneration plant, treating the oily and process wastewater.

    The plant is expected to have a design capacity of between 500MPPH and 700MPPH steam and 300MW-400MW of power generation. It also entails the capacity expansion of a seawater reverse osmosis (SWRO) plant by 10,000 cubic metres a day (cm/d).

    Aramco expects to implement the cogeneration project on a build-own-operate-transfer (BOOT) basis.

    The plant is expected to be commissioned in 2027 and will remain in service as a capital lease for 25 years from the start-up date.

    It is understood bidders are required to provide committed funding for at least 50 per cent of the project's full senior debt requirement upon the tender closing date.

    The facility is envisaged as the primary power source for the Safaniya CPF.

    Japan’s Sumitomo Mitsui Banking Corporation (SMBC) and US-based White & Case are providing financial and legal advisory services to the project client. Germany's Fichtner is providing technical consultancy services.

    Ongoing cogen projects

    In July last, Korea Electric Power Corporation (Kepco) won the contract to develop Aramco’s Jafurah cogeneration ISPP project.

    The plant will have a power capacity of 270-320MW and a low-pressure (LP) steam demand of 77-166 thousand pounds an hour (klb/hr) and high-pressure (HP) steam demand of 29-126 klb/hour by 2023. The LP and HP steam demand will increase to 283-373 klb/hr and 66-321 klb/hr by 2027, respectively.

    Construction work is under way for Aramco’s Tanajib ISPP and desalination plant. Aramco selected a team comprising Japan’s Marubeni and the UAE-based Abu Dhabi National Energy Company (Taqa) to develop the project in 2020.

    On 19 April, Saudi Aramco Total Refining & Petrochemical Company (Satorp) received proposals for the contract to develop a cogeneration ISPP serving the Amiral petrochemicals project in Jubail.

    It is understood that Satorp has issued a conditional award letter to the preferred bidder for the contract, a team comprising Japan's Jera and the UAE's Abu Dhabi National Energy Company (Taqa).

    The facility is expected to have a power generation capacity of 470MW.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/11153220/main.jpg
    Jennifer Aguinaldo