AfBD grants €176 million for the second phase of the largest solar power station in Africa

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The Board of Directors of the African Development Bank Group has approved one loan of €100 million and another of US $119 million for phase II of the Ouarzazate solar complex project (the NOORo II and NOORo III power stations), the former from the Bank’s own resources and the latter from the Clean Technology Fund (part of the Climate Investment Funds) in its capacity as executing agency. This second phase of the project aims to develop two new power stations with a total capacity of around 350 MW and average estimated cumulative production of over 1,100 GWh per year.

“The project is one of the innovative developments in the energy sector supported by the Bank, based on the technology used and the financial arrangements with the support of the Climate Investment Funds, namely a public-private partnership supported by several donors. The Bank’s participation in this second phase will support its position as a leading partner in the development of Morocco and strengthen its dominant role in combatting the effects of climate change,” explained Alex Rugamba, Director of the AfDB Energy, Environment and Climate Change Department, following the approval of the loans.

The project is part of the Moroccan Solar Energy Programme (NOOR), which aims to develop minimum capacity of 2,000 MW by 2020 in order to secure power supplies for the population and productive sectors of the economy. Morocco currently depends on external sources for 95% of its primary energy needs. The country’s energy consumption increased by an average of 7.2% between 2002 and 2012. Looking ahead to 2030, Morocco’s demand for primary energy is expected to triple, whilst demand for electricity is set to quadruple. The country has made securing its power supply a priority for its new energy strategy for 2010 to 2030; one of its aims is to diversify sources of production and generate value from the potential of renewable energy sources, to increase its share of electricity production to 42% by 2020.

The project will bring socioeconomic benefits at a local level to Ouarzazate province, which has an estimated population of 583,000 inhabitants and a poverty rate of around 23%. At a national level, in addition to its positive impact on the balance of trade, it will contribute to: (i) reducing CO2 emissions by around 522,000 tonnes a year; ii) providing a reliable electricity supply to businesses, helping them to improve their competitiveness; and iii) promoting a new industrial sector producing solar equipment, which will create jobs.

This is the second project funded by the AfDB at the Ouarzazate solar complex. The first, in 2012, involved a loan of €100 million from the Bank’s own resources and a loan of US$100 million from the Clean Technologies Fund towards the completion of the first phase of the NOOR Ouarzazate complex. Work on the first phase began in 2013 with the construction of the first 160 MW solar power station (NOORo I), which is scheduled to come into operation by the end of 2015. The project complements some of the Bank’s operations currently being implemented in the energy sector in Morocco, such as the project to develop the electricity transport and distribution network, which will mostly be used to take production from the Ouarzazate complex.