Morocco Plans 2011 Solar Award As Investor Confidence Returns - Minister
May 04, 2011 - Doug Cameron - wsj.com
Morocco plans to award a landmark contract by year end to build one of the world's largest solar power facilities, the country's industry minister said Monday.
Ahmed Chami, Morocco's Minister of Industry, Trade & New Technologies, said in an interview in Chicago that the state agency running the project has lined up funding support from multilateral agencies that could be exercised by the winning consortia.
Morocco's plan is the most advanced of a broader initiative to tap North Africa's potential for solar and wind power, and Chami also said investor confidence was returning after the country was caught in the wave of protests sweeping the region.
Four bidding consortia have been short-listed for Ouarzazate, the first of a $9 billion project to build five planned facilities aimed at raising the country's solar capacity to 2 gigawatts by 2020, providing 14% of its electricity needs.
The solar project is part of a wider effort to boost Morocco's industrial economy, leveraging its proximity to European and African markets with six "clusters" in sectors including autos, aerospace, agribusiness and electronics.
"Morocco is to Europe what Mexico is to the U.S.," said Chemi. He said Morocco has been successful in attracting overseas investment against rival pitches from eastern Europe and Mexico, reflecting lower labor costs, but also its location as supply chains shortened.
Units of Sumitomo Electric Industries Ltd. (5802.TO), Renault S.A. (RNO.FR) and United Technologies Corp. (UTX) are among those to establish a manufacturing presence in Morocco, and Chemi said Chinese companies are increasingly taking a closer look, though focusing their attention on its potential as a beachhead into Africa, rather than Europe.
The emergence of street protests in Morocco in mid-February unnerved investors, but Chemi said this has stabilized in the wake of reforms announced by King Mohammed VI.
He also said Morocco is looking to improve its competitiveness by moving away from a fixed exchange-rate policy towards a range-bound regime. The dirham is pegged to a basket--80% in euros and the balance in U.S. dollars.
The Ouarzazate solar project includes the teaming of Spain's Enel S.p.A. (ENEL.MI) and ACS SCE, and a group including Saudi Arabia's International Company for Water and Power. A third grouping includes Egypt's Orascom Construction Industries S.A.E. (OCIC.CI) and two German partners, with Spain's Abeinsa ICI, Abengoa Solar, Japan's Mitsui and Abu Dhabi National Energy Company completing the line-up.
-By Doug Cameron, Dow Jones Newswires; 312-750-4135; email@example.com