By Karl-Erik Stromsta in London
Tuesday, January 07 2014
Morocco is seen as a beacon of light in the otherwise disappointing North African renewables market, with Saudi Arabia’s ACWA Power currently building a 160MW parabolic-trough CSP plant in Ouarzazate, central Morocco.
Morocco’s 4GW renewables target for the end of the decade hinges on five utility-scale solar plants being in place – with current plans siting three of them within or near Western Sahara.
However, sources at the European Investment Bank, the World Bank and German development bank KfW have told Reuters that their institutions would not back projects in Western Sahara, given ongoing ambivalence regarding Morocco’s territorial claim to the region.
Morocco’s official plans call for a 500MW solar project at Foum El Eoued and a 100MW plant near Boujdour – both within Western Sahara – and another 500MW project at Sabkhat Tah, on the border.
“If we support those investments, it would look like we are supporting the Moroccan position” vis-à-vis Western Sahara, a “senior bank source” tells Reuters.
“We have never supported any project in [Western Sahara], and we won’t,” a second unnamed source is quoted by Reuters as saying.
The political uncertainty surrounding Western Sahara has dragged on for decades, but it is apparently the first time representatives from such critical lenders have stated their unwillingness to finance renewables projects in the region.
Other options for Morocco may include re-siting the projects or looking for other sources of funding, perhaps from Arab Gulf states.
Morocco claims ownership of the whole of Western Sahara, and effectively controls much of the region, including the largest city, El Aaiún.
However, the indigenous Sahrawi people also claim ownership of Western Sahara under the so-called the Sahrawi Arab Democratic Republic – a country which is formally recognised by the African Union, and heavily backed by neighbouring Algeria.
Lenders like the World Bank, the EIB and KfW have been seen as central to the development of large-scale renewables in North Africa, either through the Desertec Industrial Initiative or other programmes. Last autumn Germany’s KfW agreed to provide a €654m ($891m) loan to Morocco to partially finance the next two plants in its pipeline, both at Ouarzazate.
Morocco was due in late 2013 to have launched the tender for those plants, having already published a shortlisted group of bidders, but no announcement has yet been made.
Western Sahara is among the most sparsely populated regions in the world, covering more than half as much area as Morocco, but with less than one-sixtieth its population.
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