Acwa Power’s 120MW Khalladi Wind Project in Morocco will sell 80% of the power it produces to three large cement companies. Holcim Morocco, Asment, and Cimat have signed long-term agreements to buy 80% of the power generated at prices lower than from the grid.
Locking in these offtakers was a crucial factor in helping the $180 million greenfield project, 50km east of Tangier, reach financial close in the final quarter of 2016. It meant the project needed no support from the Moroccan government and is a model Acwa believes can be followed by other private developers selling power to private offtakers in the country.
Acwa Power is the lead developer, with a 75% shareholding, and the Africa-focused Argan Infrastructure Fund (Arif) has a 25% stake. It is the first renewables project funded by European Bank for Reconstruction and Development (EBRD) in Morocco to rely on arm’s length private commercial offtake agreements contracts instead of a state support scheme mechanism. Khalladi is one of the first projects developed under The Moroccan Renewable Energy Law 13.09, which promotes energy production from renewable sources to be sold to private entities for the benefit of private customers connected to the high voltage grid. Thierry Tardy, executive director for acquisitions and project finance at Acwa Power, says the beauty of the Moroccan energy law is that it allows the national grid to be used to sell power to companies that can be at the other side of the country to the power generating plant.
The Khalladi Wind Project is expected to result in greenhouse gas reductions of over 200,000 tonnes of carbon dioxide per year, once it begins operating, which is expected in the first quarter of 2018. The Moroccan government’s wind programme targets the installation of 2GW of wind power capacity by 2020, equivalent to about 28% of Morocco’s current installed generation capacity.
