The UK/French IP-GDF Suez and the local Nareva have signed a $350m financing deal for a 300MW wind farm at Tarfaya in Morocco.

Morocco’s Office National de l’Electricite (ONE) selected IP-GDF Suez and Nareva in August 2010 after the partnership submitted a price of MD7.548 ($5.16) per kWh in July 2009.

The almost two-year delay between the selection of bidders and signing of financial arrangements has been attributed to problems in buying the land from the municipality, according to sources close to the deal.

Funding for the project was provided by three local lenders: Attijariwafa Bank, Banque Populaire and Banque Marocaine du Commerce Exterieur.

In April, ONE signed a 20-year power purchase agreement (PPA) with the sponsors to become the project’s designated offtaker.

ONE’s advisory team comprised the US’ Chadbourne & Parke, UK’s HSBC and UK’s Garrad Hassan. The UK’s Clifford Chance advised Nareva and IP-GDF Suez.

Tarfaya is the largest wind farm project in Africa and it is only the second to have been developed under the independent power project (IPP) scheme.

With demand for electricity in Morocco expected to increase by more than 8 per cent a year for the next 20 years, the Moroccan government has initiated a programme to invest $3.5bn to increase the country’s wind and solar power capacity. The government plans to construct five major wind farms to increase the country’s wind power capacity to 2,000MW by the year 2020, from its current production capacity of 280MW.

IP-GDF Suez and Nareva are also working on the development of a 1,320MW coal-fired power plant at Safi in Morocco.