The UK’s International Power and Nareva, a subsidiary of Morocco’s ONA Group, are in discussions with Japan’s Mitsui and Japan Bank for International Cooperation (JBIC) to partner the planned Safi independent power project (IPP).

International Power and Nareva were declared first-ranked bidder to build the project in December 2010. The group’s final bid was MD1,069 per MWh resulting in a bid difference of 12 per cent between the International Power/Nareva bid and the next cheapest option, which was offered by GDF-Suez (MEED 10:12:10).

The 1,320MW project is currently in financing and the UK/Moroccan group have entered discussions with Mitsui in a bid to secure debt finance from JBIC. According to a source close to the deal, “It’s very much a possibility. It would be incorrect to say that it is a signed deal, but it’s very close to being a signed deal.”

While the amount that could be made available by JBIC has not been determined, recent IPPs in the region suggest that the Japanese export credit agency could provide up to one-third of the project debt. International Power and Nareva currently hold 50 per cent equity each in the project. Introducing a new developer could result in each partner carrying a one-third equity stake in the project.

However, according to JBIC guidelines, the Japanese partner must have an equal or larger stake in the project than the other partner/s. At the same time, the request for proposals (RFP) issued by Moroccan state utility Office National de l’Electricite (ONE) states that the lead developer must have at least 35 per cent of the equity.

Other developers are also under consideration aside from Mitsui, but according to sources close to the deal, Mitsui is currently the frontrunner.

The Safi IPP will comprise two 660MW turbines for the coal-fired project on a build-own-operate basis under a 30-year contract. Commissioning is scheduled for 2015.

ONE originally planned to take responsibility for the supply of coal feedstock and the construction of coal-handling facilities at Safi port as part of the project. In March 2009, ONE shifted this responsibility on to the developer.

The UK’s HSBC is financial adviser on the project, while US firm Chadbourne & Parke is legal adviser. The US’ Sargent & Lundy is technical adviser for the scheme.