Morocco’s Office National de l’Electricite (ONE) has concluded agreements with the UK’s International Power and the local Nareva Holding for a 300MW wind farm at Tarfaya.
According to a source close to the deal, the power purchase agreement (PPA) for the sale of electricity from the wind farm has been agreed and is set to be signed soon. The PPA will run for 20 years at a price of MD 7.548 ($5.16) per kWh.
ONE selected the UK/local partnership in August 2010. The bid has fully committed bank backing from local lenders Attijariwafa Bank and the Moroccan subsidiary of Groupe Banque Populaire. It will be financed on a 75:25 debt:equity basis, with the two sponsors providing half of the equity each.
Bids to build the project were entered in July 2009 in three separate envelopes containing the technical, financial and tariff elements of each submission.
A rival bid for the contract was submitted by France’s GDF Suez. However, it was deemed non-compliant as it was not fully-funded. While GDF Suez’ bid had some backing from Belgium’s Fortis and France’s Credit Agricole CIB, it was not fully funded and so ONE declared it invalid.
Nevertheless, due to the merger of GDF Suez and International Power earlier this year, the disqualification became a moot point.
The winning bidders are advised by the UK’s Clifford Chance. GDF Suez appointed the US’s Vinson & Elkins and Shearman & Sterling is acting for its lenders.