Morocco takes lead in Desertec's initiative

Morocco's receptiveness to the Desertec initiative and its proximity to Europe helped it land the 150-megawatt solar project.

Morocco, the most hydrocarbon-poor of the Maghreb states, has so far been most receptive to the Desertec initiative, which was established two years ago.

The country is also the nearest in North Africa to Europe, with only the Strait of Gibraltar separating it from the Iberian peninsula.

For those reasons, Morocco was chosen to host Desertec's first pilot project, a 150-megawatt solar plant.

Paul van Son, the chief executive of Dii, the project management company set up to propel the Desertec vision, told Bloomberg News last month that plans for the plant would be finalised in a few months when a decision on the technology had been made.

The project should provide energy to Morocco and Spain by 2014, should planners decide on photovoltaic panels, and about two years later should solar-thermal technology be used.

Dii shareholders, such as Germany's Munich Re, may contribute to the financing of the project.

Desertec will require about €1.9 billion (Dh9.6bn) to set up the first 500 megawatts of capacity in North Africa, according to Dii.

Apart from private investments, Dii is also in negotiations with European and North African governments for grants and loan guarantees.

"The projects will be funded on a case-by-case basis," says Mr van Son. "We try to set up a business case to make it work. The funding will come from governments, the involvement of private investors, the European Investment Bank and the World Bank.".

It remains to be seen how the political situation after the Arab Spring affects the appetite for investment in solar projects in the region,says Mr van Son.

In Europe, the sovereign-debt crisis and restricted bank liquidity could curb spending on the ambitious energy project, analysts say.

* Florian Neuhof

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