UAE’s leading energy company, TAQA has announced a $1.4 billion financial arrangement for the company’s new power plant project in Morocco.
According to the company, the project is aimed at increasing the power plant’s production capacity from its current 1,356 megawatts to 2,056 megawatts – an increase of 700 megawatts in the facility’s power production.
This is a capacity expansion project for TAQA’s coal-fire powered plant that is sited at Jorf Lasfar, a deepwater commercial port located on the Atlantic coast of Morocco.
The contract, which was disclosed on Thursday, would run for sixteen years, with finance provided by local and international funds. Societe Generale, BNP Paribas and Standard Chartered are the project’s international funding lead arrangers while Banque Populaire du Maroc is the lead arranging credit facilities in Morocco.
The choice of Banque Populaire du Maroc over other credit facilities providers stems from the bank’s market share of customer deposits in Morocco which stands at 27 percent, translating to customer deposits of 169.8 trillion Dirham ($2 trillion). According to the official statement, such strong lead arranging credit facilities are needed to represent about 40 percent of the total debt being raised.
Furthermore, Asian export credit agencies, in addition to other financial institutions, will provide direct loans and guarantees for more than fifty percent of the project’s total incurred debt.
While defending the company’s choice of Morocco for this multi-billion dollar project, TAQA’s chief execuitve, Carl Sheldon, stated that Morocco and other northern African states had presented the company with several opportunities for new power and water projects which are in line with the company’s ever-growing business interests.