September 18, 2014 / 9:43 AM / 3 years ago

Safi Energy secures $2.6 billion financing to build Moroccan power plant

RABAT (Reuters) - Safi Energy Company has secured $2.6 billion in financing to build a 1,386-megawatt coal-fired power plant in southern Morocco, state news agency MAP reported.

Safi Energy is a joint venture between Morocco’s Nareva, France’s GDF Suez GSZ.PA and Japan’s Mitsui (8031.T). The plant, to be built in the coastal city of Safi, would be the second-largest coal-fired power station in Morocco and would satisfy around 25 percent of the country’s power demand.

Morocco wants to meet domestic power consumption using thermal power, clearing the way for it to export renewable energy to the European Union.

The financing secured by Safi Energy includes $900 million from the Bank of Japan (8301.T), $500 million from Moroccan banks Attijariwafa Bank (ATW.CS) and BMCE Bank (BMCE.CS) and $485 million from international banks from France and Britain, MAP said. Other investors will provide the rest of the money, the agency said, without giving further details.

GDF Suez and Nareva won the 23 billion dirhams ($2.68 billion) tender to build and operate the plant in 2010, and Mitsui joined the venture in 2013. The project includes the construction and operation of two 693 MW coal-fired units.

Safi Energy awarded a construction contract, worth $1.77 billion, to South Korea’s Daewoo Engineering (047040.KS) last year and signed a 30-year power purchase agreement with state power utility ONEE.

    The plant which will start operating in 2018, will increase Moroccan coal imports by 3.5 million tonnes annually.

    The government is investing 4.7 billion dirhams to build a coal port in Safi to meet the plant’s needs. The port will be designed to import 7 million tonnes of coal a year, as the government plans to build another plant of the same capacity in the area in the next few years.

    Reporting By Aziz El Yaakoubi; Editing by Pravin Char

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