A $9 billion solar energy project is at risk as financial backers from around the world express concern at plans for plans in the disputed Western Sahara. The project aims to turn dessert sun into lucrative power exports to Europe, according to Reuters.
Morocco submitted plans in 2009 to generate 4 gigawatts of power by 2020 through the use of solar plants and wind farms. However, much of the proposed output is to come from plants planned for the Western Sahara region, which Morocco has controlled since 1975. The lucrative region has offshore fishing, phosphate reserves and oilfield potential.
Morocco’s plans call for building five solar power plants, including two in Western Sahara – a 500 megawatt (MW) plant at Foum El Oued and a 100 MW plant near Boujdour. Another 500 MW project is planned at Sabkhat Tah which borders Western Sahara.
Yet lending sources at German state-owned bank KFW, the World Bank, the European Investment Bank, and the European Union have told Reuters they will not finance projects based in Western Sahara.
“If we support those investments, it would look like we are supporting the Moroccan position. We are neutral regarding that conflict,” one senior bank source told Reuters.
“We have never supported any project in that territory (Western Sahara), and we won’t, although the Moroccan solar plan means a lot for us,” a second source told Reuters.
Mines and Energy Minister Abdelkader Amara told Reuters Morocco dismissed concerns over financing though he acknowledged plans for Western Sahara were not yet finalised.
“In the initial plan, three solar power plants of five are based in the southern provinces (Western Sahara), but we have not yet decided all those areas yet,” he told Reuters. “If those institutions say that they would not finance them, we will see at the time.”
Sources say Morocco may seek alternative bilateral financing from Arab Gulf states already invested in the kingdom if KFW and others decide against backing the sites planned for Western Sahara.
Kosmos Energy and Cairn Energy last year also started seismic surveys off Cap Boujdour in Western Sahara and plan to drill an exploration petroleum well.
“We respect international laws. We have started oil exploration and have signed a fishing agreement with the European Union,” Amara told Reuters. “So I don’t see why we could not get the financing needed for those solar power projects.”
Moroccan lawmakers drew up a renewable energy law in 2009 which helped attract foreign investors including German industrial and financial firms which set up the north Africa-focused Desertec Industrial Initiative (DII).
However, some members have since quit the DII, including manufacturers Siemens and Bosch, and European efforts to bolster production of renewable energy have reduced Europe’s need for potential North African imports.
Morocco has domestic demand for such power, however, as the country remains heavily reliant on energy imports.
