Genesis Morocco: World Bank Releases Another $5.5 Billion for Commercial-Scale Solar Projects in MENA

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Genesis Morocco

Project Genesis is a strategic sustainable development framework for Morocco to translate from being a net importer of energy and a country facing water shortage issues, into the number one producer both of clean renewable energy and water in the region.

Monday, December 14, 2009    <<Home

World Bank Releases Another $5.5 Billion for Commercial-Scale Solar Projects in MENA

The World Bank has just announced the release and approval of another $5.5 billion in investment capital for 11 commercial-scale solar projects.

The World Bank has already released $750 million in investment funds to help drive renewable energy investment and development, but they hope this substantial sum of money will really get foreign investors going.

The $5.5 billion will be used to develop 11 commercial-scale solar arrays in the Middle East and North Africa. The decision for the gigawatt-sized developments came due to the area’s potential for solar energy.

The World Bank hopes these funds will be used to not only construct the solar power plants but also bring in Green Business foreign investment, help fund the development of more cost-efficient solar technologies, and someday provide clean energy to Europe.

The Clean Technology Fund (CTF) approved financing of $750 million on December 2, 2009, which will mobilize an additional $4.85 billion from other sources, to accelerate global deployment of Concentrated Solar Power (CSP). It will do so by investing in the CSP programs of five countries in the Middle East and North Africa: Algeria, Egypt, Jordan, Morocco, and Tunisia. The CTF is a multi-donor trust fund to facilitate deployment of low-carbon technologies at scale. Specifically, the CTF approved an investment plan which will:

-- Enable MENA to contribute the benefit of its unique geography to global climate change mitigation -- no other region has such a favorable combination of physical and market advantages for CSP;

-- Support the deployment of about 1 gigawatt of CSP generation capacity, amounting to a tripling of worldwide CSP capacity;

-- Support associated transmission infrastructure in the Maghreb and Mashreq for domestic supply and exports, as part of Mediterranean grid enhancement. This will enable the scale up of CSP through market integration in the region;

-- Leverage public and private investments for CSP power plants, thereby almost tripling current global investments in CSP; and

-- Support MENA countries to achieve their development goals of energy security, industrial growth and diversification, and regional integration

The proposed gigawatt-scale deployment through 11 commercial-scale power plants over a 3-5 year time-frame would provide the critical mass of investments necessary to attract significant private sector interest, benefit from economies of scale to reduce cost, result in learning in diverse operating conditions, and manage risk.

Shamshad Akhtar, World Bank Regional Vice President of the Middle East and North Africa, said

'This is a most strategic and significant initiative for MENA countries. The initiative would leverage energy diversification, while promoting Euro-Mediterranean integration to the benefit of MENA countries that will be able to exploit one of the major untapped sources of energy. This endeavor is far-reaching with global objectives, implications, and potential impact. It will facilitate faster and greater diffusion of this technology in this region which holds significant potential for CSP".

Potential for Green House Gas (GHG) reduction: The proposed projects will avoid about 1.7 million tons of carbon dioxide per year from the energy sectors of the countries. If the program is successful and replicated, the global benefits will be far larger. The transformational objective of this investment plan is served by accelerating cost reduction for a technology that could become least-cost globally, and then be replicated in other countries with high GHG emissions.

Expected Results from the Investment plan: The results indicators for the investment plan are:

A GHG reductions of at least 1.7 million tons of CO2-equivalent per year.

A Approximately 900 MW of installed CSP capacity by 2020.

A $4.85 billion of co-financing mobilized, including sufficient concessional financing to ensure viability of CSP plants.

A Cost of typical solar field in US$ per m2 is expected to decline over the life of the program.

The Climate Investment Funds (CIF), implemented jointly by the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, Inter-American Development Bank, International Finance Corporation, and World Bank, is comprised of the CTF to provide scaled up financing for the demonstration, deployment and transfer of low carbon technologies that have a significant potential for long-term greenhouse gas emissions savings; and the SCF, a suite of three targeted programs to pilot new approaches to climate action, each with potential for scaled up, transformational action: the Pilot Program for Climate Resilience (PPCR), the Forest Investment Program (FIP) and the Program for Scaling Up Renewable Energy in Low Income Countries (SREP).

//Personal notes : A source for the financing of the national 2000 MW project right there. Im also happy to see that Project Genesis is taking shape as I estimated that the interests would converge to their lowest possible denominator : cheap infinite energy supply for Europe and the region. Now what is the World Bank proposing ? Fresh investments ? Why not close the loop by providing debt reconversion.