EBRD Orders a Market Demand Study of Sustainable Energy Investment potential in Morocco
This cannot be allowed to drag on indefinitely, EBRD is hampered in its efforts to implement credit lines through the SEFF mechanism because it has no visibility on what Morocco is doing aside from its large scale utilities program. On the up note, it wants to be able to finance projects "that enhance industrial energy efficiency, particularly in small and medium size enterprises; fund small scale renewable energy projects; improve energy efficiency in existing buildings; and enhance household energy efficiency by the measures like insulation, installment of energy efficient devices, and use of renewable energy sources." The keyword being "Bankability"
This is a welcome development, the report should be publicly available within 4 months and will be covered in this blog when finalized.
Morocco is a member of the European Bank for Reconstruction and Development (the EBRD) and its Board of Directors is expected to consider in due course a proposal enabling the EBRD to finance technical assistance and related activities in the country.
Assignment Background: Energy demand in Morocco has been rising steadily, in particular the demand for electric power, and since 2004 annual growth rates in electricity consumption have averaged seven per cent. Power generation is primarily fuelled by fossil energy sources such as coal, natural gas and heavy fuel oils. The country possesses virtually no fossil energy sources of its own and must therefore import its fuel supply (Morocco produces small volumes of oil and natural gas from the Essaouira Basin and small amounts of natural gas from the Gharb Basin). Both in absolute and relative terms, Morocco's high fuel import rate in excess of 95 per cent makes it North Africa’s largest energy importer.
Morocco's dependency on imports to meet the rapidly rising demand for energy represents a financial drain for the country. With the majority of Morocco’s power generation infrastructure relying on imported hydrocarbons, the current financial burden is unlikely to reduce in the near future. Forecasted demand will cause Moroccan greenhouse gas emissions, currently still low, to rise considerably.
However, Morocco can succeed in reducing its dependence on energy imports and fostering a more sustainable energy supply by tapping into its enormous potential for renewable energy sources and targeting greater energy efficiency.
To date, however, the lack of a coordinated and agreed statutory framework, suitable institutional infrastructure, defined implementation strategies and adequately qualified experts has handicapped any broadly effective promotion of renewable energy sources and enhancement of energy efficiency.
Within this context the EBRD intends to engage a Consultant to prepare a Market Demand Study to assess sustainable energy (SE) investment potential in Morocco.
Assignment Description: The EBRD intends to promote sustainable energy in Morocco as a part of its Sustainable Energy Initiative and in this context, the EBRD is considering the development of market-based financing mechanisms for energy efficiency and renewable energy projects in Morocco. This could take the form of:
- Dedicated energy efficiency and renewable energy credit lines that provide funds to local financial institutions for on-lending for investments in energy efficiency and/or renewable energy projects;
- Direct lending facility under which lending to medium sized projects can be facilitated;
Involvement of Energy Service Companies in energy efficiency projects; and
- Direct financing of energy efficiency and renewable energy projects in larger companies or as stand-alone project.
One of the key limitations for wider project implementation of SE financing is the lack of financial resources and proper lending facilities, particularly for small-scale projects. Local financial institutions view the SE sector as higher risk, due to lack of technical capacity on the part of lenders to evaluate such projects and potential borrowers being unable to establish bankability of their projects. Sustainable energy facilities developed by the EBRD could become an instrumental in attracting the attention of the financial institutions to this new field and developing a competitive market for these products.
A very good market entry strategy in this area could be to work with local financial intermediaries on developing dedicated energy efficiency credit lines to enhance availability of financing for medium and small-scale energy efficiency investments and for smaller renewable energy projects. The Bank will consider efficiency and renewable energy credit lines (Sustainable Energy Financing Facility model) through the Moroccan banking sector including the necessary technical cooperation support. These financing facilities will be targeted to:
(i) enhance industrial energy efficiency, particularly in small and medium size enterprises;
(ii) fund small scale renewable energy projects;
(iii) improve energy efficiency in existing buildings; and
(iv) enhance household energy efficiency by the measures like insulation, instalment of energy efficient devices, and use of renewable energy sources.
The main objectives of the Assignment shall be: to prepare a Market Demand Study that assesses the sustainable energy investment potential in Morocco and provides sufficient information to guide the EBRD through the design and launch of a successful financing mechanism for energy efficiency and renewable energy projects in Morocco. It shall be prepared through:
- analysis of the latest available studies, statistical information, recent policy developments
- research into the demand for energy efficiency and renewable energy investment projects
- review of activities of government (state policy and programmes), other International Financial Institutions as well as bilateral and multilateral donors active in Morocco in the field of energy efficiency, renewable energy and carbon financing
- investigations into the situation of the (private) banking sector, namely its readiness to accept credit lines and guarantee mechanisms
- investigations into the situation of industry, including SMEs, the commercial and public/municipal sector as well as the residential sector and their access to funding and - a detailed analysis of market barriers for energy efficiency, renewable energy and carbon financing projects.
The Consultant shall provide added value by capturing local knowledge and placing emphasis on the analysis of information and trends, and the provision of recommendations.
The Market Demand Study will:
a) provide sufficient information to ensure that EBRD understands the local sustainable energy market and how best to structure market-based financing mechanisms for sustainable energy projects in Morocco;
b) identify barriers to sustainable energy investments and provide recommendations for overcoming those barriers on various levels (legal, institutional, fiscal, financial, behavioural, awareness, etc.) and a potential role of EBRD in this process;
c) appraise opportunities to promote market-based financing mechanisms to Moroccan financial institutions and/or to end-users in the industrial, commercial, public/municipal service and residential sectors;
d) identify and evaluate local engineering capacity and evaluate potential sustainable energy investment opportunities;
e) identify existing and/or potential market for Energy Service Companies (ESCO);
f) identify market barriers and provide recommendations upon which EBRD can structure and implement credit lines, direct lending facility and direct financing as well as work with Energy Service Companies; and, if appropriate, renewable energy investment projects in the Moroccan power, industrial, commercial, public/municipal service and residential sectors;
g) identify barriers and provide recommendations upon which EBRD can provide carbon financing for energy efficiency and renewable energy projects; and
h) recommend a set of technical assistance objectives upon which EBRD can structure and initiate a package of technical assistance and ensure the successful implementation of a market-based financing mechanisms for energy efficiency and renewable energy projects in Morocco.
Assignment Duration: It is expected that the Assignment will start in November 2011 and will have a duration of four months. No extension is envisaged.
If you fit the profile as a consultant visit http://www.devex.com/en/projects/market-demand-study-of-sustainable-energy-investment-potential-in-morocco for more details