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Mon 8 Oct 2007 09:49 AM

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Morocco to build themal power plant

State utility firm ONE signs $189mn project financing agreement for construction of 300MW power plant.

Morocco on Saturday signed an agreement with Jeddah-based Islamic Development Bank (IDB) to finance the construction of a new thermal power plant to meet rising energy consumption in the North African country.

Younes Kamal Maamar, General Manager of Office National de l'Etlectricite (ONE), Morocco’s primary utility company, signed the $189 million project financing agreement in Jeddah following approval of the project last month by the IDB Executive Board, reported Saudi state news agency SPA.

ONE is using the finances for the construction of a 300-megawatt gas-fired power plant at Mohammedia.

The plant will be the utility firm’s seventh, it already operates six gas-fired power plants in Morocco generating 615 megawatts of electricity.

The increased use of gas for electricity is part of the country’s continued move away from coal, which Morocco’s two largest power plants are still fuelled by.

However, Morocco produces only a small amount of coal and most of it has to be imported from South Africa.

Morocco's electricity consumption is increasing rapidly due to rapid population and economic growth.

Power shortages and a desire to control public spending have led the Moroccan government looking to the private sector to meet the country's power demands.

Morocco received an $820,000 grant from the US government last year to liberalise and restructure its power sector.

According to the US Energy Information Administration, the state's share of electricity generation will likely decline to 40% by 2020.

Nevertheless, ONE will continue to monopolise distribution and transmission of electricity in Morocco.

Currently, ONE is runs a 350 to 400-megawatt combined-cycle power plant in Tahaddart in partnership with Spanish energy firm Endesa, which owns 32% of the plant, and German energy firm Siemens, which owns 20%.

ONE has also awarded Endesa the development rights to a two-unit, 800-megawatt gas-fired power station in the Sidi Kacem Province, which is expected to be completed next year.

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