Morocco’s ONEE Embraces Innovative Titrisation for Al Wahda Gas Power Plant
Morocco’s Office National de l’Électricité et de l’Eau Potable (ONEE) is making waves in the energy sector with a groundbreaking financing strategy for its enterprising Al Wahda gas power plant project. The plant, a cornerstone of Morocco’s energy strategy, will boast a capacity of nearly 1,000 MW and is set to cost a total of 4.16 billion dirhams.This project marks a important departure from traditional financing methods for public infrastructure. For the first time, ONEE is utilizing titrisation, a financial mechanism that allows the issuance of securities backed by future cash flows. This innovative approach has attracted significant interest from investors, demonstrating a growing appetite for alternative financing models in the Moroccan market.
The Al Wahda project has secured a total of 3.26 billion dirhams in funding. Two loans from Attijariwafa Bank and Bank Of Africa contribute a portion of the financing, while the remaining amount comes from two dedicated titrisation funds: FT Flexenergy and FT Nord Energy. These funds, totaling approximately 2 billion dirhams, represent a testament to ONEE’s commitment to exploring new avenues for investment and engaging with qualified investors through specialized obligations.
The remaining 831 million dirhams will be covered by ONEE’s own funds, creating a hybrid model that combines financial innovation with public participation. This approach not only finances the acquisition of new infrastructure but also allows ONEE to anticipate future revenue streams generated by the plant’s electricity production, extending up to 2039.
The Moroccan government’s recent regulatory changes, implemented in August 2022, have considerably expanded the scope of titrisation financing. This new adaptability empowers entities like ONEE to leverage future cash flows to secure funding for crucial infrastructure projects, paving the way for a more dynamic and innovative financial landscape in Morocco.
Morocco’s Al Wahda Gas Power plant: A Model for Sustainable infrastructure Financing
Morocco is making strides in its energy transition with the recent launch of the Al Wahda gas power plant, a project that not only strengthens the nation’s energy security but also paves the way for innovative financing models in the infrastructure sector.
The Al Wahda plant, strategically located near the Maghreb-Europe gas pipeline and a hydroelectric dam, boasts enhanced performance capabilities, offering a 9-10% capacity increase compared to other potential sites. This strategic positioning, coupled with the plant’s flexible operation, allows Morocco to balance its growing energy demands with its commitment to renewable energy sources.
A key highlight of the project is its innovative financing structure. The Moroccan government utilized a titrisation model, a relatively new approach in the country, to raise funds for the plant.This method involves transforming future cash flows from the plant into tradable securities,attracting institutional investors seeking attractive returns.
The Al Wahda project offers a compelling 5.16% return on investment,significantly higher than traditional Moroccan government bonds,making it a lucrative prospect for investors. This success story has the potential to unlock new avenues for financing large-scale infrastructure projects, particularly in the energy sector, where Morocco faces significant investment needs.The titrisation model offers several advantages, including increased flexibility and autonomy for public entities like the National Office of Electricity and drinking Water (ONEE) in managing their infrastructure projects. It also reduces reliance on public guarantees,promoting a more sustainable and efficient financial ecosystem.
The Al Wahda project serves as a beacon of progress, demonstrating Morocco’s commitment to both sustainable development and innovative financial solutions. Its success is expected to inspire other public and private entities to explore similar models, contributing to the modernization and growth of Morocco’s financial sector.