European bank considers funding for three Morocco hydro projects

The European Investment Bank (EIB) is considering a proposal to provide 150 million euros (US$200.9 million) to Morocco for construction or extension of two pumped-storage projects and construction of a third hydroelectric project by Moroccan utility Office National de l’Electricite (ONE).

The proposal, currently under EIB appraisal, would contribute to the total 335 million euro (US$448.6 million) program of ONE-Hydroelectric Projects II.

The program entails construction of the 300-MW Abdelmoumen pumped-storage project in the Agadir Region, extension of the 463-MW Afourer pumped-storage project at Bin El Ouidan Dam in Beni Mellal Province (HNN 3/13/07), and construction of the 33-MW Tillouguit hydroelectric project on the Assif Ahancal River, upstream from Bin El Ouidan. (HNN 11/3/06) It also includes installation of remote management systems at existing hydropower plants.

EIB said the objective of the program is to optimize ONE power generation and reduce production costs by storing off-peak power via the pumped-storage projects to meet the heavy load curve at peak times.

EIB said by substituting for fossil-fueled generation, the projects might be eligible to sell carbon emission reduction credits under the Kyoto Protocol to reduce greenhouse gases. It added that studies will be conducted to verify the program is in line with European Union environmental and social procedures.

ONE took bids in May for construction of a new upper reservoir to optimize the operation of Afourer, which began operation in March 2005. The 1.7 billion dirham (US$148.8 million) project was built by a consortium led by Alstom Power.

In 2006, ONE recruited consultants to perform an environmental impact assessment of Tillouguit, also spelled Tilougguit. With financial aid from Germany’s Kreditanstalt fur Wiederaufbau (KfW), ONE sought an environmental study of Tillouguit and an impact study of the rupture of Masterfane Dam.

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