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Project Financing for Taza Onshore Wind Power Generation Project in Morocco
Supporting Japanese Company’s Participation in Renewable Energy Power Generation Business in Africa as part of QI-ESG

  • Region: Africa
  • Infrastructures
  • Environment
  • Overseas Investment Loans
  • Project Finance
December 23, 2019
  1. The Japan Bank for International Cooperation (JBIC; Governor: Tadashi Maeda) signed on December 20, a loan agreement in project financing*1 amounting up to approximately EUR 44 million (JBIC portion) with Moroccan company Parc Eolien de Taza SA (PETS), invested in by Mitsui & Co., Ltd., for the Taza onshore wind power generation project in Morocco. The loan is provided as part of JBIC's Global Facility to Promote Quality Infrastructure Investment for Environmental Preservation and Sustainable Growth (QI-ESG).*2 The loan is co-financed by Sumitomo Mitsui Banking Corporation, MUFG Bank, Ltd., as well as Moroccan commercial bank Banque Marocaine du Commerce Extérieur, and the total co-financing amount is approximately EUR 113 million. Nippon Export and Investment Insurance (NEXI) will provide the insurance for a part of the loan by the private financial institutions.

  2. For this project, PETS will construct, own and operate an onshore wind power generation plant with a total generation capacity of 87.21MW to be located in Taza in the northern area of Morocco. PETS will sell the generated electricity to Morocco's public electricity and water company, the Office National de l'Electricité et de l'Eau Potable, for 20 years following the completion of construction. This is JBIC's first financing for a renewable energy project in Morocco and also the first QI-ESG project in the African region.
      
  3. This project is in line with the energy policy of the country, as Morocco is aiming to raise the ratio of renewable energy to 52% of total capacity generated by 2030. Also, through supporting the renewable energy business in Africa where Japanese companies have limited business experience, this loan will contribute to maintaining and enhancing the international competitiveness of Japanese companies in this field.
      
  4. In its Export Strategy for Infrastructure System revised in June 2019, the Japanese government expressed its intention to promote expanding orders for infrastructure systems, including the design, construction, operation and management of infrastructure, as well as increasing investments in local businesses. In addition, based on the Paris Agreement, the Japanese government is actively pursuing a policy of responding to the need of host country for the export of low carbon infrastructure, including renewable energy, in order to lead global decarbonization efforts. This project is thus in line with these Japanese government policies.

  5. At the Seventh Tokyo International Conference on African Development (TICAD7) held in August 2019, high quality infrastructure investment for the industry diversification and strengthened connectivity in Africa was one of the important themes. With collaborations between the public and private sectors, the Japanese government plans to continue its support for the African region. At TICAD7, JBIC announced the renewal of its Facility for African Investment and Trade Enhancement (FAITH) by establishing FAITH3.*3 This project is the first renewable energy project that JBIC has committed under FAITH3.

  6. As Japan's policy-based financial institution, JBIC will continue to provide financial support to assist Japanese companies in developing their overseas infrastructure businesses by drawing on its various financial instruments and schemes for structuring projects as well as by performing its risk-assuming function.
     
Note
  1. *1 
    Project finance is a financing scheme in which repayments for a loan are made solely from the cash flows generated by the project.
  2. *2 
  3. *3 
    For more details on JBIC's approach to Africa, see Announcement on August 30, 2019.

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