The African Development Bank (AfDB) has approved a loan of €80mn to finance the strengthening of electric power grid interconnections project in Morocco.

The project aims to improve the security and reliability of the energy supply system and reduce the country’s energy bill.

Its objective is to increase the capacity of electric power interconnections between Morocco and its two neighbours, Algeria and Spain by doubling the transit capacity of the Morocco’s interconnection with Spain from 700MW to 1,400MW and by increasing the one with Algeria, from 400MW to 1,700MW.

The project concerns the construction of 670 km of very high voltage (VHV) 400kV lines and 60km of high voltage (HV) 225kV lines ; the laying of 28 km of 400kV submarine cables between the Fardioua (Morocco) and Tarifa (Spain) stations ; the construction of three new 400/225kV substations at Mediouna (Casablanca region), Toulal II (Meknes region) and Bourdim (Oujda region) and the extension of the 400/225kV and 60/22kV substations of Melloussa (Tangiers region); the construction of four new 225/60kV substations at Khourigba (Chaouaia region), Tensift II (Marrakech), Agadir and Tiznit in the south of the country; the extension of the 225kV substation of Chichaoua (Marrakech region) and the construction of 175km of 225kV power lines between Chichaoua and Agadir and finally the assembly of 1,219km of a fibre optic cable network on the existing 400 kV, 225 kV and 60kV lines.

The project will contribute to strengthen regional integration and cooperation in the energy sector through the increase of electricity exchanges between the Maghreb countries and Europe. Furthermore, it will contribute to the liberalisation of the electricity market in Morocco as well as the improvement of the competitiveness of Morocco’s industry and economy by enhancing the electric power supply system at least cost.

The project is co-financed with the European Investment Bank (BEI) and the French Development Agency (AFD). The ADB loan will be used to finance 34% foreign exchange costs of the project whose total costs is estimated at UA237.50mn, equivalent to €318,22mns.

Bank Group operations in Morocco started in 1970. To date, the group has committed a total amount equivalent to US$3.12bn on 69 operations. Of this amount, about US$2.66bn has been disbursed.

* 1UA = €1.33986 as at November 2002
* 1UA = US$1.32163 US$ EU as at November 2002
* 1 UA = Dirhams 14.0681 as at November 2002

Description: construction of 670km of 400 kV power lines and 60km of 225Kv lines; laying of the second undersea 400kV link between Morocco and Spain; construction of 3 x 400/225kV Substations and the extension of an existing substation; strengthening and extension of the existing 225kV and 60kV grid; supply and assembly of a fibre optic network; mitigative environmental impact measures; engineering design, supervision and control services.

Beneficiary: Kingdom of Morocco

Executing agency: Office National de l’Electricit é, 65, Rue Othman Ben Affan, 20.000 Casablanca, Morocco

Tel.: (212) 22-66-80-80; Fax: (212) 22-22-00-38

Estimated starting date: January 2003

Duration: Four years

Procurement: International competitive bidding for equipment and works.