Safi Independent Power Project

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Safi Energy Company S.A. (SAFIEC) developed the greenfield Safi Independent Power Project (Safi IPP), a 1,360 MW coal-fired power plant located near the city of Safi in southwest Morocco, on a 30 year BOOT basis. The project included two ultlra-supercritical units of 693 MW each. SAFIEC entered into a power purchase agreement (PPA) with Morocco state power utility, ONEE, that ran for 30 years and was to be paid in local dirham, euros and US dollars, relating to the currency of the loans. The PPA was backed by a government support letter but not a full guarantee. SAFIEC was awarded the Safi IPP by Morocco state power utility/ONEE after an international competitive tender in 2010. SAFIEC made the lowest bid with a levellised electricity tariff of 1,053.66 Moroccan dirhams per MWh. The only other bidder was a consortium led by EDF. SAFIEC is owned by a consortium of GDF SUEZ S.A. (France) with 35% equity, Mitsui Ltd. (Japan) with 30% equity and Nareva Holding (Morocco) with 35% equity. The project reached financial close in September 2014. The total project cost was estimated at USD 2.6 billion, financed through a USD 2.01 billion multi-tranche project financing and the remainder USD 565 million through equity. The sponsors achieved an 18-year tenor on the financing. The significant participation of Japanese export credit agencies Nexi and JBIC, supporting Mitsui’s equity investment, was vital to the deal’s success. The deal comprised of a USD 500 million local bank tranche, in dirham and swapped into euros during construction, a USD 900 million JBIC loan with USD 200 million in dollars and the rest in euros, a USD 500 million Nexi covered bank tranche in euros, a USD 70 million Islamic Development Bank tranche in euros and a USD 100 million international uncovered bank tranche in euros. The Japanese banks in the deal – BTMU, Mizuho, SMBC and Sumitomo Mitsui Trust Bank – have joined only the Nexi covered tranche. Credit Agricole, SG and Standard Chartered have taken small amounts of the Nexi tranche and have funded the international tranche. The local banks leading the dirham tranches are Attijariwafa and BCP. Construction on the plant was expected to be complete by 2018. The construction works for Safi’s new coal import terminal were launched by His Majesty the King of Morocco in April 2013. South Korea’s Daewoo Engineering & Construction was awarded the USD 1.8 billion EPC on the project. The electricity produced would then be sold to ONEE for 30 years under a Power Purchase Agreement.