Morocco to invest $ 10 bn in energy

Mar 10, 2009 01:00 AM

Morocco has announced plans to invest Dh 90 bn ($ 10.29 bn) in projects across the energy spectrum. It will build more power plants, expand oil storage capacity and step up exploration for hydrocarbons for the six-year period to 2015, said Amina Benkhadra, Morocco's energy minister.
"This plan links the government and the private sector to implement a strategy aimed at securing energy supply and diversifying energy sources at the right costs," he told a gathering of top government officials, bankers and executives.

Business leaders were worried Morocco might fail to produce enough power to meet the needs of an economy growing at an average 5.3 % in the past five years. Morocco's gross domestic product is expected to expand by 6.7 % this year, despite global economy downturn, from 5.8 % last year, according to government forecasts.
The government is also under pressure to cap the bill for energy, 97 % of which is imported. The costs strain its trade balance and test its capacity to avoid a wide budget deficit.

The value of energy imports soared to Dh 71 bn last year from Dh 53 bn in 2007 and Dh 21 bn in 2003, according to official figures which also showed the government allocated 23 bn to subsidise fuel.
"This strategy guarantees that Morocco's economy and population needs in energy are met all the time and throughout the county at the right prices," Benkhadra said.

Electricity consumption is expected to increase 7 %-8.5 % per year in the next 10 years from 5 % average in the past five years, officials said. Under this strategy, Morocco would double power generation capacity from its current 5,292 MW, at estimated costs of Dh 61.4 bn.
The government seeks to expand electricity generation from wind six times from 6,000 MW currently to bring the share of total generation power from winds to 12 % by 2015. Its strategy also calls for expanding oil and gas storage capacity with an investment of around Dh 3.0 bn.

The government seeks to spend more in exploration for gas and oil after a recent discovery rekindled hopes among energy officials of a possible big find in the future. In February, AIM-listed oil and gas exploration company Circle Oil has said it had made its third successful gas discovery in Morocco.
Morocco also plans to invest more than Dh 15 bn in modernizing oil and gas distribution networks and in energy efficiency. The scheme includes soft loans for transport firms and taxi owners to renew their fleets to trim oil consumption and reduce pollution in big cities, officials said. It may be noted that Morocco is the only North African state without oil of its own.

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