ONE-Rural Electrification and Smart Metering

Location:

Morocco

Project number:

44057

Business sector:

Power and energy

Notice type:

Public

Environmental category:

B

Target board date:

29 Jan 2013

Status:

Repaying

PSD disclosed:

05 Sep 2012

Translated version of this PSD: French

Project Description

The EBRD is considering providing a loan to the Office National de l’Electricité (“ONE”) of Morocco. The sovereign-guaranteed senior loan of up to EUR 60 million would finance rural electrification and smart metering. The remainder of the project costs will be met by ONE.

Morocco’s rural electrification programme was launched in 1996 and has resulted in an increase in the rural electrification rate from 22 per cent to 97 per cent in 2010. The next phase of the rural electrification programme aims to connect 1,500 remote villages to the country’s electricity network.

Decentralised renewables have not been deployed in Morocco yet pending adoption of the necessary legal and regulatory framework and further development of the low and medium voltage infrastructure. The introduction of smart metering will prepare for the deployment of decentralised renewable generation.

Transition Impact

Demonstration of new replicable behaviour and activities: The Project will be demonstrative in two ways:

(i) it will initiate the smart meter installation needed for the deployment of decentralised renewable energy generation, and

(ii) it will establish Morocco as a model for the best rural electrification techniques. This will have a positive impact on preparation for decentralised solar in Morocco and on rural electrification in countries beyond Morocco.

Setting standards for corporate governance and business conduct: As this is the first time the Bank will work alongside an energy player in Morocco, the Bank will be in a position to contribute to promoting best environmental practices in the sector.

The Client

ONE is the state-owned vertically-integrated electricity company. It fulfils the single buyer role for electricity. It holds a monopoly in transmission and is responsible for electricity distribution covering 55 per cent of consumers.

ONE also owns and operates 4,522 MW of installed capacity (ca. 72 per cent of Morocco’s total installed capacity), producing 10.5 TWh of electricity in 2010 (ca. 46 per cent of domestic electricity production).

In 2012, ONE combined with the state water utility company, Office National de l’Eau Potable (“ONEP”), into a joint holding company (Office National de l’Eau et de l’Électricité, or “ONEE”), which will be the legal Borrower for the EBRD loan.

EBRD Finance

Sovereign-guaranteed senior loan of up to EUR 60 million.

Project Cost

EUR 77 million.

Environmental Impact

The Project is categorised B in accordance with EBRD’s 2008 Environmental and Social Policy.

Phase IV of the rural electrification programme (PERG IV), which consists of the construction of new low- and medium voltage distribution lines, is expected to result in significant social benefits for about 1,500 villages. Electricity distribution has limited environmental issues, which can be readily assessed and mitigated. Some potential adverse social impacts may be associated with temporary land takes and damage to crops or other assets during construction, public safety, as well as connection costs and tariff affordability, notably for vulnerable groups. These impacts, however, can be readily identified, avoided or minimized, and mitigated with careful routing of the new distribution lines, adequate levels of stakeholder engagement, and an affordability assessment.

The currently available information is not sufficient to carry out a complete environmental and social (E&S) analysis of the Project, however the capital investment programme will not involve any high voltage transmission lines. Therefore, its implementation is likely to have limited adverse environmental and social impacts that can be avoided or mitigated by adhering to generally recognised performance standards, guidelines or design criteria. The potential impacts of the investment programme and the management of these impacts will be fully assessed based on the results of the associated donor-funded technical and E&S due diligence.

ONE's corporate E&S management systems and practices will need to be better understood by the Bank. The environmental and social due diligence will involve a site visit and meetings with the Client. The goals will be to gather information about (i) the extent of the Project’s potential E & S benefits and impacts, (ii) the Company's current operations, past construction activities, and E&S policies, (iii) capabilities and management systems for compliance with the PRs, and (iv) past experience of cooperation with IFIs in earlier rural electrification efforts. An independent consultant will be engaged to carry out the E&S due diligence as part of a donor-funded project preparation. An Environmental and Social Action Plan (ESAP) will be prepared to address the issues identified during the due diligence. A Stakeholder Engagement Plan (SEP) will be agreed with the Client for project implementation.

Project preparation and E&S due diligence are currently ongoing, and this PSD will be updated once the results of the due diligence are known.

Technical Cooperation

Two TC projects are expected to accompany this Project. The first will be for the project preparation in terms of technical, environmental, economic and social due diligence. The second will be a thorough assessment of the effects of the PERG (Moroccan rural electrification programme) from the social, economic and environmental perspectives.

Procurement or tendering opportunities

Visit EBRD Procurement
Enquiries: Tel: +44 20 7338 6794; Fax: +44 20 7338 7472, Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168; Fax: +44 20 7338 7380
Email: projectenquiries@ebrd.com

 

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

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Text of the PIP

Project Complaint Mechanism (PCM)

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Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.