Innovations in Islamic Finance 2015: Morocco Safi
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Innovations in Islamic Finance 2015: Morocco Safi

$2.6 bilion IPP


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Project finance lends itself extremely well to Islamic finance, since it is very easy to satisfy the requirement for solid, tangible underpinnings to a financing when one is building a power plant or a highway. There were several of note in our period of review – others included the Al Sharkeya Sugar Manufacturing financing in Egypt, and the Wa’ad Al Shamal Phosphate financing in Saudi Arabia .

But the standout deal was the Morocco Safi IPP, whose $2.6 billion financing was completed in September. This project – labelled by the Moroccan state, with understated urgency, as “ultra-supercritical” – brought together GDF Suez, Nareva and Mitsui for a coal-fired independent power project near the port of Safi.

Aside from being the first multi-tranche cross-border Islamic financing into Morocco, and supporting a vital 1386 MW coal-fired power project with 18-year funding, this stood out for its financing mechanism, with a structured tranche provided by the Islamic Development Bank.

Normally, in an Islamic project financing, a procurement/forward lease structure is used – one sees at least half a dozen of these most years.

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