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Capital Markets

Innovations in Islamic Finance 2015: Morocco Safi

$2.6 bilion IPP

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Advisers: Mizuho, SMBC, BTMU, Mitsubshi UFJ, SG, Crédit Agricole, BNP, UDB, Attijariwafa, BCP, Clifford Chance

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.

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