The IFC will provide a landmark green loan of €100 million to build solar plants in the mining towns of Benguerir and Khouribga
OCP Group, the world’s largest phosphate-based fertilizer producer announced today a partnership with the International Financial Cooperation (IFC) to build four solar plants to power OCP’s Moroccan operations, reduce the company’s carbon footprint and make fertilizer production greener.
The two entities announced the partnership during this week’s “Spring Meetings” of the International Monetary Fund and World Bank in Washington DC.
Under the agreement, the IFC will provide a landmark green loan of €100 million to build solar plants in the mining towns of Benguerir and Khouribga, according to a statement from OCP. The two cities are home to some of Morocco’s vast phosphate reserves.
A “green loan” is a form of financing intended for environmental projects where benefits are assessed and measured against agreed-upon targets.
The four solar plants will have a combined peak capacity of 202-megawatt (MWp) and will supply green energy to power OCP’s operations. The project is set to be implemented by OCP Group Energy, an OCP Group subsidiary established in 2022 to oversee the group’s green transition.
The project is part of OCP’s ambitious green investment program. This year, the fertilizer manufacturer unveiled its $13 billion Green Investment Program, which aims to increase green fertilizer production and transition the company’s operational energy use to green energy by 2030.
The plan aims to replace OCP’s electricity consumption with green energy, averting about 285,000 tons of carbon dioxide equivalent (tCO2e) of annual emissions.
Commenting on the partnership, OCP Group Chairman and CEO Mostafa Terrab described the deal as “ground-breaking,” adding that it underlines the company’s commitment to the global agricultural transition.
“Investing in reliable and competitive renewable energy is a key pillar of OCP’s investment plan towards our ambitious targets for sustainable green fertilizers,” he explained.
Terrab further added that securing this loan is “testimony to the partnership we are building with IFC and the alignment of our institutions addressing the global challenges of food security and climate change simultaneously.”
On his part, IFC Managing Director Makhtar Diop said that the IFC is “proud to support OCP’s efforts to reduce emissions and green fertilizer production in Africa.”
Noting the relevance of the deal, Diop explained that “Climate change and food security are deeply intertwined. With this investment, we are helping build a food system for Africa and the world that is both more sustainable and more secure.”
The plants are expected to provide a cost-efficient source of energy while boosting OCP’s competitiveness by increasing the production of low-carbon fertilizers.
The project will bring the Moroccan company closer to reaching its target of sourcing 100% of its electricity needs from wind, solar, and cogeneration. The project will also support the resilience of Morocco’s electricity-generating sector.
The project is part of IFC’s mandate to help developing countries access capital to implement climate-friendly projects, decarbonize economies, and address the rising threat of climate change.
In a statement, the IFC stressed that it is “committed to growing its climate-related investments to an annual average of 35 percent of its own-account long-term commitment volume between 2021 and 2025.”
IFC further added that it is working with financial institutions to finance projects that support climate change mitigation and adaptation The partnership with OCP “aligns with IFC’s Global Food Security Platform, a $6 billion financing facility launched in 2022 to strengthen the private sector’s ability to respond to the food crisis and help support the sustainable production of food.”
The project will draw on the expertise of INNOV’X, an innovation engine affiliated with Mohammed VI Polytechnic University (UM6P), an institution dedicated to building innovative and sustainable businesses and ecosystems with strong local impact.
This is not the first time OCP Group partners with the IFC. In 2021, the IFC provided OCP with a $100 million loan to finance its subsidiary, OCP Africa, to make fertilizers more available, and provide training on practices relating to local soils and crops in Ivory Coast, Ethiopia, Ghana, Kenya, Nigeria, Senegal, and Tanzania.
IFC also worked with OCP in an advisory capacity to help the group obtain the EDGE (Economic Dividends for Gender Equality) certification for gender equality in 2022.
Source : Morocco World News
