IFC and OCP Group partner to build solar plants, green fertilizer production in Morocco
IFC and OCP Group, the world's largest phosphate-based fertilizer producer, today announced a partnership through a landmark green loan to build four solar plants to power OCP's Morocco operations to reduce the company's carbon footprint and help green its fertilizer production.
Under the agreement, announced during the International Monetary Fund-World Bank Group Spring Meetings in Washington D.C., IFC will provide OCP with a green loan of €100 million to build the solar plants in the mining towns of Benguerir and Khouribga, home to Morocco's largest phosphate reserves. The plants will have a combined capacity of 202-Megawatt peak (MWp) and will supply clean energy directly to OCP's operations.
The project will be implemented by OCP Green Energy SA, a wholly owned OCP subsidiary established in 2022 to develop the company's renewable energy generation activities. A green loan is a form of financing where funds are made available to finance eligible green projects which contribute to environmental objectives such as climate change mitigation or climate change adaptation. The project is part of OCP's $13 billion Green Investment Program, which aims to increase its green fertilizer production and transition its operations to green energy by 2030 and allow OCP to replace its electricity consumption with green energy, avoiding about 285,000 tons of carbon dioxide equivalent (tCO2e) annually.
"This ground-breaking agreement underlines our 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," said OCP Group Chairman and CEO Mostafa Terrab. "Securing this loan is a 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."
"We are proud to support OCP's efforts to reduce emissions and green fertilizer production in Africa," said IFC Managing Director Makhtar Diop. "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 solar plants will provide a cost-effective source of energy, contributing to OCP Group's overall competitiveness by increasing production of low-carbon fertilizers. OCP plans to source 100 percent of its electricity needs through wind, solar and cogeneration by 2027. The plants will also support the resilience and diversification of Morocco's electricity sector.
The project supports IFC's mandate to help emerging countries access private capital to implement climate-friendly projects, decarbonize their economies, and adapt to a warming planet. IFC 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 and working with financial institutions to finance projects that support climate change mitigation and adaptation. The project also 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 leverage the expertise of INNOV'X, an innovation engine launched by Mohammed VI Polytechnic University in 2022 dedicated to building innovative and sustainable businesses and ecosystems with strong local impact.
In 2021, IFC provided OCP with a $100 million loan to support its subsidiary, OCP Africa, to increase the availability of fertilizers and improve training on practices on local soils and crops in Côte d'Ivoire, Ethiopia, Ghana, Kenya, Nigeria, Senegal, and Tanzania. IFC also provided advisory services to help OCP obtain EDGE (Economic Dividends for Gender Equality) certification for gender equality in 2022.