San Giorgio Group Case Study: Ouarzazate I CSP

This case study by the Climate Policy Initiative analyzes the Ouarzazate I Concentrated Solar Power (CSP) project in Morocco. It examines how a public-private partnership (PPP) model, supported by significant international concessional finance and government subsidies, was used to overcome the high capital costs and commercial immaturity of CSP technology to establish a foundation for a larger regional solar portfolio.

• The Ouarzazate I CSP plant is a 125-160 MW facility using parabolic trough technology with three hours of molten salt thermal energy storage. It serves as the first phase of a larger 500 MW project and a broader strategic plan to develop a CSP portfolio in Morocco and the Middle East and North Africa (MENA) region.
• The project utilizes a public-private partnership (PPP) model where the Moroccan Agency for Solar Energy (MASEN) acts as both an equity investor (holding a 25% stake) and the power purchaser (off-taker). A private consortium provides 75% of the equity, estimated at USD 190 million, for an expected after-tax rate of return of approximately 13.6% to 14%.
• The Government of Morocco provides a critical viability gap subsidy, estimated at USD 60 million per year, to cover the difference between the price MASEN pays the generator and the price at which power is sold to the grid (via the Office National de l’Electricité).
• Risk is allocated based on the nature of the risk: the private developer bears construction, operational, and equipment failure risks, while the Government of Morocco and MASEN bear electricity market (revenue) and policy risks.
• The project aims to trigger long-term economic benefits, including the creation of a local CSP manufacturing industry. Projections for a 2GW capacity by 2020 suggest the potential for USD 4.6 billion in cumulated value add and up to 11,000 full-time equivalent jobs.
• Environmental benefits include expected CO2 savings of approximately 240 kt per year. The project also helps reduce Morocco's reliance on energy imports, which account for 97% of its total supply.
• Scaling the CSP portfolio to a commercially viable level will require reducing technology costs through economies of scale and securing higher market revenues, specifically through power exports to the European Union.
• Exporting power to the EU presents a trade-off: while it would reduce the financial burden on the Moroccan national budget, it would also decrease the amount of fossil-fuel electricity displaced domestically, thereby reducing local energy security and environmental benefits.
• The project's design incorporates lessons from previous Global Environment Facility (GEF) CSP projects in Egypt, Mexico, and Morocco, which struggled due to small scale, unsuitable business models, and a lack of local value chains.

APA

Falconer, A., & Frisari, G. (2012). San Giorgio Group Case Study: Ouarzazate I CSP. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2012/08/Ouarzazate-I-CSP.pdf

Chicago

Falconer, Angela, and Gianleo Frisari. San Giorgio Group Case Study: Ouarzazate I CSP. Climate Policy Initiative, 2012. https://www.climatepolicyinitiative.org/wp-content/uploads/2012/08/Ouarzazate-I-CSP.pdf.

Wikipedia

{{cite report |last1=Falconer |first1=Angela |last2=Frisari |first2=Gianleo |title=San Giorgio Group Case Study: Ouarzazate I CSP |publisher=Climate Policy Initiative |date=August 2012 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2012/08/Ouarzazate-I-CSP.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{falconer2012san, author = {Falconer, Angela and Frisari, Gianleo}, title = {{San Giorgio Group Case Study: Ouarzazate I CSP}}, institution = {Climate Policy Initiative}, year = {2012}, month = aug, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2012/08/Ouarzazate-I-CSP.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }