San Giorgio Group Case Study: Ouarzazate I CSP

The Ouarzazate I CSP project in Morocco utilizes a public-private partnership (PPP) model and significant concessional financing from international financial institutions (IFIs) to overcome the commercial unviability of CSP technology. The project is designed as the first phase of a larger portfolio to drive down costs and eventually enable renewable energy exports to the European Union. Key success factors include the creation of the Moroccan Agency for Solar Energy (MASEN), strong donor coordination, and a risk-sharing framework that allocates operational risks to private developers and revenue risks to the public sector.

• CSP technology is currently not commercially viable in the MENA region, partly because heavy fossil-fuel subsidies distort energy prices and create a competitiveness gap against carbon-intensive alternatives.
• The Ouarzazate I project relies on a public-private partnership (PPP) where the private developer assumes construction and operational risks, while the Government of Morocco bears the electricity market and revenue risks.
• 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.
• The project's financial viability is supported by a blended interest rate for IFI concessional financing of approximately 3.1 percent, significantly lower than a commercial rate of 9 percent.
• To achieve long-term commercial viability and scale, the CSP portfolio will likely need to transition from public subsidies to higher market revenues, specifically through exports to the European Union.
• The Moroccan Agency for Solar Energy (MASEN) serves an innovative role as both an equity investor (holding a 25 percent stake in the Solar Power Company) and the power purchaser (off-taker).
• The project aims to foster local economic development by requiring private developers to include local content valued at 30 percent of the plant's capital costs in their bids.
• The project is expected to generate environmental benefits, including CO2 savings of approximately 240 kt per year.
• A critical challenge for scaling the portfolio is the 'chicken or the egg' dilemma: commercial viability requires early projects with high public investment, but scaling up requires the very commercial viability that only comes after such projects are established.

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} }