The European Bank for Reconstruction and Development (EBRD) has agreed to provide €10m loan to SDX Energy Morocco, a subsidiary of the UK-based energy company.
The loan will be used by SDX Energy to enhancing its upstream gas production and related gas transport infrastructure to Kenitra industrial zone customers.
This will facilitate in switching away from polluting fuel oil and is expected to result in the reduction of 20,000 tonnes in CO2 emissions per year.
EBRD stated that the investment will ease environmental burden in the Kenitra region by supporting the extension of gas supplies, reducing the use of fuel oil.
The city’s recent industrial growth has led to an increase in energy demand, especially in the newly-created Atlantic free zone, where the French car manufacturer Peugeot-Citroën is planning to start production in the coming months.
EBRD’s Natural Resources team, director Eric Rasmussen said: “I am proud that the EBRD is playing a key role in unlocking the potential of SDX’s domestic gas development project in the Gharb region. SDX’s project sets an example of how private sector investors can help raise safety and environmental standards in Morocco’s energy sector and reduce the country’s dependence on imported energy.”
SDX Energy president and CEO Paul Welch said: “We are very pleased to sign this Facility with the EBRD and we look forward to working with them as a long term financing partner in our business. As is widely acknowledged, the EBRD’s due diligence process is extremely stringent and the establishment of this Facility with them is a testament to the quality of SDX’s business, its processes and its environmental and social compliance in our countries of operation.”
EBRD has been investing in Morocco since 2012. Till date, it has invested more than €1.5bn across 36 projects in the country, in addition to forwarding more than €250m in trade facilitation credit lines with local banks.