Clifford Chance

Clifford Chance advises on first of its kind Islamic project financing structure for Safi IPP in Morocco

• US$2.6 billion ultra-supercritical power project in Morocco
• First multi tranche cross border Islamic financing into Morocco
• First time international Islamic financing structured in this manner

An international team of Clifford Chance lawyers across six offices has advised sponsors GDF Suez, Nareva and Mitsui on an 18-year financing of a US$2.6 billion, 1,386 MW (gross) ultra-supercritical coal-fired independent power project (IPP) near the port of Safi, Morocco. The transaction documents were signed over three days of meetings ending on September 18 and also included a ceremony in Rabat attended by Abdelilah Benkirane, prime minister of Morocco.

Part of the financing for the power project was provided via a structured Islamic tranche provided by the Islamic Development Bank. Due to the PPP nature of the project it was not possible to use the more traditional procurement/forward lease structure typically seen in Islamic project financings. Thus an innovative structure, which combined an istisna' arrangement with a wakala arrangement, was developed and implemented. The Islamic tranche represents the first multi tranche cross border Islamic financing into Morocco and the first international Islamic project financing structured in this manner.

"Clifford Chance is delighted to help create a new and innovative structure in Islamic project financing and thereby supporting a vital power project for the Moroccan state. This deal, and others we have worked on recently, demonstrates that Islamic finance is not only accessible in Africa but increasingly a popular method of sourcing funds" remarked Qudeer Latif, Global Head of Islamic Finance at Clifford Chance.

He added: "We take great pride in always being at the forefront of the legal market and use our specialist Islamic finance knowledge to structure the best possible solutions for our clients, whether it is the tried and tested or coming up with something completely new."

The Clifford Chance team advising on the Islamic aspects of the financing was led by Qudeer Latif (Partner, Global Head of Islamic Finance) with assistance from Shauaib Mirza (Senior Associate, Dubai).

Clifford Chance also recently advised on the Republic of South Africa's inaugural US$500 million sukuk issuance and the Republic of Senegal inaugural CFA100 billion (approximately US$200 million) sukuk issuance, the first major sukuk issuance by a sovereign in Africa.