The internationally rated leading-edge Jofr Lasfar facility was the country’s first independent power plant and the biggest private American investment in Morocco. It now provides a third of the nation’s electricity and has seen profits leap by 90 percent this year

PETER BARKER HOMEK Chief Executive Officer TAQA	LARRY DEWITT General Manager Jorf Lasfar Energy Co.

orf Lasfar is one of the best coal fire power plants probably on the planet,” says CEO of Abu Dhabi National Energy Company (TAQA), Peter Barker Homek. “We are extremely excited to have such a core investment in Morocco, and we look forward to even more investment here.”

The state-of-the-art $1.5-billion Jorf Lasfar power plant on Morocco’s Atlantic coast some 80 miles west of Casablanca is the largest independent power facility of its kind in Africa and the Middle East. Developed as a private sector venture under a build-transfer-operate arrangement in the mid-1990s as part of a government plan to open the energy sector to private investors in an attempt to meet growing demand, the plant now provides one-third of Morocco’s total electricity supply. Generated electricity is sold to the national electricity company, Office National de l’Electricité (ONE) under a 30-year purchase agreement.

TAQA acquired the Jorf Lasfar facility earlier this year from Michigan-based CMS Energy Corporation, who took over the plant in 1997 in a joint venture with Switzerland’s Asea Brown Boveri Ltd. The plant’s first two units were built by ONE in 1994 and 1995. The CMS venture expanded the plant with an additional investment of roughly $1.5 billion, financing the project through equity and reinvested cash from the two companies and a series of World Bank-backed loans from various international agencies. In addition to adding two additional 384MW units to bring the total installed capacity of Jorf Lasfar to its current 1,372MW, the CMS investment included port enhancements to facilitate the increase in coal shipments, an upgrading of the transmission lines from the power plant, and the installation of electrostatic precipitators to reduce particulate emissions in line with World Bank standards for coal-fired power stations.

TAQA’s 2007 acquisition of CMS Generation, the independent power production unit of CMS Energy (known best perhaps by its U.S. subsidiary Consumers Energy, Michigan’s largest utility and the fourth largest combination gas and electric utility in the U.S.), provides the Abu Dhabi firm with an additional 4,300 MW of generation capacity. It brings the company’s total production to 10,000 MW and operations across four new countries – Morocco, Saudi Arabia, Ghana and India.

The move deepens TAQA’s skills as a best-in-class independent water and power plant developer and operator. It also forms part of the company’s expansion strategy in the Middle East, North Africa, Europe, India and Pakistan. Formed in 2005, TAQA has implemented an aggressive international expansion in the past two years, including the purchase of BP Netherlands last year. It announced an increase in revenues of 90 percent for the first half of this year to $771 million, and has plans for an additional $4 billion in acquisitions for the next year, primarily in Canada where it will complete the purchase of the oil and gas exploration firm Pioneer Canada.

Listed on the Abu Dhabi Stock Exchange, TAQA is a global energy company with investment in power generation, CHP, desalination, renewable sources, upstream oil and gas, refining and retail, pipelines, services, structured finance and the creation, syndication and management of assets.

The company carries an Aa3 and A+ credit rating from Moody’s and Standard & Poor’s, respectively, and was recently presented Emerging Market Deal of the Year and Middle East Corporate Bond of the Year 2006 awards by EuroWeek. The CMS acquisition increases TAQA’s total assets to $31 billion, and is part of a long-term plan to reach $60 billion in assets by 2012.

“TAQA is a global company,” remarks Mr. Barker Homek. “We are currently in ten countries and we have a very active investment program. Morocco has very close historical relations with Abu Dhabi and we are very proud to participate in this market. We think that the growing power needs of Morocco, along with the construction and real estate boom, is bound to continue, and we are happy to help meet these power needs.”

He adds that TAQA is planning to participate in other areas in Morocco such as renewable energy sources, such as wind power. As the company provides 85 percent of Abu Dhabi’s water needs, desalination is also a possibility. “Water production is certainly an area we would be interested in getting into within Morocco, and indeed might form part of the Jorf Lasfar complex,” he comments, adding that talks are underway with government officials in Morocco about which shape the expansion at Jorf will take, and whether or not water should form part of that.

Such rapid expansion has presented its challenges for the company, according to Mr. Barker Homek, who says that managing integration and creating a corporate identity has included developing a line of understanding among its employees in Europe, North America, Asia and North Africa.

“We started as a domestic power company and in about eight months we went from that to being present in ten countries and having 2000 employees,” he explains. “The whole idea is to take the diverging corporate cultures because we are integrating BP’s culture, CMS Generation’s culture and Northrup’s culture into one company, and we want to develop the TAQA way of doing business. This revolves around operational excellence, performance excellence, environmental excellence and, indeed, employee development excellence.”

With offices in Abu Dhabi, London and The Hague, TAQA has strategic partnership alliances across the Gulf, Middle East, North Africa, Sub-Saharan Africa, Europe, Asia, Australia and the United States. Mr. Barker Homek says the company is always interested in forming new partnerships. “We have a whole portfolio of international partners that we are ready to do business with, so we would certainly be open to partnering any corporation from the U.S.,” he comments, adding that Morocco is a country with a great deal of potential for investors and boasts a good workforce.

The $1.5-billion Jorf Lasfar power plant is the largest of its kind in Africa and the Middle East.

With such strong 2007 results so far, TAQA is definitely a company worth watching. “We want to be delivering the extraordinary,” concludes Mr. Barker Homek. “We have had very solid returns for the first half of the year, and we expect even better returns for the end of the year. But it is not just financial. We have a very active corporate social responsibility program in every country where we do business. I expect the extraordinary from the leaders within TAQA, and we hope to contribute in an extraordinary way to the communities we operate in.”