By: Reuters

A $30 billion project to provide Germany with renewable energy from Morocco via what would be the world's longest intercontinental undersea power link is being held up by disagreements over structure and guarantees, four sources said. 

The project, Sila Atlantik, aims to connect Morocco and Germany via two high-voltage subsea cables able to deliver up to 5% of Germany's annual electricity demand.

The cables would run about 4,800 km (2,892 m) and be fed by up to 15 gigawatts of solar and wind installations in Morocco, with total infrastructure costing some $30 billion, according to the project developers.

European countries are seeking to expand such connections to improve energy security and reduce dependence on fossil fuels.

Sila Atlantik, a German company created for the project, was launched after the collapse of a similar proposed Morocco-UK renewable electricity link called Xlinks a year ago. 

But the project is now facing headwinds, with Moroccan authorities insisting on an intergovernmental agreement formally endorsed by Berlin to ensure long-term state backing, two Moroccan and two German sources familiar with the matter told Reuters.

Morocco also wants the connection to allow electricity to flow both ways, instead of an export-only option, the sources said, requesting anonymity as they were not authorised to speak publicly on the matter.

"Technically it is feasible, but economically it would be more costly," one German source said of a potential two-way link. 

Moroccan authorities had promised to devote around 150,000 hectares of land in the southern Guelmim-Oued Noun region to the Xlinks project, but have not yet approved the same allocation for Sila Atlantik, a senior official in the region told Reuters.

Sila Atlantik did not address specific questions about the discussions around the project but said it is "progressing in line with its technical, commercial, regulatory and financial roadmap."

"The project continues to assess the technical and regulatory options that will best support its long-term development," the company said in an emailed response.

Morocco's Energy Ministry did not reply to Reuters questions, but said by email that "regional integration is a key pillar of Morocco's energy transition strategy" and highlighted plans to deepen electricity links with other European partners.

Morocco currently operates the only electricity interconnection between Africa and Europe through Spain, which was critical in helping Madrid respond to a major power outage last year.

Another Morocco-Spain connection is being planned with capacity of 700 megawatts, while a Morocco-Portugal link currently under study could require investment of up to 735 million euros ($838 million), according to a document of electricity utility ONEE, seen by Reuters. 

A connection to France is also being planned. 

Morocco and Portugal are planning to list their proposed electricity link for consideration under the European Union's T-MED programme, which aims to mobilise up to 25 billion euros in investment for renewable-energy cooperation and cross-border electricity infrastructure.