Environmental Engineering Reference
In-Depth Information
4.3
Institutional PPPs to Successfully Set Up the Desertec
Concept
The amount of investment needed for the implementation of the Desertec Concept
illustrates that all other forms of contractual cooperation are overcharged. State
budgets in the MENA region are not capable to come up with the required sum of
around 400 billion euros, which also applies to a decentralized project. The only
functional solution is the application of a PPP. International PPPs also illustrate that
this form of cooperation can be very successful. In the field of energy production in
particular, the positive experiences are far-reaching, irrespective of the cultural and
religious background.
The best way to set the PPP up for the implementation of the Desertec Concept is
as an institutional PPP with a joint venture at the core. This means that the newly
formed SPV is a joint venture of the public and private sector. The setup as a
cooperation model will not be accepted by the private sector as it must provide most
of the money, but would only get max. 49.9 % of shares—i.e., not a majority. In the
case of a joint venture, the share allocation can be in any desired way.
Nevertheless, to secure government
s rights, the public party should get a
minimum amount of shares, which guarantees them minority rights. The set-up of
the joint venture must be according to national company laws, which in the case of
the Desertec Concept should be according to German law and GmbH should be the
legal form of the SPV. Moroccan law does not forbid a GmbH to operate within
Morocco. In addition the question of SPV nationality would be easily answered,
since the main seat theory (as prevailing in international law) would determine the
SPV
'
s nationality as German. Due to the manner in which numerous international
arbitration institutions, including the ICSID, go about determining nationality, it is
paramount that there is no dispute related to the Desertec Concept. The
unpredictable practice creates a risk. In today
'
s world, a US company is not
necessarily held by US citizens. It is quite common that shareholders stem from
all over the world. If a dispute resolution institution takes this into account to
determine investor nationality, the outcome might be surprising. Within the GmbH,
Morocco should have at least 25 % of all shares so as to have influential rights. This
is comparable to the Moroccan S.A.R.L., which is similar to the French S.A.R.L.
The SPV should conclude a BOT/concession with either Morocco or ONE
concerning the actual performance of service. It is very important that an investor
transfers the project to Morocco at the end of contractual period, since its main idea
is to provide energy for MENA countries. Furthermore, it offers new industrial
perspectives for MENA countries, as they can export energy after the contractual
period. During the contractual period, they have the concession fee as a payoff. The
combination of BOTs and concessions are a possible option within PPP frame-
works. In fact, they have already served as cooperation forms in different projects
all over the world. These also included energy production projects. Hence, it is
suitable for the Desertec Concept as well. Besides these two contracts, it is also
'
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