Xlinks in talks to boost UK-Morocco project funding

Reuters/Youssef Boudlal

• CEO says talks represent a ‘significant step up’ in funding
• Changes in supply chain and inflation have pushed up costs
• Hope is to close funding rounds by end of 2024

British renewable power firm Xlinks is in talks to raise new funding for its proposed plan to build vast solar panel and wind farms in the Moroccan desert that could power more than seven million British homes by 2030.

Founder and CEO Simon Morrish said the talks represented “a significant step up in the level of funding”.

He wouldn’t comment on timelines for finalising the funding round, but said that costs on the project have now risen above the initial £18 billion ($20 billion) estimate.

“It’s a reflection of changes in supply chain, inflation and the exchange rate, but it still represents incredibly good value for money for the end-consumer and UK taxpayer,” he said. 

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Morrish added that more funding rounds are on the cards “sometime early next year” and that “hopefully we’ll get into financial close towards the end of 2024”.

“Latest figures are being discussed with the UK government,” he said. “It’s still a very attractive proposition.”

Xlinks had originally asked the UK government for a deal in which public subsidies would be used to guarantee a fixed rate for the electricity of £48 per megawatt hour. 

In contrast, the strike price for electricity supplied by the Hinkley Point C nuclear power plant in south-west England is £92.50. 

Earlier this week, Sky News reported that Abu Dhabi-listed energy company Taqa was in advanced talks to provide financial backing to Xlinks. Morrish declined to confirm this, adding that “the main thrust of the story is complete speculation”. 

He added that talks with another European country to develop a second similar energy project were proceeding and are “going very well”.

While Xlinks 2 is an entirely separate project from that announced for the UK, he previously told AGBI that it would be of a similar size, but did not confirm whether the second project would also source energy from Morocco.

Xlinks was named by the UK government last week as a project of interest in its energy blueprint, Powering Up Britain.

The paper said that the government should “secure energy supplies by ensuring that where the UK is dependent on imports, they are built on diversified sources of supply and relationships with strong, trusted partners and allies.”