In emerging market news this week, Quantum Fuel Systems Technologies Worldwide, Inc. (NasdaqGM: QTWW) recently issued a press release announcing that its German solar photovoltaic partner, Asola, has signed an exclusive agreement to establish a joint venture in Morocco to help support the growing demand for renewable energy in Northern African countries. The agreement is intended to ensure the availability of solar photovoltaic modules. To accomplish their goals, Asola and Moroccan partner, Majdaline Holding, will implement a solar module manufacturing facility in Casablanca. The facility will have an initial solar module production capacity of 30 MW (megawatts of peak power), with a potential to generate revenues in excess of $100 million annually.
What is the current state of the North African economy? According to the African Development Bank, the GDP of Morocco accounts for 7% of the African continent. Morocco is the fifth economic power of Africa with a 2006 GDP of $152.5 billion at PPP ($58.1 billion at official exchange rates), after South Africa, Egypt, Algeria and Nigeria.
Many developing nations are beginning to realize the value of establishing renewable energy sources either for their own energy needs or for export, particularly in light of tightening oil supplies and oil’s unpredictable price fluctuations. Morocco is no exception. According to the release, Asola has the backing of the Government of Morocco for the joint venture and both parties expect their collaboration to continue for the long-term. Some OPEC countries in the region, such as Algeria, are moving in the direction of using renewable energy technologies as a means to meet the demands they receive for oil exports. Africa has some most abundant sunshine on Earth, which means it may be exporting solar energy over oil one day.
Quantum and Asola have also reportedly been ramping up solar module production capacity in Germany and planning expansions into Korea and Italy as well. The two companies have procured 155 MW of high-efficiency silicon photovoltaic solar cells through a long-term supply agreement with Ersol Solar Energy AG; this contract coupled with additional supply contracts with major suppliers provides a steady supply of solar cells. Quantum reports that resulting sales generated by the Ersol agreement and other supply agreements are anticipated to exceed US$600 million for both Quantum and Asola. Quantum owns a 25 percent stake in Asola and will hold controlling interest in the joint venture.