Morocco-UK Submarine Cable Project Costs Surge to $30 Billion, Exceeding Initial Estimates

Initially estimated at 20 billion pounds sterling (22 billion dollars), Xlinks, the project to build the 3,800 km submarine cable connecting Morocco to the United Kingdom, should amount to between 22 and 24 billion pounds sterling, or between 27 and 30 billion dollars. This emerges from the latest update from Xlinks First, the company leading the project, on the project and the first communication on the cost and price orientations made public on Tuesday. As for the price range of the electricity transmitted by this cable from Guelmin-Oued Noun, in Morocco to the United Kingdom, it would vary between 70 and 80 pounds sterling/MWh, an increase of nearly 67 £ compared to the initially planned price of 48 £.

Several factors explain this revision of costs. Xlinks First cites the "significant" pressure on the cost of all energy projects. "Our new guidance on the strike price of the Morocco-UK Power project is broadly in line with what we are seeing in the market as a whole and is driven by the impact of macroeconomic factors," explained James Humfrey, CEO of Xlinks First. The company also highlighted the impact of global events on the supply chain, which "accounts for about 60% of the change, due to a multitude of factors, including the general increase in the cost of raw materials and energy, as well as growing global demand for renewable energy." Another factor: "40% of the change relates to direct macroeconomic effects," the company added.

The project to build the 3,800 km submarine electric cable will connect Morocco and the United Kingdom. Xlinks First will build a 10.5 GW power plant (7 GW for solar and 3.5 GW for wind) in Morocco. This project will be able to provide the UK with 8% of its electricity needs. According to the British company’s calculations, this facility will provide 3.6 GW of reliable and clean electricity to the British for an average of 20 hours a day.