VZCZCXRO4113
RR RUEHLMC RUEHROV
DE RUEHDJ #0337/01 1101304
ZNR UUUUU ZZH
R 201304Z APR 09
FM AMEMBASSY DJIBOUTI
TO RUEHC/SECSTATE WASHDC 0303
INFO IGAD COLLECTIVE
RHMFISS/CJTF HOA
RUEHDJ/AMEMBASSY DJIBOUTI
RUEHLMC/MILLENNIUM CHALLENGE CORPORATION WASHINGTON DC

UNCLAS SECTION 01 OF 02 DJIBOUTI 000337 
 
SIPDIS 
SENSITIVE 
DEPARTMENT FOR AF/E 
OES 
AND E/EEB 
LONDON 
PARIS FOR AFRICA WATCHER 
CJTF-HOA FOR POLAD 
ADDIS ABABA FOR REGIONAL ENVIRONMENT OFFICER 
 
E.O. 12958: N/A 
TAGS: ENRG ECON EINV BEXP SENV DJ
SUBJECT: DJIBOUTI: U.S. COMPANY TO INVEST IN WIND, SOLAR, AND 
DESALINATION 
 
REF: 08 DJIBOUTI 859 
 
¶1. (U) This message contains business proprietary information. 
Please handle accordingly. 
 
¶2. (SBU) SUMMARY.  Maple Indian Ocean Resources (MIOR), the 
Djiboutian-registered affiliate of a U.S. company, signed 
agreements with the GODJ March 21 to begin development of two 
renewable energy projects in Djibouti.  MIOR plans to build a 
40MW wind power installation at Djiboutis Lac Assal, as well 
as a solar-powered desalination plant near Djibouti City with 
an initial production capacity of 40,000 cubic meters per day. 
MIOR estimates that its total initial investment in the two 
Djibouti projects will reach USD 200 million.  Local press 
gave prominent coverage to the GODJ-MIOR agreement, which 
highlights the GODJs public commitment to increase access to 
reasonably-priced electricity and clean water.  END SUMMARY. 
 
----------------------------------- 
MAPLE ENERGY BACKGROUND INFORMATION 
----------------------------------- 
 
¶3. (SBU) Maple Energy PLC (ME) was established in the U.S. in 
¶1986.  ME has completed several energy projects in Peru, 
including a gas-to-power-to-liquids project at Aguaytia in 
1996, and a sugar cane-to-ethanol project at Chira River in 
¶2005.  ME was listed on the London Stock Exchange/AIM and the 
Lima Stock Exchange in 2007.  Maple Indian Ocean Resources 
(MIOR) is a new corporate entity, intended to specialize in 
renewable energy development.  MIOR is registered in the 
British Virgin Islands (as Maple Renewable Resources 
Corporation, MRRC) and in Djibouti (as MIOR).  Other MRRC 
affiliates are pursuing projects in Morocco, Senegal, Kenya, 
and Tunisia.  According to ME, MRRCs first projects are 
likely to be through MIOR/Djibouti. 
 
--------------------------------------- 
PLANNED WIND, SOLAR, AND DESAL PROJECTS 
--------------------------------------- 
 
¶4. (SBU) In June 2008, MIOR signed a memorandum of 
understanding (MOU) with the GODJ Presidency, and three joint 
venture agreements with the Ministry of Finance.  According to 
ME Board Chairman Jack W. Hanks, the GODJ currently holds a 10 
percent stake in the joint ventures.  However, the GODJs 
stake is carried, and the GODJ will not be required to put 
up any initial financing for the planned projects.  MIOR 
envisions three main projects for Djibouti: 
 
--WIND POWER AT LAC ASSAL:  MIOR intends to install a wind 
power project near Djiboutis Lac Assal salt lake.  (NOTE. The 
Lac Assal area is also the site of a planned GODJ-Iceland 
geothermal project (reftel).  END NOTE.)  MIORs wind power 
project would initially produce 40MW, with a gradual increase 
in production up to a maximum of 200MW.  Two initial sites are 
planned for Gali Maaba (30MW) and the Ghoubet (10MW).  A pre- 
feasibility study for the wind project was completed in 
February 2009.  There is no existing transmission line from 
the Lac Assal area to the population centers around Djibouti 
City; MIOR is currently evaluating several options for how to 
link the proposed wind sites to the currently under- 
construction 220KV Djibouti-Ethiopia electricity 
interconnection.  According to ME Board Chairman Hanks, the 
French company Vergnet Group will supply wind turbines to 
MIOR, and has agreed to set up a warehouse and maintenance 
facility in Djibouti and to train Djiboutian workers to 
service the turbines. 
 
--SOLAR POWER AND DESALINATION: MIOR also plans to build a 
solar-powered desalination plant at the village of Douda, some 
10km outside of central Djibouti City.  This plant will use 
Concentrated Solar Power (CSP), a parabolic trough system, and 
reverse osmosis technologies to produce an initial 40,000 
cubic meters/day of water.  Hanks said that in order to begin 
water production more quickly, MIOR might choose to use diesel 
power initially before moving to solar.  Eventually, the plant 
is intended to increase production to 100,000 cubic 
meters/day.  MIOR has also agreed to provide an additional 6MW 
of power to Djiboutis National Office of Water and Sanitation 
 
DJIBOUTI 00000337  002 OF 002 
 
 
(ONEAD), and to manage an existing 51 ONEAD water wells.  A 
pre-feasibility study for the desalination plant was completed 
in February 2009. 
 
--WASTE WATER MANAGEMENT PLANT: In the longer term, MIOR also 
intends to work with the GODJ to build a waste water 
management plant.  However, Hanks said that MIOR would fist 
concentrate on its wind, solar, and desalination projects, and 
that there were no concrete plans yet for a waste water 
management component. 
 
¶5. (SBU) Hanks reported that MIOR concluded initial offtake 
agreements with the GODJ March 21, including a water purchase 
agreement with ONEAD, and a power purchase agreement with EDD 
(Djibouti Electricity, the GODJs electricity parastatal). 
MIOR estimates that the total initial investment for the wind, 
solar, and desalination projects will reach USD 200 million. 
Hanks said that MIOR intends to raise this amount through 
several forms of project financing, and will seek Multilateral 
Investment Guarantee Agency (MIGA) guarantees.  MIOR estimates 
that the two main projects will likely generate approximately 
1,000 jobs for Djiboutians.  According to Hanks, the total 
estimated construction timeline is 18 months for the wind 
power project, and an additional 6-9 months for the solar- 
desalination project 
 
-------------------- 
LOCAL PRESS COVERAGE 
-------------------- 
 
¶6. (U) La Nation, Djiboutis state-run French-language 
newspaper, gave prominent coverage to the MIOR-GODJ 
agreements.  In an interview published March 26, EDD Director 
General Djama Ali Guelleh noted that the observed wind speeds 
at the proposed sites were well above what would normally 
indicate a lucrative project.  Guelleh said that the next step 
for the wind project would be a one-year feasibility study to 
test the wind strength more thoroughly, using 70m pylons. 
Then, he said, the two parties would have to agree on tariff 
structures.  Guelleh gave a slightly longer estimate for the 
construction period, citing a potential start date for wind 
power production in 2013.  Guelleh also said that the GODJ was 
aiming to contribute 35 percent of the initial investment in 
the project. 
 
¶7. (SBU) COMMENT.  Djiboutis Minister of Energy publicly 
hailed the GODJ-MIOR agreements as part of the national 
strategy to develop plentiful, well-priced, and secure 
energy sources.  GODJ officials and private sector leaders 
routinely cite energy as one of the main constraints to 
development in Djibouti.  While this project, like other 
renewable energy initiatives in the works, may take some time 
to come to fruition, the GODJ remains hopeful that Djiboutis 
renewable energy riches will translate both into accelerated 
economic growth, and into greater access to basic services for 
the population at large.  END COMMENT. 
SWAN