A consortium led by Saudi International Company for Water and Power (Acwa) is close to win a contract worth at least $500 million to build a 160-megawatt concentrated solar power plant south of Morocco, an official source said on Wednesday.

'We are going to opt for the offer made by the consortium of Acwa,' the source, familiar with the discussions about the contract, told Reuters. The source asked not to be named pending an official announcement due later this week.

Acwa has teamed up with Spanish engineering firm Aries IS and TSK EE for the design, finance, construction, operation and maintenance of the plant near the southern city of Ouarzazate.

'(Morocco's solar energy agency) Masen will make the announcement over the weekend, either Friday or Thursday. The signing ceremony will be on Saturday,' said the source.

The announcement of the deal will coincide with the expected landing in Ouarzazate of solar energy plane Solar Impulse, which took off from Rabat on Wednesday after it completed last week the world's first intercontinental flight powered by the sun.

Officials at Masen were not immediately available for comment.

In addition to the Acwa-led consortium, two other groups have been involved in the final selection processes for the contract. They are:

- Abeinsa ICI, Abengoa Solar, Mitsui and Abu Dhabi National Energy Company

- Enel and ACS SCE

The contract for the 160-megawatt plant will be the first to be awarded by Masen under the so-called Moroccan Solar Plan that aims to attract investments worth $9 billion to produce 2 GW of solar power by 2020, which corresponds to 38 per cent of the country's current installed power generation capacity.

The plan will include five power stations, two of which are located in the disputed Western Sahara, and the other in Morocco, including Ouarzazate.

Facing an electricity demand that rises by an annual 7 per cent and a gaping trade deficit from heavy reliance on fossil fuel imports, Morocco also bets renewable energies would enable it to export electricity to energy-hungry trade partner, the European Union.

Last month, Masen's head Mustafa Bakkoury said the agency hopes to complete a 500-megawatt solar energy complex in Ouarzazate by 2015.

Masen will later launch tenders to build a 50-megawatt photovoltaic module and CSP towers of at least 50 megawatts, both of which are in Ouarzazate. – Reuters