Electrifying Senegal’s People and Economy

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The Emerging Senegal Plan (PSE) sets access and cost of power as primary areas of investment in order to make Senegal an emerging economy by 2030. Although the country boasts one of the highest rates of access to power across Africa, high cost of electricity hinders economic competitiveness and constrains social inclusiveness.

The PSE states three objectives regarding power access: perfect availability of energy in sufficient quantity and quality, electricity costs among the lowest in the sub region ($0.09-0.12/kWh) to support economic competitiveness and halving household electricity bills.

The Senegalese power generation market has been liberalized since 2004 and several independent power producers – as well as Société Nationale d’Électricité du Sénégal (SENELEC) – operate in Senegal, including GTI-DAKAR and South Africa’s power utility Eskom.

SENELEC, however, is the sole operator in charge of distribution and transport of electricity across the country. Following the restructuring, investment and equipment modernization, SENELEC reduced electricity cuts and brought that figure down to 24 hours in total in 2018, down from 95 hours in 2011. Every year, the company produces a surplus of 200 megawatts (MW) – approximately equivalent to the power needs of neighboring Mali – which is stored for potential future use or exports. Before 2014, the state-owned company was making losses and was subject to loans, leaving no room for reinvestment in infrastructure. In 2016, it reached a $52 million profit.

Such results were achieved through the PSE, launched by President Macky Sall, in which he aimed to make Senegal’s energy sector independent and self-sufficient. As part of the PSE, a priority of the plan was to make SENELEC financially strong and capable of investing in key infrastructure to expand capacity.

Since the launch of the plan in 2014, $3.5 billion has been raised through a mix of public and private partners. In 2016, the Plan Yeesal SENELEC 2020 was launched, aiming to make the company an engine of Senegal’s growing economy. As part of the plan, SENELEC held for the first time ever an initial public offering in January 2018, through the regional stock exchange Bourse Régionale des Valeurs Mobilières, hoping to achieve $52 million to fund its development plan.

The initial public offering was a major success as it mobilized over $66 million, due to the financial stability of the company, which reassured private individual investors. Improved financial strength has allowed large investments to increase capacity. In 2015, capacity totaled 510MW.

In 2019, cumulative capacity reached 1,300MW in the country, of which 200MW is solar. West Africa’s largest wind farm was launched in 2020, Taiba N’diaye, which will boast a 159 MW top capacity. These expansions have provided the country with comfortable reserves – around 200MW each year – and allows for export to neighboring Gambia. In addition, through increasing available power, the government was able to implement a long-awaited cost cut on the end-user price of electricity.

In Senegal, only 42% of rural households have access to electricity. According to the Ministry of Petroleum and Energy, the state is developing projects and programs, for which funding has already been mobilized, that aim to considerably improve the coverage rate, particularly in rural areas. One of the most important of these is the Emergency Community Development Program, dedicated to the development of basic infrastructure in rural areas: roads, drinking water and electricity.

Access to power is a major part of the PSE. Currently, foreign oil dominates the energy mix as almost 90% of electricity is produced from imported fuel. This translates to high prices, pollution and dependence on other states. Moving towards 2030 and development goals, Senegal wants to increase both the diversity of power sources, as well as economic efficiency.

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KHADIJA@AFRICAOILANDPOWER.COM