Burkina Faso has some of the most expensive electricity in Africa, with the cost of production at US$0.22-0.25 USD/kWh.
The reason for this expensive power is that the country has had limited experience with private sector development in the energy sector. To address this challenge, the government of Burkina Faso has set a bold national plan to encourage private-sector investment in the sector. The country is also moving towards liberalizing electricity generation and distribution.
As of 2020, Burkina Faso’s electricity access rate stood at 20 per cent and as part of its National Plan for Economic and Social Development, the country is seeking to increase the coverage to 80 per cent which will double the number of customers to 1 million.
The move will also see the country increase its installed capacity to 1,000 megawatts (MW).
By 2025, the West African nation is seeking to lower its cost of energy and increase the access rate to 95 per cent. Burkina Faso is also planning to increase installed capacity to 2,000 MW and begin exporting oil and gas to nearby countries.
In April 2017, the country adopted a new law that removes market segmentation and the single-buyer model. Effectively, this law liberalizes production and distribution. In the same year, Burkina Faso inaugurated the Zagtouli solar power plant.
Currently, the country has an installed capacity of 300 MW where diesel contributes 253 MW, hydro 32 MW and solar 33 MW.
Towards making universal access to electricity in Burkina Faso a reality, the West African country of Burkina will get a new large-scale renewable energy plant following an announcement made on March 15.
The new solar energy plant Located some 250km south-east of the nation’s capital city of Ouagadougou, near the town of Pâ, will supply all the electricity it produces to Burkina Faso’s national power utility, La Société National D’électricité Du Burkina Faso (SONABEL).
The Emerging Africa Infrastructure Fund (EAIF), a member of the Private Infrastructure Development Group (PIDG) is lending the project’s developer, Urbasolar SAS, 80 per cent of the capital needed for the construction of the new 30MW facility.
EAIF is the sole lender to the project, providing €29 million of the estimated €35.4 million development cost. Financial close (the transfer of funds from lender to borrower) is expected by the second quarter of the year.
Paromita Chatterjee, an Investment Director at EAIF’s managers, Ninety One, says that harnessing Burkina Faso’s sunshine to improve its future prospects will bring many benefits to the country and make an important contribution to fighting global warming.
She added that the project is a perfect example of how EAIF’s public-private partnership model can have lasting economic, social and environmental impacts while mobilising private capital and enterprise to create new infrastructure.
EAIF has now supported 20 renewable energy projects across Africa. It has invested US$350 million of loans to private sector developers, bringing Africa 825MW of clean, renewable energy.
Urbasolar president Arnaud Mine and the company’s West Africa Regional Head Emmanuel Kaboré said that their company is conscious of its role in developing this energy source in Africa, notably in Burkina Faso, where they already operate.
They said that Urbasolar’s conviction that the solar power sector offers solutions to numerous economic, environmental and social issues. Therefore, in addition to providing green energy, this project also includes a number of other measures such as education regarding solar technology, the provision of study grants and a microfinancing program for local women, as well as support for the healthcare system.
Dr Bachir Ismael OUEDRAOGO, Minister of Energy, Mines and Quarries in Burkina Faso said the project is meant to increase the country’s energy supply by promoting private investment through a public-private partnership.
He added that the government and the national energy utility, SONABEL, have reached the goal of generating 200 MW of energy via solar power plants by the end of this year.
EAIF’s experience in the renewable energy sector in Africa is a considerable asset for developers like Urbasolar. We are pleased to share our own values of Sustainable Development and to collaborate with EAIF on this project, which demonstrates our shared goal of long-term infrastructure development in rapidly developing regions, he added.
Burkina Faso has a population of nearly 20 million people where more than 40 per cent of people live below the poverty line.
The country has one of the world’s lowest rates of electrification. Because of a shortage of installed energy generation capacity, Burkina Faso needs to import electricity from neighbouring states. Urbanisation, structural changes to the economy and recent strong GDP growth have increased demand for energy.
Currently relying mainly on fossil-fuelled power stations, the country has embarked on a programme of attracting private capital and expertise to build renewable energy capacity. The Urbasolar project is one of the first of the new green energy plants. Around 280MW is expected to be commissioned over the next three years.
Urbasolar was selected as the developer following a competitive tender process run by SONABEL. The solar company will build and operate the plant and construction is forecast to be completed within 18 months.
Established in France in 2006, Urbasolar has installed over 650 PV plants and currently operates solar plants of over 900MW. Urbasolar is providing 20 per cent of the project’s capital. It is the majority shareholder in the Pâ facility. A minority stake is held by Project Production Solaire (PPS).
Founded as a specialist renewable energy and energy efficiency business in 2010 by a group of Burkinabé engineers, PPS operates in Burkina Faso as well as in Togo, Ivory Coast and Benin.
In July 2019, Urbasolar was acquired by AXPO, a Swiss utility and Switzerland’s largest producer of renewable energy.
Zagtouli is the biggest solar plant in West Africa and the first in Burkina Faso. It is located in the South-West of Ouagadougou.
The project was financed by the AFD and the EU.
This state-of-the-art power plant is able to produce enough energy to supply for 5 per cent of the country’s needs. For consumers, the price is approximatively divided by four in comparison with the current national electricity network in Burkina Faso.
The project is also beneficial for the environment.
Power connections between the cities around Ouahigouya (180km to the North of the capital) and Gorcy (140km to the North-West of the capital) have seen thousands of families connected to the girl which has greatly improved their lives.