Improving Benin’s ability to meet its energy needs, particularly ensuring adequate access to electricity, is a critical goal of the Beninese government to support economic development and foreign investment. Benin’s current peak electricity demand of 250 MW is expected to rise to 500 MW by 2025 as a result of industrial investment at the Glo-Djigbé Industrial Zone located two hours north of Cotonou. While Benin currently depends on Nigeria and Ghana for nearly half of its electricity consumption, additional domestic generation capacity (both IPP and publicly-owned) and the operationalization of the West Africa Power Pool (WAPP) regional power market are expected to make additional capacity available by 2024.
As Benin seeks to both increase and diversify its electric power generation capacity, opportunities in thermal, solar, wind, and other generation could be attractive to investors. Benin’s government is pursuing independent power producer (IPP) investment, as well as using domestic revenue and donor resources to fund the construction of additional power generation capacity to meet expected industrial, commercial, and residential demand during the next decade.
The U.S. Government is supporting Benin’s electric power sector through a $391 million MCC compact that will close in June 2023. The compact has supported power sector policy reforms to ensure tariffs reflect costs, attract private capital into renewable power generation, and strengthen regulation and utility management. Infrastructure funded by the compact includes 18 substations and nearly 900 kilometers of new or upgraded high and medium-voltage power lines. The compact is also supporting off-grid electrification through mini-grid construction and the provision of solar home systems.