This is a best prospect industry sector for this country. Includes a market overview and trade data.
The Gambia’s electricity prices are among the highest in the world, which makes the use of alternative energy sources such as bio-diesel, steam, solar and the wind increasingly attractive. Furthermore, both the government and the National Water & Electric Company (NAWEC), a state-owned enterprise, have recognized a high demand and weakness in the transmission and distribution network. The major energy resources in Gambia are firewood, electricity, petroleum imports, and Liquefied Petroleum Gas (LPG). Due to the rapid population growth, demand for energy has far outstripped the ability of the state-owned utility, NAWEC, to supply the country. However, there have been some appreciable achievements in the provision of electricity services in recent years. The Gambia was selected by MCC’s Board of Directors as eligible for an MCC threshold program in December 2017. In 2019, MCC designed a Power Sector Program in The Gambia which will provide tools over a multi-year period for the Gambian government to improve the Gambia’s electricity sector.
The total installed electricity capacity of The Gambia is just over 100 megawatts (MW) with actual generation levels at approximately 40MW and excess demand levels at 50 MW. Nationwide, roughly half of the populations have access to electricity, leaving significant room for growth in the energy market to bolster economic activity throughout the country. The Gambian government’s 2018 Electricity Roadmap coordinates the electricity sector stabilization efforts at the public and private sector levels. In 2018, the Ministry of Finance and Economic Affairs (MoFEA) purchased 75 percent of NAWEC’s debt in an effort to make the utility company more attractive to foreign investors. Transmission and distribution remains the exclusive domain of the government but also where the largest challenges lie. In the rural urban divide only 13 percent of rural population and 71 percent of urban population have access to electricity. The Electricity Act of 2004 partially liberalized the energy market, essentially opening up electricity generation to independent producers. Currently, there are two independent power producers (IPP) operating in The Gambia, supplying approximately half of the power generated in the country.
In March 2019, NAWEC launched the clean energy program. The project includes €65 million under a 25-year long-term concessional loan from European Investment Bank and a €41 million grant from the European Union budget. The project will also enjoy €35.7 million support financing from the World Bank. The initiative is expected to generate 20MW of solar energy to serve 1100 rural schools and health centers.
In February 2018, Turkish firm Karpowership signed a two-year power purchase agreement with NAWEC and began operations in May 2018. Karpowership has been supplying 60 percent of The Gambia’s total electricity needs during this contract. The Gambian government and NAWEC are currently in negotiations about extending Karpowership’s contract, with the expectation that this contract will be extended.
As part of The Gambia’s Energy Roadmap, construction of the Organisation pour la Mise en Valeur du fleuve Gambia (OMVG) hydroelectric power plant in Soma began in February 2019. The 30KW energy plant is expected to provide 24-hour energy supply to communities in the North Bank Region. The OMVG project is progressing smoothly and the first stage of power supply will be available by the end of 2021. The energy roadmap as part of the NDP helped to mobilize over $400M in funding for the energy sector, to which the World Bank contributed $175M through national and regional operations. The World Bank is supporting the OMVG Regional Interconnection Project by interconnecting The Gambia to Senegal, Guinea, and Guinea Bissau.
The ECOWAS Regional Electricity Access Project (ECO-REAP) is a Regional Project funded by World Bank (IDA). It is a Series of Projects (SOP), and Phase 1 includes Mali, Guinea Bissau and The Gambia. The project was approved in December 2018 and became effective in June 2019, with a total approved value of $66 million USD.
The Gambia Electricity Access Project, which aims to increase the Gambian population’s access to affordable and reliable electricity services, was approved in October 2019 and became effective in March 2020, with a total approved value of $17 mission USD.
Renewable Energy: The government has established Gambia Renewable Energy Center (GREC) and seeks to collaborate with interested entities for the development of renewable energy through Research and Development. The government is encouraging use of other energy sources and at the moment utilisation of solar PV equipment is increasing in the country for both industrial, commercial and domestic uses (the country receives roughly 3,000 hours of sunshine yearly); use of biomass is also on the increase though it tends to be restricted to agricultural waste such as saw dust, groundnut shells, straw. Use of windmills for powering water pumps is also encouraged and is increasing throughout the country.
The Gambia is a signatory to the ECOWAS pledge to have a renewable energy account for 10 percent of the total energy generated in the country by 2020. Currently, 98 percent of the power generated and distributed by the National Water and Electricity Company (NAWEC) is sourced from fossil fuels. Several other options for renewable energy remain heavily underexplored.
Solar: The potential for solar energy is immense. The minimum daily solar production capacity of The Gambia is 4kWh solar power radiation per square meter. The National Development Plan (NDP) seeks to increase the share of renewable energy from 2 to 40 percent.
Wind: Wind energy is the only renewable source that has previously fed into the national grid, but this was short-lived due to mismanagement by the former regime. Most effective in the coastal region between the (winter/spring) months of January and May, wind is a highly variable source of energy.
Bio-fuel: Biomass based resources also offers an alternative source of energy. A large number of crops, such as groundnuts, have a huge residue-to-kernel ratio and could be a valuable supply source of bio-matter as fuel.
Hydro-power: The African Development Bank and the World Bank are completing a regional project implemented by OMVG that will provide hydro-electric power via dams in Senegal and Guinea to Senegal, Guinea, Gambia, and Guinea-Bissau. The project is ongoing in 2020.
There are several opportunities in the energy market with energy listed as a priority sector in the National Development Plan (2018 – 2022) and widespread support of International Financial Institutions and international development partners
Increase of generating capacity that is presently inadequate
Capital investment to improve the poor state of the transmission and distribution system which result in high technical losses and un-metered consumption estimated at about 40 percent
Improving efficiencies so as to reduce the extremely high cost of energy estimated at an average of U.S. $0.25/kWh
Encouraging green energy through use of solar and wind energy
- Ministry of Petroleum and Energy (MoPE)
- The National Water and Electricity Company (NAWEC)
- The Public Utility Regulatory Agency (PURA)