Mali is endowed with plentiful solar and hydro potential, and energy sector development remains a priority for the Malian transition government. Current power production comes from a roughly equal mix of diesel and hydraulic sources and is less than 700 MW of capacity for a population of approximately 20 million, severely inadequate to meet Mali’s growing need. Energie du Mali (EDM), the state-owned electric utility, is poorly managed and heavily subsidized by the government and regional multinational banks, as the relatively high price of its electricity (average $0.17/kWh) is insufficient to cover the cost of production and distribution ($0.24/kWh). Brownouts are common, as electricity demand grows at about 12 percent per year, far outpacing piecemeal increases in supply. Many companies resort to onsite generators to power their activities, though this is an expensive solution that is difficult to execute at scale. The unreliable electrical grid is the main barrier to the development of the mining sector, one of Mali’s most important industries.
To address these challenges, the transition government is working to expand electricity supply, including off-grid solutions in rural areas, and encourage investment in the energy sector to stimulate the economy. EDM, which operates in cities, is authorized to buy electricity produced by private companies. The Malian Agency for Rural Electrification (AMADER) grants concessions to villages allowing the private sector to produce and distribute electricity. Mali is a partner of Power Africa, a market-driven, U.S. government-led public-private partnership (PPP) aiming to double access to electricity in sub-Saharan Africa. It offers tools and resources to private sector entities to facilitate doing business in sub-Saharan Africa’s power sector.
Opportunities to develop renewable energies, including hydro, solar, and wind, are abundant but underutilized. The Agency for Renewable Energies (AER) was created to promote the large-scale use of renewable energies in Mali. The government is working to diversify its energy mix by moving away from expensive thermal sources and increasing renewable energy production, particularly solar.
The government is actively looking for partnerships to develop its underutilized renewable resources, including an estimated 800 MW of hydroelectric power, potentially unlimited solar energy, and over 300 MW of biomass. The government also seeks to increase the production capacity of EDM, improve the reach of rural electricity grids, and improve management of the entire chain of production. In 2016, Mali passed a law governing PPPs and in early 2017 an office was established to implement the law, expedite PPPs (including energy projects), and ensure PPPs are successfully enacted. While energy represents a particularly attractive sector for foreign investment, project implementation has been slow and U.S. firms have often faced frustrating delays.
- Embassy Bamako’s Commercial Section: BamakoEcon@state.gov