This is a best prospect industry sector for this country. Includes a market overview and trade data.
The Government’s top energy sector priorities are to diversify energy sources and modernize, according to the Emerging Senegal Plan. Objectives include reducing energy costs through diversified energy sources, adding generation capacities to meet a growing demand, integrating with an emerging regional energy network, shifting from heavy fuel oil to domestic natural gas, and increasing energy access in rural areas. Due to dependence on expensive liquid fuels for 90 percent of power generation, Senegal has some of the highest generation costs in Africa. While electricity generation costs range from 34 to 38 cents per kilowatt hour, consumers pay roughly 24 cents per kilowatt hour with the difference covered by government subsidies. Comparatively, the average electricity tariff is 11 cents per kilowatt hour in Côte d’Ivoire, 6 cents in Nigeria and 9 cents in Ghana.
Senegal is a Power Africa focus country. Power Africa is a market-driven, U.S. government-led public-private partnership aiming to double access to electricity in Africa. It offers private sector entities tools and resources to facilitate doing business in Africa’s power sector.
After completing its first MCC compact in 2015, MCC signed a second five-year compact with Senegal in 2018 focused on strengthening the electricity sector. The compact aims to improve the transmission network in and around Dakar, increase electricity access in rural areas of the south and central regions, and improve the overall governance and financial viability of the sector. In January 2020, President Macky Sall signed a decree legally establishing the Millennium Challenge Account (MCA-Senegal II) and its Board of Directors. MCA-Senegal II is the GOS entity that partners with MCC to implement the $550 million MCC Senegal Power Compact. The five-year compact went into force on September 9, 2021.
The GOS promotes private sector involvement in electricity generation and distribution via concessions and licenses issued by an independent electricity sector regulator, the Commission de Régulation du Secteur de l’Electricité (CRSE). The GOS also aims to scale up rural electrification by transferring responsibility to service rural areas from Senelec — the national utility who previously held a monopoly in electricity generation, transmission, and distribution — to a dedicated rural electrification agency set up in 1999 as the Agence Sénégalaise d’Electrification Rurale (ASER).
Senegal is also committed to renewable energy resources, with renewables representing 30 percent of the power mix. In February 2020, President Sall officially inaugurated the first phase of the Taiba Ndiaye Wind Park, Senegal’s first utility-scale wind project and the largest in West Africa. Phase I’s 16 turbines began supplying 50 MW of electricity to Senegal’s grid in December 2019, and Phase II, in July 2021 added 108 MW, increasing the country’s electricity supply by 15 percent.
Senegal supports regional energy cooperation as a member of the West African Power Pool (WAPP) and is a member of regional organizations to develop hydroelectricity resources on the Senegal (OMVS) and Gambia (OMVG) rivers. OMVS was established in 1972 by the governments of Mali, Senegal, and Mauritania with a mandate to ensure a multi-purpose water resource development, including electricity supply. The Senegal River Basin’s hydropower potential is estimated at 1,200 MW, of which only 260 MW has been developed. During the 1990s a Special Purpose company – Société de Gestion de l’Energie de Manantali (SOGEM) (jointly owned by all three OMVS countries) was established.
The OMVS power system is made up of a system of Senegal River dams, the Manantali (200 MW) and Felou (60 MW) hydroelectric plants, and a 1,000-kilometer system of 225 kilovolt transmission lines and sub-stations. Manantali and Felou provide the lowest cost energy in the sub-region (about 7 USD cents/kwh), compared to the average cost of energy generation in the member countries (25-33 USD cents).
The GOS objective to reach universal access by 2025 relies on developing affordable electricity services in areas of the country that are currently only partially served. Senegal has recently harmonized urban and rural tariffs.
Senelec still produces electricity but has a new emphasis on gas-to-power projects. Senegal plans to further reform Senelec by unbundling the utility into three independent entities for production, transmission, and distribution. The World Bank is supporting an $80 million project to reduce Senelec’s technical and commercial losses by improving transmission and distribution infrastructure.
Sub-Sector Best Prospects
- Gas-to-power technologies
- New plant equipment and related systems
- Renewable energy solutions
- Transmission equipment
- Smart grid solutions
- Off-grid and micro grid solutions for rural electrification
- Solar household equipment
- Energy efficiency solutions
The GOS is committed to diversifying its energy mix by adding solar and increasing wind power. The $600 million MCC Compact offers opportunities for Engineering, Procurement and Construction EPC, consulting firms, grid extension and rural electrification companies. OMVS and OMVG offer opportunities for EPC and consulting firms, for example in environmental studies. Energy efficiency also presents a significant opportunity to investors. Senelec plans to replace traditional meters with smart meters.
Ministry of Energy
Senelec – Senegal National Electricity Company
MCC – Millennium Corporate Challenge
OMVS – Organization of the Senegal River Development
WAPP – West African Power Pool Organization
SIEPA - International Exhibition on Energy And Oil In Africa, Dakar, Senegal
AFDB – African Development Bank Group, Energy & Power