World Bank, on Wednesday, approved credits and grants to the tune of 167.55 billion CFA francs to six West African countries, including Cote d’Ivoire, to support reforms for cross-border power exchange in West Africa.This financial worth $ 300m (167.55 billion CFA francs) will enable Burkina Faso, Cote d’Ivoire, Guinea, Liberia, Mali and Sierra Leone to initiate the reforms needed to successfully create a regional electricity market, a statement sent to APA said.
This is a program in support of development policies for regional energy trade in West Africa which aims to remove obstacles to electricity trade, leading to lower prices for consumers, increased competitiveness for businesses, and more resilient and reliable supply.
This program should provide the populations with affordable access to electricity. Only 50 percent of the population in West Africa has access to electricity, which is moreover at a cost among the highest in the world, and in particular twice the price of overall electricity in East Africa.
In addition, due to faulty networks, electricity services are far from reliable, with outages averaging 44 hours per month, which hampers development in several regions of these countries.
Member countries of the Economic Commission for West African States (ECOWAS) have been for the past ten years been working to set up a fully integrated electricity market, as part of the West African electricity trading system.
Within a few years, they have completed the main interconnections that use to link their networks. The program approved by the World Bank is in support for the application of a reform program that will allow the countries concerned to execute policies that facilitate cross-border exchanges of cleaner electricity produced from natural gas, hydraulic and renewable energy, and at a lower cost.
These sources of supply will replace the smaller, more expensive oil-fired power stations and diesel generators, and improve the efficiency of electricity services.
“West Africa has immense potential in the production of clean and green energy, which countries can take advantage of, by uniting, to provide their inhabitants with cheaper electricity and foster job creation,” said Ousmane Diagana, Vice President of the World Bank for West and Central Africa.
This regional energy reform program revolves around three axes. The first axis aims to strengthen confidence in the proper application of trade agreements by supporting the security of payments for energy exchanges. The second axis supports the implementation of investment decisions at the lowest cost, favoring regional solutions and promoting competition.
As for the third axis, it aims to strengthen transparency by addressing the issue of the solvency of national electricity companies and by guaranteeing market information on major investment decisions that have an impact on supply and demand.
“The program will play a fundamental role in achieving our regional energy market objective, and I would like to thank the World Bank for its support,” said Jean-Claude Kassi Brou, President of the ECOWAS Commission.
The West African electric power trading system should continue to progress and focus, through this support, on helping its member countries to collaborate and coordinate the reforms necessary to develop regional electricity trade and thus have access to more affordable and reliable supply.
Optimizing the region’s energy resources will allow for efficient and resilient power systems which in turn will make our economies more productive and inclusive. ECOWAS will continue to be a solid partner towards the achievement of this goal.”
Besides, this financing program in support of development policies for regional energy trade in West Africa is the first of its kind to use the regional IDA window.
This mechanism enables the World Bank to support reforms aimed at achieving a common objective to several countries in a coordinated manner. It is in line with the ECOWAS directive on securing cross-border electricity exchanges, adopted in December 2018 to create a regional electricity market.
The economic benefits of this market are estimated at $ 665 million per year for all the countries concerned, with a reduction of one third of the average cost of electricity production in the region, the statement concluded.