Senegal Energy Situation

1.1 Energy Sector

The Senegalese energy sector is dominated by the use of biomass, as even a big part of urban households still cooks with wood and charcoal. The use of biomass is one of the key factors responsible for the depletion of the country's forest stocks that is progressing at a rate of about 45,000 hectares every year. In the medium term deforestation will create bottlenecks in the supply of cooking energy, particularly for the poorest households.

Today only about 12 % of rural households have access to electricity. In 1997 Senegal began a reorganisation of its electricity sector following recommendations by the World Bank. It was decided to privatise the public utility SENELEC, to found the "Agence Sénégalaise d’Electrification Rurale" (ASER – Senegalese Authority for Rural Electrification) and to put in place the "Commission de Régulation du Secteur de l’Electricité" (CRSE – Regulation Commission for the power sector). ASER was charged with the task of rural electrification, while the urban electricity supply remained within the responsibility of SENELEC. It was decided to divide the whole of Senegal into 18 concession zones. International donors and the Senegalese government provide large amounts of money to supply the concessionaires with sufficient funds for their rural electrification activities. The donors involved are the World Bank (9 concessions), the German development bank KfW (2 concessions) and the African Development Fund (3 concessions). The government provides up to 70 % of funds required for investment and engineering. The concessionaire is charged with 20 % and the users with 10 %. End users will be charged with cost covering tariffs. All donors have dedicated a share of their funds (ca. 15 %) for the installation of renewable energy systems. Within the concessions municipalities can apply for ERIL loans (Electrification Rurale d’Initiative Locale – rural electrification through local initiatives) to implement electrification projects themselves. All ERILs have to be applied for with ASER and the respective concessionaire must approve the project. The loan conditions are less favourable than those for the concessionaires but all ERILs can be applied for without delay and are approved if sufficient funds are available.

During the 1990s, Senegalese companies sold about 2,000 PV systems per year, but the reorganisation of the electricity sector had a negative impact of the nascent Senegalese market for solar energy systems. Only 7 out of 18 solar companies survived the reform. However, 6 new companies have entered the market since 1998, raising the number of solar energy providers to 13. The companies are mainly involved in installation and service for donor-funded systems while the market for unsubsidised systems is very small.

1.2 Problem Situation

Even though the concessionaires will soon start their rural electrification activities, they will only reach a small part of the rural population. Following ASER's current strategy, almost all villages that are not located in vicinity of medium tension power supply lines will not be supplied with electricity within the next 10 to 15 years. In the concession zones of KfW (German implementing agency for financial cooperation) in the Peanut Basin and the Casamance, for example, about 1 million people in 2,600 villages will not be connected to the grid.

About 200 of these 2,600 villages show a higher economic activity and host a local market, which makes them ‘microcenters’ for the surrounding villages. Therefore, these villages will be targeted by the first interventions. Another 600 villages with 250 to 500 inhabitants are also suited for energy supply interventions for social infrastructure under the approach of Energising Development. With populations of less than 250 inhabitants the other 1,800 villages are too small for direct activities. However, these villages will benefit from the interventions in larger villages nearby and from the strengthening of the local market of small solar systems.