WASHINGTON, December 16, 2015 – The World Bank’s Board of Executive Directors today approved an International Development Association (IDA)* credit of us$54.5 million and a grant in the amount of us$10.5 million to increase access to electricity in Niger. The Electricity Access Expansion Project (NELACEP) will finance part of the state-owned utility, Nigelec’s Investment Distribution Program to address distribution network bottlenecks and pending connection requests in seven major urban areas, including the capital Niamey.
The project will finance the development of a National Electrification Strategy, which will provide a road map to develop access in urban and peri-urban areas and in rural areas in an equitable manner. The project will also support capacity building activities for Ministry of Energy and Petroleum (MEP) in the context of the current sector reform program and will provide financing to Nigelec to improve its performance and to cover project implementation costs.
“The project will benefit around 330,000 people in seven urban areas, including households, small businesses, local government, elementary and high schools, all of which will be connected to the electricity grid. The project will also contribute by enhancing capabilities at the Ministry of Energy and Petroleum and Nigelec, laying a solid foundation for expanding electricity services to Niger’s population and to commercial customers”, said Siaka Bakayoko, the World Bank Country Manager for Niger.
“At about 10 percent, access to electricity services in Niger remains one of the lowest in the region. There are very large disparities in access between urban and rural areas, and between the capital Niamey and the other urban centers. Electricity access is below one percent in rural areas, varies in smaller cities between 20 and 40 percent, and stands at around 50 percent in Niamey. Furthermore, electricity consumption levels are relatively low”, explained Manuel Luengo, the World Bank Task Team Leader
Nationwide aggregated peak electricity demand is only about 150 MW (excluding mining operations). Nigelec, serves about 218,000 customers. Over the period 2001-2014 electricity consumption in Niger grew at an average 8.5 percent per year, much faster than the GDP growth of about 4 percent
Imports of cheap electricity from Nigeria, Niger’s main supply source, have been critical for meeting a strong growth in electricity demand during the last decade. Electricity imports from Nigeria under a preferential tariff (about US¢4/kWh) account for about three-fourths of consumption. Import is lagging behind the fast growing demand and is constrained by generation availability in Nigeria and transmission capacity between the two countries.
The high dependence on energy imported from Nigeria, coupled with fast growth in electricity demand, and low access levels have led the Government and Nigelec to embark on large investments in domestic power generation. In its 2011 business plan, Nigelec assumed that electricity demand will increase by about 10 percent per year over the next 10 years. Nigelec has signed a two-year rental contract for 30 MW of small diesel units whose generation costs are close to US¢30/kWh to overcome transmission unreliability and frequent power cuts and meet its fast- growing demand.
The Government of Niger has defined an ambitious distribution investment program with the objective of increasing the overall national access to 60 percent of the population by 2027. The Government is currently building an 80 MW diesel plant which will become operational in early 2016 and developing the Kandadji multipurpose hydropower project on the Niger River, which is expected to enter into operation before the end of the next decade. The Kandadji project will provide a maximum of 120 MW during five months of the year including 30 MW during the dry season. Other generation projects under consideration include a 20 MW grid connected solar PV generation plant, a 600 MW coal-based electricity generation plant fed by the Sakaldamna deposits which will be commissioned around 2022, as well as other fossil-fuel generating units to supply the urban centers of Agadez, (Center-North) Zinder (Center-South), Maradi (Center-South), and Tahoua (Center-West).
* The World Bank’s International Development Association (IDA), established in 1960, helps the world’s poorest countries by providing grants and low to zero-interest loans for projects and programs that boost economic growth, reduce poverty, and improve poor people’s lives. IDA is one of the largest sources of assistance for the world’s 77 poorest countries, 39 of which are in Africa. Resources from IDA bring positive change for 2.8 billion people, the majority of whom live on less than $2 a day. Since 1960, IDA has supported development work in 112 countries. Annual commitments have averaged about $18 billion over the last three years, with about 50 percent going to Africa.