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Monday 25 June 2018
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Ivory Coast Opens Space For Independent Power Producers: A Bid To Increase Electricity Output

Ivory Coast Opens Space For Independent Power Producers: A Bid To Increase Electricity Output

Sometimes when you have something for so long, you tend to undervalue its importance. I just realised this after a recent airing of Marketplace Africa where Africa’s generational power problems were being explored.

One of Marketplace Africa’s correspondents (the name has slipped my mind) went to visit Nambonkaha, a small remote Muslim village in the north. Nambonkaha’s economy is wholly based on agriculture where the majority grow rice, sorghum, and millet.

After all the greetings, the CNN correspondent was presented with a cup of water. As she was to learn, later on, it’s part of the tradition in this region to give water to visitors. After a couple of sips, the correspondent was perplexed by what she thought as indifferent facial expressions expressed by her hosts. From her facials, you could see that she was having a difficult time trying to interpret the facial expressions of her hosts.

While a thousand thoughts were still racing in her mind, one of the younger men present, Sidibe, a male nurse who is the only source of health care in the village said to her, “Just the way you love it, very cold”. It’s at that moment that it dawned on her, the supposedly indifferent facial expressions were not directed at her more so they were not indifferent, as she had thought, rather it was happiness personified. These people were just happy to offer their guests refrigerated water.

In as much as the correspondent found herself amazed, it also raised different feelings inside me. I was happy for these people and the Ivory Coast for an electrification drive that is bringing so much happiness to the populace while at the same time I was also sad that in a world where the talk is no longer about electrification, but the move to green energy. Africa still finds itself miles off. It’s sad at best but it’s a step in the right direction and it certainly heralds a cusp of change.

The resolution to increase electricity production in Ivory Coast was reached in late 2011 after the resolution of the political crises, which had engulfed the nation. The powers that be at the time realised that for real economic growth, there was a need to invest heavily in energy.

In 2014, the government of Ivory Coast codified their earlier energy resolutions leading to the enactment of the ‘Electricity Code Law n2014-132 of March 24, 2014’. This law was enacted as a guiding strategy to resolve among others the following:

1) double electricity production to about 3500MW by 2020
2) diversify sources of electricity
3) increase electricity exports to the regional market.

Official figures from the African Energy Research report shows that electricity demand growth has accelerated in Ivory Coast and continues to do so year-on-year at 7 percent from 2011.

An ambitious National Development Plan adopted recently in September of this year seeks to increase the grid by 150MW each year until 2030. The plan requires a massive $20 billion investment for it to bear the fruits that the government is aiming for. In order for the plan to succeed, the government of Ivory Coast has called upon independent power producers to come on board and help.

To date, there are three independent power producers in Ivory Coast, Aggreko, Azito Energie, and Ciprel.

Ivory Coast seeks independent power producers with interests in any of the following, hydroelectric power generation, thermal power generation and those with expertise in natural gas exploration. For the better part of the last 50 years, most of Ivory Coast’s electricity came from hydroelectricity. The country remains committed to this source of power generation as evidenced by the unveiling of a new dam, the Soubre dam financed by a $500 million loan from China’s Export and Import Bank.

In the last 10 years, however, there has been a shift from hydroelectric power generation to thermal power generation. Indigenous gas fields in the country are currently not producing at full capacity. Ivory Coast is calling upon companies in the energy sector to grab this opportunity allowing more actors in energy. Despite the existing gas fields not operating at full capacity, the government believes that it’s positioning along the West Africa Transform Margin offers more than the fields already explored. The government seeks companies willing to explore other territories to come forward.

Ivory Coast has paved the way for a conducive investment environment for any independent power producer willing to work in the country. Beauracratic processes have been curtailed, as an investor one will only deal with the Minister in charge of Energy and the current electricity regulatory body, ANARE.

The Minister in charge of Energy agrees and signs the production convention with the independent power producer. This production convention specifies the conditions of sales, obligations of both parties, leasing contract terms and connection of the power producer to the national grid.

ANARE is in charge of overseeing if the independent power producer complies with laws, regulations, and obligations as agreed to in the production convention.

As a way of increasing profitability, Ivory Coast designed a new pricing structure that subsidises consumer costs and implements gradual tariff increases. The country is also in the process of renegotiating export prices with the independent power producers already working on the ground.