Private Sector Off Grid Solutions: Bridging Grid Electricity Supply Gap in Ouagadougou

Only 60% of the population in Ouagadougou, Burkina Faso, is connected to the SONABEL grid, leaving 40% of potential customers reliant on off-grid solutions. The demand for power is high, particularly during the hot season in February, March and April when households and institutions place a demand on electricity for cooling. The surge in demand coupled with the insufficient supply often leads to some regions being disconnected.

With close to 70% of power used in Burkina Faso generated from expensive thermal energy sources, energy costs are high. A typical household that falls within the category of a medium electricity consumer, spends approximately EUR 0.52/kWh, effectively making electricity tariffs in Burkina Faso one of the highest in Africa, or three times the cost of electricity in Kenya and twice as expensive as the average power costs across sub – Saharan Africa.

A household in Ouagadougou connected to the national grid pays monthly bills amounting to 40,000 CFA or approximately US $72 in a month. With a rooftop solar system installed, complete with battery storage, users experience savings in energy costs of up to 60% per month in addition to unrestricted access to a reliable power source that meets the full range of the household needs. This is an opportunity for energy savings to be channeled back to the solar company in repayments for the system over a given period after which users own the systems.

The context above provides a business case for private sector investments in stand – alone solar systems for both households and small and medium enterprises (SMEs) in Ouagadougou.

To bridge the electricity supply gap, AECF plays a catalytic role in de-risking private sector investments while maximizing the development impacts for Africa’s poorest. AECF investment in REACT EEP will support the accelerated installation of back-up systems for households on the national grid to complement electricity supply capacity in Ouagadougou, in order to enable increased energy supply to the large industry and increase rural access to electricity for the development of the local economy to complement.

REACT EEP waslaunched on30th July 2018and will run for two weeks. The deadline for receiving applications is 10th August 2018.