Benin Power Compact
Powering Business Growth in Benin
Madame Awahou Codjo is a small business owner in Cotonou who benefitted from MCC’s 2006 investments in Benin. Now, she stands to benefit from MCC’s $375 million Benin Power Compact.
- Grant Total: $375,000,000
- Grant Committed: $7,426,037
- Grant Expended: $2,005,215
- Entry Into Force: June 22, 2017
- Signed: September 9, 2015
The $375 million compact aims to strengthen Benin’s national utility, attract private-sector investment, and fund investments in electricity generation and distribution infrastructure and off-grid electrification for poor and unserved households. The Government of Benin has committed $28 million to these efforts.
Only one-third of Benin’s population has access to electricity, and total consumption is low due to limited access and availability. Electricity consumption in Benin is below the average for Africa’s low-income countries at 110 kilowatts per hour per capita annually, or 0.01 percent of the average for middle-income economies.
by MCC’s Chris Broughton, Benin Resident Country Director
This originally appeared on MCC’s Medium page.
The project is MCC’s largest off-grid electrification effort to date, and it will support policy reforms and infrastructure financing. With this investment, project financing for renewable energy solutions for the poor will address the gap in access to power for two-thirds of Benin’s population.
The project will build a national electricity distribution control center in Cotonou, Benin’s largest city, and modernize the grid there and in selected regional urban areas. This investment will upgrade Benin’s electricity distribution infrastructure to reduce losses, improve system reliability and reduce outages, and expand network capacity to accommodate rapidly growing demand.
The project will increase Benin’s domestic generation capacity by up to 78 megawatts (MW) through investments in:
- solar (MCC’s largest to date at 45MW), and
- hydro generation (rehabilitation of 1 MW run of river unit).
These investments are expected to increase the amount of installed capacity in Benin by an amount equal to one-third of the country’s current peak demand, and help the country reduce its reliability on energy imports.
The project supports the sustainability of Benin’s electric power sector through professional regulation, stronger utility operations and private sector participation in generation. The investment also supports Benin’s newly created regulatory authority in its efforts to conduct tariff studies and develop a rate-making and licensing framework; contribute to tariff reform; put into place the policy and institutional framework required for off-grid electrification; and introduce standards for energy-efficient household practices.