Benin Power Compact

Benin produces only a small portion of the electricity it consumes and relies heavily on imports from neighboring countries. Only one-third of Benin’s population has access to electricity, and total consumption is low due to limited access and availability. At the same time, rapidly growing demand for power has stressed Benin’s national electrical grid, creating power outages that hurt businesses and social services.

MCC is partnering with Benin through a $375 million compact, designed to modernize the West African country’s power sector. The compact, which is supplemented by a $28 million contribution from the Government of Benin, aims to strengthen the national utility, attract private sector investment, and fund infrastructure investments in electricity distribution as well as off-grid electrification for poor and unserved households.

Financials

Financials as of March 31, 2019

Compact Budget

Milestones

  • Entry Into Force:
     June 22, 2017
  • Signed:
     September 9, 2015

Compact Projects

Electricity Distribution Project

  • $106,932,000Project Total Amount
  • $39,300,925Project Amount Committed
  • $5,855,096Project Amount Expended

To accomplish the project objectives, MCC Funding will be used to modernize Benin’s electricity distribution infrastructure to expand grid capacity to accommodate future growth, improve reliability and reduce losses and outages. The project focuses on improving the grid serving Cotonou (and selected regional networks as a complement to proposed solar Independent Power Producer investments), as well as on a national level by building a modern distribution dispatch and control center to more effectively manage the network.

Progress and Achievements to Date

MCA-Benin II launched the compact’s largest procurements for power works to be built across Benin, including 18 new or expanded substations and the installation of 50 miles of new underground cabling that will modernize Benin’s power grid and lead to greater reliability and lower distribution losses. MCA-Benin II awarded contracts for the construction and equipping of an electricity dispatch and control center that will provide real-time monitoring and control of Benin’s national grid.

Projected Long-Term Results

  • Estimated Beneficiaries 10,600,000
  • Estimated Net Benefits $10,600,000

Electricity Generation Project

  • $132,755,786Project Total Amount
  • $3,645,216Project Amount Committed
  • $3,008,682Project Amount Expended

To accomplish the project objectives, MCC funding will be used to increase Benin’s domestic generation capacity by up to 50 megawattsAC of solar photovoltaic generation through an Independent Power Producer transaction.

Projected Long-Term Results

  • Estimated Beneficiaries 10,600,000
  • Estimated Net Benefits $10,600,000

Off-Grid Electricity Access Project

  • $46,784,033Project Total Amount
  • $4,242,965Project Amount Committed
  • $2,462,171Project Amount Expended

To accomplish the project objectives, MCC funding will provide financing for:

  • Benin’s first-ever policy, strategy, master plan, and regulatory framework for off-grid electrification; and
  • Competitive co-financing   grants that will fund off-grid electrification investments, including mini-grids, solar household systems, critical public infrastructure, and energy efficiency measures.

The project is MCC’s largest off-grid electrification effort to date, and will support policy reforms and infrastructure financing. With this investment, project financing for renewable energy solutions for the poor will help address the gap in access to electricity for two-thirds of Benin’s population.

 

Progress and Achievements to Date

The Off-Grid Clean Energy Facility (OCEF) launched a second Request for Applications in late 2018 for $27 million of project co-financing. Co-financing agreements from the first call ($4.5 million) will be signed in June 2019.

Projected Long-Term Results

  • Estimated Beneficiaries 182,000
  • Estimated Net Benefits $6,000,000

Policy Reform and Institutional Strengthening Project

  • $44,453,115Project Total Amount
  • $7,728,076Project Amount Committed
  • $4,682,706Project Amount Expended

To achieve the project objectives, MCC funding will be used to support interventions to:

  • Improve governance in the electricity sector by improving regulation, establishing a tariff policy, planning periodic tariff adjustments, increasing energy efficiency, and strengthening the policy and institutional framework for independent power producers.
  • Improve management, operations and maintenance within the national utility; and
  • Inform and educate the public on tariffs, energy efficiency, renewable electricity and other key electricity sector issues.

Progress and Achievements to Date

MCA-Benin II expects to award a management services contract for operating the national power utility in the coming months; a tariff study has been completed and its recommendations approved by the Government of Benin.

Projected Long-Term Results

  • Estimated Beneficiaries 10,600,000
  • Estimated Net Benefits $10,600,000

As of May 31, 2019